16 January 2008
Spending on supply chain technology will grow significantly in 2008, according to a new study.
In a report by AMR Research, twice as many firms said they would increase spending on supply chain management technology this year than in 2006.
Budgets for technology are expected to increase by around 12 per cent this year, as businesses look to their supply chains to increase profitability and productivity. The ability to redesign their supply chains and increase speed of supply networks were other important factors.
Spending is evenly split between those firms looking to buy new technology and those intending to replace existing systems.
The report's author, John Fontanella, vice-president of research at AMR, said: "Firms are thinking more positively about technology. During its downturn [in the early 2000s] it was seen as a burden and a cost, but it has been reinvented."
Large firms are driving the growth, but medium-sized companies are also expected to spend more. "Medium-sized firms are being pulled kicking and screaming, primarily by their customers who want to enable electronic communication and delivery, for example," said Fontanella.
He added the lower cost of supply chain technology, particularly with the advent of technology that doesn't need costly software or licensing agreements, was another key driver in the market's growth. But he said free, "open-source" options had no impact on this year's survey results.
Fontanella added the market would remain healthy, and said it was unlikely that large vendors, such as Oracle and IBM, would dominate it. He predicted buyers would continue to use smaller, specialist providers.