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A new benchmark report, "The Secret SaaS: On-Demand Supply Chain Management" from Aberdeen Group explores whether a Software-as-a-Service (SaaS) application deployment is a long-term, viable option to enable different process areas of supply chain management. In the report 5 process areas are benchmarked and discussed: B2B Connectivity, Sourcing and Procurement, Supply Chain Execution, Supplier/Customer Collaboration, Supply Chain Planning/Manufacturing.
In the current economic climate with increasing supply chain complexity, new application investment decisions are met with a high degree of scrutiny. In addition to upfront and ongoing costs, the ability to integrate the application with current processes and extend it into the extended supply chain, as well as the need for simple integration and non-complex process architecture are top factors in the decision making process.
Surveying over 130 enterprises, Aberdeen found that the interest in SaaS solutions is on the rise, particularly among top performing, Best-in-Class companies, who are implementing SaaS solutions successfully. Furthermore, 75% of Best-in-Class companies view their use or planned migration to SaaS as a long-term solution. "SaaS is a key deployment mechanism that has the potential to allow companies an approach that minimizes Total Cost of Ownership (TCO)," said Nari Viswanathan, principal analyst, Aberdeen and co-author for the report. "But the key question we sought to answer in the report is how does SaaS allow companies to realize the business Return on Investment (ROI)?"
Some of the process and organization capabilities that Best-in-Class companies show include:
1. Three times as likely as all others to select vendors that provide toolkits or APIs that support integration requirements for SaaS solutions
2. Two times as likely as all others to have clear process definitions between SaaS and on-premise solutions
3. 1.8 times as likely as all others to have IT organization support for SaaS solutions
4. 1.4 times as likely as all others to have CFO support for SaaS solutions
"Companies do not have the luxury of doing large-scale IT implementations with customizations, especially with the shrinkage in capital markets. Companies need to still solve critical business problems--the approach to do that is to look at the Return on Investment (ROI) as the parameter that impacts the most for software investment decisions. The combination of short implementations and rapid payback is difficult to achieve but is critical for enterprises to achieve," says Viswanathan. "SaaS solutions offer a viable approach for enabling rapid business ROI with minimized Total Cost of Ownership in key areas of supply chain management such as supply chain execution, procurement and sourcing as well as supplier/customer collaboration."
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