Combine robust software with a connected network of supply chain partners and deliver the entire platform over the Web on a pay-as-you-go basis and you have a model for next-generation supply chain solutions, says Greg Johnsen, executive vice president of GT Nexus.

GT Nexus already has developed this type of platform and is delivering it to its customers in global trade and logistics.

"First-generation on-demand or SaaS solutions were targeted at existing business processes where there may already have been software applications in place, such as customer relationship management and sales force automation," says Johnsen. This quickly spread to other businesses and a third iteration occurred with companies like GT Nexus, where applications were combined with a network. "In our business, if you have carriers, freight forwarders and 3PLs all trying to exchange information with a customer, you can do that on one system and one platform with the software applications riding on top."

The result is analogous to an electric power grid, he says. "In a lot of ways what we are doing in logistics and the supply chain is like a very big, ubiquitous utility, such as a power plant. You would never dream of building your own power plant to power your electric shaver -- you are going to use electricity from a utility. We see the delivery of a platform that has partners pre-connected to it and that provides on-demand applications as being equivalent to getting a very well connected power plant or grid that you simply plug into and don't have to build yourself."

This model is particularly attractive in the current economic climate, he says, because the total cost of ownership and level of risk is much lower. "A company can get a return on business process automation without spending a lot of capital or taking a lot of risks, so it is a perfect way for customers to jump in."

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