Long Tail Opportunities for SCM Vendors
Challenges thrown up by the disruptive New Economy
o Major Churn in the Offing
As we approach the last quarter of 2007, we seem to be on the verge of the next round of major churning in the solution space for Supply Chain Management (SCM) and ERP software. This is already evident from customers who are starting to feel the sharp need for extreme /mass customization of solutions, specific to their pain areas.
Customers will want to see the following functionality added to their solutions:
1. Process and Standards Compliance tools
While Regulatory Compliance solutions abound, customers are feeling the need to govern the growing risk in terms of compliance with standards and processes:
o Work-flow governance
o Process compliance
o Standards Assurance.
2. Risk Management tools
This is a major pain area today, and B2B customers seek functionality to help in planning for - and recovering from - the increasing incidences of supply chain disruptions:
o Recovery from major disasters whether natural or man-made, and integration of 'alternate-flows' in terms of business continuity planning
o Tackling the risks of increasing fragmentation and over-extension of supply chains
o Security management systems for supply chains (as per the ISO 28000 series).
3. Environmental Management (EM) tools
EM is reaching a level of complexity that is becoming difficult for most corporates to handle:
o Waste Management, End-of-lifecycle disposal, Environmental Remediation (cleaning up of waste disposal sites)
o Regulatory Compliance
o Lean Green practices through the supply chain.
4. Working Capital Optimization tools
From the material-centric view of the past, B2B customers are asking for Financial SCM functionality integrated into their supply chain management solutions:
o The standard functionality in terms of tracking of Trade Debtors and Receivables, Cash flow and Inventory Management, and Contract Management
o Tackling value erosion through the supply chains
o Tools to help rapidly quantify the feasibility of mass customization of products for micro-segments.
o Window of Opportunity
There is thus a huge Long Tail for enterprising vendors to take advantage of , though with some caveats:
o These on-demand apps should incorporate well-defined metrics that can clearly demonstrate bottom-line benefits
o Customers want this added functionality sliced-and-diced as add-on software which can integrate into their existing solution suites
o Preferably, these should be complementary to the offerings of the giants in the SCM space: SAP, Oracle, and the like!
