Digitalization Levers Take Center Stage in Addressing Supply Chain Issues — Everest Group | Press Release
Enterprises must leverage analytics, cloud computing, control tower technology, IoT and MDM solutions to control cost, remove process inefficiencies, manage risk, and address uncertain customer demands.
Enterprises drove 15 percent growth of Supply Chain Management (SCM) Business Process Outsourcing (BPO) in 2017 as they sought to reduce high operating costs, address evolving customer demands, and manage risk and compliance. The solution to much of these problems, according to Everest Group, is digitalization.
“Enterprises can struggle with broken supply chains for many different reasons, not the least of which are siloed operations, inefficient processes and lack of visibility” said Vikas Gujral, practice director at Everest Group. “Enterprises that adopt digital solutions to combat these challenges are achieving better supply chain efficiency at lower cost. We have identified analytics, cloud computing, control tower, Internet of Things (IoT) and master data management (MDM) solutions as the emerging drivers for success in the SCM BPO market.”
- Analytics: Analytics capabilities will help streamline supply chain operations through actionable insights to enhance visibility and control. However, despite the growing adoption, analytics penetration within supply chain remains low when compared to procurement.
- Cloud: Cloud is becoming a major disruptive force for seamless supply chain operations, because it enables agile operations, cost containment and increased collaboration. Cloud ties all underlying pieces and technologies together, forming the basis for the supply chain of the future.
- Control tower: Control tower—a central platform which tracks, monitors and directs activities across the supply chain—provides better visibility, cost benefits through accurate demand forecasting and inventory management, and reduced cycle time. Organizations have started realizing the benefits of control tower solutions, leading to cases of increased implementation.
- IoT: IoT, coupled with other technologies, forms another key building block of efficient supply chain operations. IoT is valuable in numerous applications for alleviating supply chain woes and preparing enterprises for the future.
- MDM: Demand for visibility, efficiency and smarter organization is increasingly creating the need for better data management. Consistent increase in MDM FTEs indicates greater focus on data management services
These results and other findings are explored in a recently published Everest Group report: “Supply Chain Management (SCM) BPO—Annual Report 2018: Moving Toward a Digital Supply Chain Ecosystem.” In the report, Everest Group analyzes the global SCM BPO market in 2017, focusing on the state of the market, market size and adoption trends, and the service provider landscape.
Key Adoption Trends:
- Market size and growth: The SCM BPO market is now estimated at US $1.5 billion and is expected to grow at a similar pace in the future.
- Geography distribution: North America is the key geography in terms of SCM market share, followed by Europe. Asia Pacific registered the highest revenue growth in the market.
- Industry adoption: While manufacturing still leads the adoption in SCM outsourcing, newer industries such as travel & logistics have seen an uptick in adoption.
- Buyer size: Although large buyers still form the majority, SMBs and midmarket buyers have awakened to the benefits of outsourcing.
- Pricing: FTE-based pricing witnessed the maximum inclusion, very closely followed by hybrid pricing.
- Sourcing dynamics: Although onshoring has seen an uptick from past years, offshore/nearshore delivery still forms the major chunk of the SCM BPO market.
***Download a complimentary 10-page abstract of the report*** (Registration required.)