IT Subway Map: sustained growth in cloud solutions

Ever-more companies are switching to supply chain software in the cloud. Software vendors that have offered a cloud-based solution right from the start, such as Anaplan, are enjoying particularly strong growth in supply chain, but companies with their roots in server-based solutions – such as SAP and Manhattan Associates – will soon see many of their customers switching to cloud versions too. That is one key finding from the research for the 2019 edition of Supply Chain Movement’s annual SCM IT Subway Map Europe.

By Martijn Lofvers

Well over half of the companies surveyed by the research and advisory company Gartner last year named implementation speed and cost efficiency as the most important reasons for switching to a cloud-based solution. A little over half of them also indicated that they are already using at least one type of supply chain software in the cloud, and 22% are planning to invest in one over the next 12 months.

Last year SAP, the global market leader in supply chain software, announced that a quarter of its European implementations are cloud based. For Manhattan Associates’ implementations in Europe, that figure has jumped from just 2% to an impressive 18% this year.

Last year’s research by Gartner revealed some significant differences in the types of supply chain software that are running in the cloud. According to its survey, companies are using (or are most likely to use) cloud-based software for collaboration with external supply chain partners (77%). Software for global trade management and for transport management ranks second (71%) and third (69%), respectively. Internally focused software for warehouse management systems is understandably ranked a little lower relatively speaking, but at 50% it still scores highly. Meanwhile, the percentage for Sales & Operations Planning (S&OP) software has risen from 48% to 61%.

Machine learning and DDMRP

The annual research for the SCM IT Subway Map also reveals that many planning software companies are working to develop machine learning and artificial intelligence (AI) functionality. Seen in that context, software vendor JDA’s takeover of a German AI specialist in the autumn of last year makes sense. Nevertheless, the application of this functionality including utilization of external data such as weather data is still very limited in Europe. The growing use of production planning in line with Demand-Driven MRP (DDMRP) principles is now becoming increasingly apparent within European manufacturing companies.