Supply Chain Management Gets SaaS

A recent headline in Industry Week stated that On-Demand Supply Chain Management Solutions (are) to Increase as Economic Pressures Accelerate, so I clicked on the link hoping for a new study that would indicate the further rise of cost-effective SaaS solutions in the SCM space. What I got was an article by Mr. John Sicard of Kinaxis, a vendor who offers Rapid Response Management On-Demand. But even though it wasn’t what I expected, I ploughed on, knowing that it was likely to contain some good tidbits as Randy Littleson, blogmaster of The 21st Century Supply Chain and a VP of Kinaxis, has been publishing some great pieces lately, and I expected that the article would build on them.

With many companies now outsourcing most, if not all, of their manufacturing operations to regions outside their target markets, which dramatically increases supply chain complexity and volatility, the need for supply chain management solutions is greater than ever. Add this to the fact that the precarious global market place is demanding more from corporate performance than ever before while stressing staff and budgets, and we have the ideal situation for SaaS offerings. By consolidating multiple traditional desktop SCM solutions into a single low-cost on-demand offering, companies can rapidly gain tangible benefits without stressing IT or the bank account because SaaS removes many traditional barriers to software adoption by minimizing ownership costs and implementation risks.

SaaS solutions generally deploy faster, cost less, and reduce risk when compared to traditional on-premise enterprise solutions and can be a much easier sell to finance departments willing to pay a small monthly fee for an immediate ROI rather than pay out a large sum for a system whose timeframe for return is uncertain at best — especially when you consider that software licenses, unlike physical equipment assets, tend to have 0 resale value. They can also be more flexible (especially since, if the vendor fails to perform, you can extract your data, terminate your contract, and move to a new provider next month), provide superior security (as they have IT security experts on staff while you don’t), and scale better, and faster, as they were built for the cloud.

Nothing SaaS converts didn’t already know, but it’s good to reiterate it regularly as new SaaS solutions come online every day and just because there wasn’t one that met all of your needs yesterday doesn’t mean that there isn’t one today. Keeping an open mind might allow you to find a great new solution at a cost that is but a fraction of the ROI it will return.