More small business are using SCM software

Software Advice, a Gartner Company, provides detailed reviews and research on thousands of software applications. The company works with buyers to identify supply chain systems that will meet their needs; therefore, making the buying process a little less murky and arduous.

Software Advice recently released the report: Supply Chain Management Software, BuyerView.  The report is based on findings from discussions with supply chain management (SCM) professionals across industry verticals who are seeking to deploy new software solutions.

We talked with Forrest Burnson, Market Research Associate at Software Advice, about the report and its findings:

What were the biggest take aways from the research?

Businesses both large and small are investing heavily into supply chain management software. They’re realizing the power of big data within their organizations and they’re looking for specialized software solutions to help increase visibility into their supply chain. All too often many of these businesses are being hindered by outdated systems and processes.

Where there any surprises?  If so, what were they.

Nothing too surprising, though I was definitely a little surprised by the budget estimates the prospective buyers were providing. It makes sense though: Prospective buyers of SCM software tend to be quite savvy, so sticker shock doesn’t affect them as much—they know have an idea of what they’re looking for and they’re willing to fork the money over because they realize the benefits this software can have on their organization.

Do your findings point to any trends (current or future) within the industry?

Software is becoming increasingly important in supply chain management, and more and more smaller businesses are catching on to that trend. Even five years ago there weren’t as many solutions available for SMBs that there are now.

Only 6% of small businesses use commercial SCM software.  Why is this?

Many of the smaller businesses got by without commercial SCM software for years, but it’s just not possible for them to continue with their old methods. This also presents a huge opportunity for SCM software vendors, as the SMB market has been historically underserved.

How does it compare to the percentage of larger businesses?

Twenty-one percent of large businesses we spoke with were currently using SCM software.

Small businesses are budgeting more for SCM software.  Why is this?

A couple reasons—there are more solutions available to them at a lower price point, and economic pressures are forcing many SMBs to adapt and evolve. That they’re budgeting more tells us that they recognize not only the cost but the return on investment it can potentially have.

Are large businesses also budgeting more? 

Yes, we found they are budgeting approximately $171,000 for new SCM software.

To learn more, access the entire report.