Increasing Need for Demand Management Solutions Leading to Growth of Cloud SCM Market

The cloud supply chain management market generated revenue of $3.3 billion in 2016, and it is further predicted to grow at a CAGR of 19.2% during 2017–2023 (forecast period). The major factors driving the growth of the market are the increasing need for demand management solutions, cost advantages of the software, and growing adoption of cloud SCM for transportation management. Using functions such as mobility, social media activities, and data analytics, cloud SCM enables business organizations to track a product throughout its lifecycle.

The increasing need for demand management solutions is one of the key factors driving the growth of the cloud SCM market. Demand management solutions help generate statistics-based forecasts from recent events, data, and casual factors for internet-dependent organizations. To assess supply restrictions, customer commitments, financial predictions, and inventory count, demand management enables an automated ecosystem. 

Another reason behind the growth of the cloud SCM market is the cost advantages of cloud SCM over the on-premises management of the supply chain. As cloud SCM offers pay-per-usage licenses and requires minimal IT setup, businesses are adopting it to minimize their operational costs and transform their processes. Cloud SCM providers are also working on upgrading their portfolio, which is expected to reduce the solutions’ costs further. For example, Oracle SCM Cloud has become popular in the recent years, as it provides enhanced features, which allow for cost reduction.

When service is taken into consideration, the cloud SCM market is categorized into managed services, support & maintenance, and training & consulting. Among these, the training & consulting category occupied the largest share of the market during the historical period (2013–2016) and is expected to retain its position during the forecast period. This is due to the increasing adoption of cloud SCM by various companies. The lack of trained employees to deal with company data on the cloud is also predicted to increase the demand for training & consulting services during the forecast period. 

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On the basis of deployment type, the cloud SCM market is divided into public, hybrid, and private cloud. Out of these, hybrid cloud held over 50.0% share of the market in 2016, and it is predicted to still be the largest division throughout the forecast period. However, all three categories are expected to grow significantly during the forecast period as these provide demand management, lower infrastructure cost, improved scalability, and order and transportation management benefits to organizations across various industries.

Hence, the growing e-commerce market, rising need for demand management solutions, and cost advantages of cloud SCM solutions are furthering the growth of the market.

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