22 December 2008 | Paul Snell
Spending on supply chain management (SCM) technology will continue to grow over the next five years despite the economic downturn.
A study by AMR Research found revenues from SCM technology are estimated to increase by 7 per cent a year, rising from $6.5 billion (£4.3 billion) in 2007 to $9.2 billion (£6.2 billion) in 2012. This is slightly down on the previous year's growth of 12 per cent.
AMR said the poor economy would provide a boost as companies attempt to deal with risks such as rising commodity prices, high inflation, and preserving cash flow.
Noha Tohamy, vice president at AMR, told supplymanagement.com most of the growth would come from firms replacing existing systems with new technology. She added companies saw technology as an investment to gain greater visibility to deal with volatile markets.
The study found SAP and Oracle continue to hold just under a quarter of the market, with a combined revenues of $1.5 billion (£1 billion).
Tohamy added the SCM market had already seen consolidation as it was already quite mature, but only expects the downturn to affect smaller suppliers. "We will see it within some of the small vendors, with revenues of less than $20 to $30 million that cannot go it alone. There will be mergers among companies trying to survive," she said.