Companies Need to Re-Architect Supply Chain Application Portfolios, Forrester Research Says

Globalization and Aging Internal Systems Among the Factors Driving New Supply Chain Solutions; Keys to Getting New Projects Approved

No one denies that the business and supply chain worlds are changing rapidly, with an incredible array of new forces and pressures on supply chain and logistics professionals. (See The New Supply Chain Perfect Storm.)

Common sense says that with these rapid changes in the environment and market conditions, a company’s existing supply chain and logistics software applications – which were likely deployed in far different times, and perhaps for business drives that have changed dramatically – may need to be retooled.

That’s certainly the position of Patrick Connaughton, an analyst at Forrester Research. In a recent research report, Connaughton says that “Saddled with inflexible and heavily customized legacy systems, countless supply chain operations are urgently in need of a large-scale IT modernization and transformation effort. Some have flat out reached a point where they can no longer compete or expand globally without a complete rip and replace of their systems.”

Of course, companies facing this reality may be tempted to think they can “outsource” their way out of the dilemma, but that is an unlikely route to solving the problem, Connaughton argues. The systems of “logistics service providers are often just as archaic,” he believes.

Despite this scenario, relatively few companies have major supply chain software upgrades planned. According to a recent Forrester survey, about 11% of companies were planning any major supply chain technology upgrade in 2008.

“That leaves the remaining majority doubling down on legacy investments, essentially bringing new innovation to a standstill,” Connaughton adds. Part of the challenge is that in recent years, concern about rising IT costs, combined with a slowing economy, means companies are putting any new software initiative under “detailed scrutiny,” Connaughton says.

Source by scdigest.com