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Organizations that adopted supply chain management systems generally achieve a return on their investment within two years, but a Computer Economics study indicates it can be difficult to keep implementation and support costs within budget.
Figure 1 from our study, Supply Chain Management Adoption and Customer Experience, compares the adoption, investment, ROI and TCO rates of supply chain management systems against the rates for 13 other technologies commonly used in business.
There were 244 organizations worldwide surveyed from July to September 2012. The average revenue of the organizations was $2.1 billion a year and the median was $287 million. The other technologies surveyed were customer relationship management (CRM), data warehouse/business intelligence, ERP, human resource management systems (HRMS), legacy system renewal, mobile applications, social business and collaboration systems, desktop virtualization, infrastructure as a service, software as a service, platform as a service, tablet computers and unified communications.
Based on survey responses, SCM and the 13 other technologies are given numerical ratings on the levels of adoption, investment, ROI and TCO. Then, SCM technology is categorized as having low, moderate, or high rates relative to other technologies in the survey.
Interestingly, the ROI success rate is more positive than the TCO success rate. This indicates that the business case for SCM systems is strong: Some adopters must be achieving positive or breakeven ROI in spite of exceeding their budgets for SCM projects.
Competitive pressures, globalization and increasingly complex offshore manufacturing relationships are spurring organizations to expand their supply chain management (SCM) systems, which encompass a wide variety of technologies and capabilities.
The full study quantifies the current adoption and investment trends for SCM systems as well as the benefits that are driving companies to expand their SCM implementations. We assess these trends by organization size, sector and geography. In terms of economics, we look at the ROI and TCO experience of those that have adopted SCM along with current investment per SCM user. We conclude with practical advice for those considering investment in SCM technology.
This Research Byte is a brief overview of our report on this subject, Supply Chain Management Adoption and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).