Thursday, July 17, 2003

With hype gone, spending on supply chain connectivity is trending back up

In an encouraging report, the Yankee Group is projecting that supply chain management (SCM) spending for B2B connectivity will grow 12% in 2003 and will continue upward for the next three to five years. According to Yankee, investments by major players such as Intel, Cisco, Dell, Sun, Wal-Mart, and Home Depot, are driving their trading partners to make corresponding investments.

The report points to "direct connect" approaches as the leading topology for electronic connection, with EDI over the Internet (EDIINT and AS2) platform showing strength in several industries, RosettaNet gaining traction in the high tech supply chain, UCCnet becoming dominant in the retail supply chain, and CIDX gaining ground in the chemical vertical.

Software and services vendors who are benefiting include those with strong orientation toward EDI, such as Sterling Commerce and GXS, as well as vendors leading the charge in EDI over the Internet (EDIINT), such as SPS Commerce and Cyclone Commerce. Major enterprise system vendors, such as SAP, Oracle, and Microsoft, that have introduced similar capabilities for supply chain connectivity should also benefit.

For more discussion regarding Internet-based EDI and the impact of Walmart's mandate to its suppliers, see my post on Sept. 17, 2002.

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