Supply Chain Management Market to Smash $13 Billion in 2017, says Gartner

23rd June 2017

Logistics BusinessSupply Chain Management Market to Smash $13 Billion in 2017, says Gartner

Gartner analysts say that the supply chain management (SCM) market will exceed $13 billion in total software revenue by the end of 2017, up 11 per cent from 2016. It is on pace to exceed $19 billion by 2021, as software as a service (SaaS) enables new revenue opportunities.

“Between 2017 and 2021, Gartner forecasts nearly $6 billion in total software revenue will be added to the SCM market,” said Chad Eschinger, managing vice president at Gartner. “Digitalisation is increasing demand for agility and forcing new business models, which is boosting spending in the SCM market.”

SCM providers are already differentiating themselves from competitors and driving revenue growth by incorporating new digital business technologies, such as mobile, machine learning, in-memory technologies, multienterprise visibility and the Internet of Things (IoT), into their offerings.

Mr Eschinger added that to remain competitive in this environment, end-user organisations are seeking to discover and exploit value in the huge amounts of data generated throughout an ever-extending network of businesses and connections that make up a modern supply chain.

Moreover, the move to SaaS delivery shifts costs from capital expenditure (capex) to operational expenditure (opex), which makes investment in SCM technology more attractive to small and midsize businesses (SMBs) and organisations in emerging markets, therefore expanding the addressable market and increasing overall spending.

The SCM market forecast is made up of three categories: supply chain planning (SCP), supply chain execution (SCE) and procurement. Adoption and associated revenue for SaaS are moving through the market at different rates, with procurement leading the move to cloud, and SCP trailing.

Overall, SaaS revenue growth is driven by a combination of factors: vendors moving to cloud-first or cloud-only deployment models, and end-user organisations becoming more comfortable with issues such as cloud security and appreciating the capabilities and innovation of leading-edge SaaS solutions.

Gartner clients can read more in the research note “Forecast Overview: Supply Chain Management, Worldwide, 2016 Update.”

Gartner analysts will provide additional analysis and information on supply chain trends at the Gartner Supply Chain Executive Conference taking place on 20-21 September in London. You can follow news and updates from the events on Twitter using #GartnerSCC.