Media Coverage
November 2010
Trends in Supply Chain Process Automation
Gartner is no doubt a name well-known to readers involved in the task of implementing and evaluating information technology solutions for their logistic operations. One of the pivotal areas Gartner has made a name for itself is its Magic Quadrants, which provided a summarised overview of the largest players in the IT space for various industries.
It has recently launched its Magic Quadrant for Supply Chain Planning for Process Automation, and as always, the results and trends highlighted provide a curious snapshot into the current state of software for process automation. Being the inaugural launch for this particular sector, the findings and statements can be considered both enlightening and controversial.
One of the most exciting was that almost 75% of all end-users of supply chain planning (SCP) solutions are looking at process automation in supply chain planning, rather than process innovation. Gartner defines process automation, to paraphrase, as incremental improvements in the current paradigms of conducting SCP with a focus on process efficiency, evolutionary cost management and industry competitive parity.
It’s possible to take this in a negative light – users and vendors SCP solutions are battening down the hatches and discarding innovative solutions for security in established practices. But what I think it points to is an end-user base that is looking at their operations in an extremely critical light, possibly for the first time, and who want to maximise the efficiency of their existing SCP process or implement a SCP function based on best practices.
So often, the real value of the implementation of a SCP solution is the work, research and development of your master data prior to implementing the SCP solution. In terms of SCP process automation, companies often find themselves changing their processes significantly to fit with the chosen SCP solution framework.
The exercise is a worthwhile one, and as the Magic Quadrant suggests, end-users are using these solutions to build jump-off platforms to leverage more innovative technology in the future. We’re also finally seeing a shift in the modes of traditional SCP planning - users are looking a more global platform, a dedicated SCP function within their organisations and a move away from spreadsheet-based planning, much to Microsoft’s dismay - Excel can be many things, but a robust SCP tool it ain’t.
Likewise, SCP vendors in the Magic Quadrant are playing in a highly competitive market where many of the functions, features and developments are commoditised. If the Quadrant is accurate, then it really is a buyer’s market – users have a lot of potential to negotiate and obtain relatively cost-effective, custom solutions for their organisations.
The worth of the Magic Quadrant cannot be underestimated by any means, but their disclaimer is telling:
“Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the ‘Leaders’ quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.”
I would recommend readers look outside of the Magic Quadrant as well to view potential players who may not meet the necessary requirements to be included in the review (minimum US$10 million, at least 5% of its revenue outside of the country of origin, four of six key functional areas catered for), but could provide extremely promising solutions at a tactical level.
As usual, if you have any comments or questions please contact me at rick.de.klerk@opsi.co.za.
