Supply Chain Technology: Market Share Winners and Losers

John Fontanella and Eric Klein -- Supply Chain Management Review, 4/1/2008

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Market Share Winners and Losers

Based on a three-year look at end-user preference for technology vendors, no one class of provider can feel confident that it is dominating the marketplace in all sectors.

We found that, in the United States, ERP vendors risk losing between 3 and 8 percent of their customer base in categories such as inventory optimization, collaborative forecasting, supply chain visibility and performance, international trade and compliance, service parts planning, and supply chain network design.

Best of breed vendors and service providers will make the biggest share gains in supply chain visibility and performance management, service parts management, inventory optimization, demand planning, and warehouse and transportation management. They will, however, suffer significant loss of share in order management, S&OP, and manufacturing and distribution planning. Surprisingly, even in the U.S. there is a thirst for custom built applications, particularly in areas like VMI, collaborative forecasting, and inventory optimization. European companies seem less interested in best of breed vendors when they can only do minimum modification to the basic software package. This is a cautionary finding for SaaS vendors entering the European marketplace. Survey respondents in Europe aren't immediately running to their ERP vendors for applications—rather, they are showing a distinct preference in most categories to buy more heavily customized best of breed offerings or applications that are built in house.

>> Next: Supply Chain Technology Outlook Key Takeaways

In this article:

• The supply chain technology survey
• Companies increase spending on supply chain technology
• Spenders Seek Growth, Software Replacement
• Vendors To Boost Share and Penetration
• Companies to Swap Software
• Spending to Boost Low-Penetration Software
• Best of Breed vs. ERP—Both good canidates for replacement
• Market Share Winners and Losers
• Key Takeaways

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