Illuminating or alarming?

A recent Forrester survey of the buying intentions of North American companies for supply chain software and services has some illuminating and alarming results for the channel.

The study of 603 technology decision-makers and enterprises found that only 26 per cent of respondents will be buying supply chain applications this year. Generally, the bigger the company, the greater the odds are they will be buying.

Author Noha Tohamy found that only 11 per cent of respondents said their company will hire a consultant or systems integrator for supply chain work this year, identical to the number who say they’ll be retaining a consultant or VAR to do an RFID pilot or implementation.

This may at first blush seem to be bad news for partners of applications from firms such as SAP, Oracle, SSA, Microsoft Dynamics, i2 Technologies and Progress.

But there is some good news for resellers. Compared to other enterprise applications, Nohamy writes, the appetite for hosted supply chain management (SCM) is limited.

Only 17 per cent of respondents said they are currently using a software-as-a-service model to do some SCM, which is slightly less than half the adoption rate (34 per cent) of hosted enterprise resource planning applications and almost that (31 per cent) for customer relationship management applications.

However, at companies where the IT staff is less than one per cent of the total employee base — largely small businesses — 25 per cent of respondents are using hosted SCM. Software-as-a-service adoption decreases as the size of company increases.

Furthermore, as companies interested in SCM increase in size, their willingness to hire system integrators increases.

Nine per cent of companies with 5,000 or fewer employees said they’d hire a VAR for supply chain management work, but 14 per cent of those with 5,000 or more employees would retain outside help.

Similarly, writes Tohamy, for RFID pilots and implementations, eight per cent of companies with under 5,000 employees would use a system integrator, compared to 15 per cent of those with more than 5,000 staffers.

It’s no surprise, then, to find there are a limited number of VARs with supply chain practices in Canada. Mid- and small-sized businesses may be spending the most on IT these days, but not in this market.

SCM is a tough sell, especially if a businesses partners aren’t demanding it. Pressure from Wal-Mart, for example, is one reason why retailers are among the leaders in SCM adoption.

The answer, however, is not for system integrators to give up, but to keep slogging. Detailed case studies and pilots will whet the appetites of medium-sized companies, especially those in industries that a savvy VAR can sense are about to embrace the technology.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

Related Tech News

CDN in your inbox

CDN delivers a critical analysis of the competitive landscape detailing both the challenges and opportunities facing solution providers. CDN's email newsletter details the most important news and commentary from the channel.