Enterprise Resource Planning vendors such as SAP and Oracle are making inroads into the supply chain, transportation and logistics solutions market. According to John Fontanella, Vice President of research at AMR Research Inc., ERP vendors now claim about 50 percent of the supply chain technology market.

“This year I asked 350 companies what they’re going to buy in technology — ERP, best-of-breed or build it yourself,” says Fontanella. “The response was split down the middle between ERP and best of breed. Every year ERP has been getting closer to the 50-50 mark.”

He notes that in the past a lot of the supply chain management and warehouse management functionality was “just on paper” at ERP companies. “Five years ago SAP and Oracle were very primitive,” says Fontanella. “When companies wanted sophisticated technology they pointed to the best of breed.”

In recent years, however, SAP and Oracle have improved their technology, Oracle through acquisitions and SAP through internal development.

Fontanella notes that very specialized and large-scale supply chain operations still tend to buy from best of breed providers. “If your company defines itself by supply chain management, most likely you’re using best of breed,” says Fontanella. He notes that integration into ERP is not much of a factor. While ERP supply chain tools are pre-integrated into business processes, best of breed companies have “integrated into ERP hundreds of times.”

As for getting executive permission to purchase supply chain technology, the ERP vendors have the edge. “If you have to convince the CIO, CFO and CEO, you have to build a stronger case of you want to go outside the ERP vendor,” says Fontanella. “In the executive’s mind, the costs will be lower with the ERP vendor because there is less complexity. But that’s not always the case.”

Source: Logistics Management

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

paperback student version $ 19,99 hardcover executive version $ 29,99

| Permanent Link | Print This eLog |

(Visited over 19693 times)