Software as a service solutions gaining prominence in supply chain, says new Aberdeen report

BOSTON, Ma.According to a just-released Aberdeen Group report, software as a service (SaaS) solutions are no longer a niche application, but offer a viable option for all size companies looking to minimize in-house IT requirements and find immediate value and ROI in a technology implementation.

The study, entitled “The On-Demand Tipping Point in Supply Chain,” says CEOs and COOs at top supply chain performers are twice as likely to be supporters of the on-demand model, or SaaS. Report findings indicate a majority of on-demand supply chain management (SCM) users say they achieved operational status with their application in less than 3 months–and ROI in less than a year.

Traditional SCM vendors are preferred as an SaaS source by just 5% of respondents. Aberdeen also found that most traditional SCM vendors have application architectures built to support a single enterprise per software instance versus a networked community, and most lack the daily operational focus and support structures, and pre-connected trading partners that many of the specialist on-demand vendors bring to the table.

“The mystique of SaaS technology is disappearing, making it a viable alternative for companies of all levels of supply chain maturity,” says Beth Enslow, senior vice president, enterprise research and report author. “While current users of on-demand SCM tend to be above average supply chain performers, our results show the highest near-term interest in on-demand adoption is from below average performers.”
Current SaaS users report “overwhelming benefits” from the on-demand model. More than 50% of respondents say they are now using or considering using on-demand or SaaS applications, especially for externally facing processes with suppliers, customers, and transportation carriers.

Current SaaS users report strong benefits over on-premise applications in the areas of ROI, implementation speed, ease of upgrades, and customer service.