Small businesses targeting SCM software

May 15, 2015 Ken Klaver
Many large businesses today have embraced the use of SCM-software, but small and mid-size businesses (SMBs)  are picking up the pace,  set by the larger corporations.

Software Advice recently published a report that analyzed 200 prospective supply chain management (SCM) software buyers and found that only 6 percent of small businesses are currently using commercial SCM software. Surprisingly, the study also found small businesses are budgeting $30,000 to purchase new SCM software in 2015 to reduce data entry and automate tasks. 

Warehousing improvement, increasing supply chain visibility and ensuring supply chain integration are the main drivers for the pursuit, according to Supply & Demand Chain Executive (SDCE).

“Many companies are using a variety of disparate systems and they want to improve integration of data flows between their different business processes. Beyond that, if a company's employees are doing a lot of manual data entry, they're simply losing money by not automating those types of tasks, which this software can help accomplish.” 

Gartner reported earlier this year that software designed to support companies manage, plan and operate complex supply chains is rapidly growing. Sales jumped nearly 11 percent in 2014 to $9.9 billion, a substantial climb from 7.5 percent growth one year earlier.

supply chain-software market - 2014 (Gartner)

 Supply Chain Management

San Francisco-based risk-management provider saw revenue increase 70 percent last year, thanks in part to software that standardizes the collection of supplier data. Focused on retail and telecommunications clients, software designed to aid in forecasting and inventory management helped Boston’s ToolsGroup Inc. grow more than 30 percent. Top 10 vendors including Oracle and JDA Software Group maintained their status as “Leaders,” but saw sales in the supply chain management sector either decline or remain flat. The Gartner report notes, “Niche vendors maintained dominance within individual submarkets through new capabilities and focus on customer intimacy.” (pymnts ) 

According to Burnson,  SCM-software is nowadays more accessible than ever for small to midsize businesses. “The move to the cloud drives immediate up-front costs down and the subscription pricing models tend to be more attractive for SMBs. On top of that, we're seeing a proliferation of highly specialized, niche solutions targeting SMBs emerge from new vendors in this space.”

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