While smaller cloud-based Supply Chain Management vendors grow further, the overall growth of procurement and SCM market also gets stronger. According to a research conducted by Gartner, SCM offerings show a growth of 17% in 2014. Aravo Solutions Inc. tops the cloud-based vendors with the highest growth rates at 70%. Last year, the SCM market grew at a 10.8% pace and only 7.5% in 2013 – a valuable increase of 3.3%.
According to Chad Eschinger, research vice president at Gartner, the growth in the cloud is coming from various directions, including large mature corporations and smaller companies. In some markets, large companies with on-premise software are moving to the cloud. On the other hand, emerging markets and small companies do not have on-premise investments, making it easier for them to move to the cloud.
What can they get from moving to the cloud?
- These companies may be using manual processing such as spreadsheets and paper. By shifting to the cloud, they will be able to automate these processes. Since cloud services are easier to use, they can start running them in six to eight weeks – a big difference from the up to nine months of on-premise software installation. Moreover, cloud services do not require a number of IT staffs for maintenance.
- The cloud has collaboration capabilities that enable manufacturers to share information with suppliers, trading partners and even customers. It also allows for faster product to market transfer and higher profit margins. Other packages also include real-time communications during transit from shipments to distribution warehouses.
If your company is planning to adopt cloud, evaluate your supply chain management and procurement processes carefully. Cloud-based SCM is projected to continue outpacing the growth of the overall SCM software market with a compound annual growth rate of approximately 19%. As an opportunity to oversee your workflows and asses for improvement, you should not miss the chance of being a part of a growing industry.