Supply Chain Problems: Big Vendors Don't Care

Some CIOs, according to Beth Enslow, senior VP of enterprise research at Aberdeen Group, seem to be waiting for their enterprise vendors to solve their supply chain technology problems for them.

They could have a long wait ahead of them.

On-demand supply chain applications just aren’t their ERP vendors’ core competency. “PeopleSoft, even with 300 different software modules, did not have an EDI translations software suite,” says George Muller, VP and CIO of Imperial Sugar, who uses Sterling Commerce’s services for order management and inventory. “PeopleSoft would handle everything very well within [our] four walls, but outside the four walls, PeopleSoft was behind the curve.”

A possible reason for ERP vendors’ reluctance to develop tools to integrate their customers’ systems with their suppliers’ and customers’ systems is that it would impact their business model: selling on-premises software to a captive customer base. With the new, hosted model, customers of the enterprise software vendors could conceivably “turn off” the connection and go to someone else if they chose.

Representatives from SAP and Oracle, the biggest enterprise systems vendors, say that they are following the on-demand, hosted SCM market with interest, but, so far, don’t have anything to offer. “We are looking at the demand for this market, but we are not yet offering an on-demand model with these kinds of solutions,” says Hans Thalbauer, VP of supply chain management solution management at SAP.

“When you look at that opportunity space, that is not a service that Oracle has much interest in and competency in,” says Julian Trotman, director of enterprise integration applications development at Oracle.

However, both point to their companies’ fledgling on-demand CRM offerings to illustrate their technical capabilities within the on-demand model. “It’s a model that we’ve tried to hone over the last three to four years,” says Trotman. “It’s going to be a large part of our business going forward.”

As for the rise of the on-demand SCM vendors, SAP’s Thalbauer doesn’t seem too worried about E2open, GXS and the others. “I don’t view them as a threat,” he says.

Copyright © 2006 IDG Communications, Inc.

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