After a disruptive year for global governments, businesses, and populations in 2020, the other shoe has fallen to expose the vulnerability of global supply chains. Gartner, the well-respected IT research and advisory company, has released their guidance on the software category for Supply Chain Management. While this was released in June of 2021 when the supply chain ‘crisis’ was beginning to be realized in the United States, it contains many valuable insights for manufacturers and supply chain leaders to consider going into 2022 and beyond.

Perhaps Gartner’s most forward-looking recommendation balances on the cusp of what manufacturers and suppliers are facing going into the holiday season of 2021:

  • Establish a supply chain application strategy that underpins business outcomes by having the right mix of solutions to support a stable environment while at the same time being open to rapid innovation.

Of course, a desire for any business—especially one that relies on a vast and complex global supply chain—is ‘stability’. When the distribution plan for an overseas manufacturer depends on 2-4 weeks on a ship and as much as a week more by truck or train, a “stable supply chain” is expected. But when any link in that chain is disrupted, that stability comes crashing down. Thus is the state of the supply chain coming into the fourth quarter of 2021. Gartner’s recommendation to seek solutions that are open to “rapid innovation” could not be more prophetic. How those innovations might help resolve the crisis is unclear as of this writing. How rapidly those innovations took root will be analyzed in next year’s rear-view mirror.

However the supply chain crisis of 2021 is resolved, it will be clear to all who rely on distribution that agility will be the key to a future state in the SCM technology space. How will companies be able to respond (or even react) to the next disruption? As Rootstock is a Supply Chain ERP on the Salesforce Platform, we can clearly see the path to rapid innovation. The ability to quickly deploy targeted solutions that are available on the Salesforce AppExchange is well understood by our customers. Even for solutions that are not natively on the Salesforce Platform, the rapid integration capabilities of Salesforce’s Mulesoft middleware solution makes adoption easy. Perhaps the most important weapon in the arsenal will be the most basic of supply chain software features—connectivity and visibility.

Blog Summary

As Gartner states, the supply chain management (SCM) software market is mature but like the rest of the technology space is rapidly evolving against the backdrop of digital transformation. As in other market segments, IT leaders need to reevaluate their business needs considering the traditional markets for SCM solutions as well as the broader supplementary markets.

As indicated above, one of their key findings is that striking a balance between stability and innovation is the leading challenge for IT leaders. Unfortunately, the challenges for leaders focused on the bottom-line are more immediate and disruptive. Gartner’s recommendation is to establish SCM strategies that are focused on your business outcomes. For 2020 and 2021, that may just be survival…

Gartner found that the SCM applications market is extremely diverse and spans a wide range of providers from large-scale suite solution providers to specialist niche providers with new value-added capabilities. Their recommendations for responding to this finding hint at the above comment for the AppExchange. When analyzing application characteristics, they recommend focusing on the underlying architectural model. Without a common architecture like the open Salesforce Platform, deployment of “innovations” will be more difficult and less “rapid”.

Gartner also outlines that investments in innovative SCM solutions favored SaaS vendors whose offerings were easier to use and deploy. This is not likely the case with the dominant players in the space who market ‘megasuites’. Those players offer a broad swath of SCM portfolios that address the aforementioned supplementary extensions and represented more than 57% of the market in 2020. Their recommendation is to evaluate application portfolio vendors against their respective platforms in the context of your actual supply chain maturity.

Finally, Gartner found that solutions have evolved from enterprise-centric to multi-enterprise solutions and beyond. While evaluating this plethora of offerings, it is Gartner’s advice to favor SaaS vendors that can quickly deploy those innovative solutions into a heterogenous application ecosystem.

Rootstock concurs.

Learn more about Gartner’s “Supply Chain Management Software Market Overview, 2021” here.