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2018 ERP Update: Are the mega-suite vendors taking over supply chain management?

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With 58% of shippers committed to their enterprise resource planning (ERP) vendors, the key players are casting an even bigger shadow on the supply chain management space.

Well equipped to handle any inventory, human resources, customer relationship management, order management, reporting or accounting task that’s thrown at it, the modern day enterprise resource planning (ERP) platform is an all-encompassing piece of software. By integrating numerous functions under one umbrella, ERPs stand out on their ability to streamline important business processes and serve as information-sharing platforms for organizations and their business partners.

Not quite ready to rest on those laurels, mega-suite vendors like SAP, Oracle, Infor and NetSuite have been making a slow-but-steady progression into the supply chain management (SCM) space. As a result, transportation management systems (TMS)warehouse management systems (WMS), and global trade management systems (GTM) have become popular choices for shippers looking for a one-stop-shop to help them achieve end-to-end supply chain management and visibility.

The proof is in the numbers: According to the most recent “Gartner Supply Chain Technology User Wants and Needs Study,” nearly six out of 10 companies (58%) are now “largely committed” to a single or primary mega-suite platform vendor. These shippers strongly favor their mega-suite (ERP) vendor for SCM solutions unless that vendor lacks an offering or if its offering doesn’t meet the company’s basic requirements.

Dwight Klappich, Gartner’s research vice president, says that in most cases companies will explore other options before, say, selecting their mega-suite vendor to handle their transportation or warehousing technology needs. In other words, they’re not 100% biased. “However,” he points out, “many times these shippers are committed to the ERP platform and want to minimize the amount of ‘other stuff’ that they’re using.”

Of the 58% of companies that are largely committed to their ERP platforms, 65% of them are “strongly biased” to using those platforms for SCM. Thirty-five percent of firms say they select the best SCM solutions for their businesses, and will only turn to an ERP if the latter’s capabilities fully meet or exceed their requirements.

“There’s clearly a significant emphasis on the mega-suite vendors’ supply chain suites,” says Klappich, who credits the “good enough is good enough” mindset as a key driver of this trend. Put simply, as the ERPs have added SCM functionality to their suites, shippers have adopted these solutions with the knowledge that those WMS, TMS, and GTM solutions may not be as robust or full-featured as the best-of-breed offerings—and that’s okay with them.

“The marketplace has matured to the point where current customers aren’t necessarily the most complex, sophisticated or demanding,” Klappich says. “As a result, their needs are satisfied by their mega-suite vendors’ offerings and there’s not a lot of need or desire to look at anything else.”

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Article Credit: Logistics Management

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