ERP market analyst Michael Koploy alerted me to his recent 2011 Warehouse Management Systems Market Trends report which provides some rather interesting observations. (Summary findings preview or Free download after user registration)

The report notes that an improving economy is giving buyers the confidence to tackle long-postponed logistics upgrades.  It notes that many smaller businesses have outgrown their current systems, or their ability to operate without a robust WMS. Also noted is that ERP vendors have managed to close functionality gaps and that their account control is tipping selection decisions towards the resident ERP.

Even more interesting is that the report also concludes that while a lot of small and medium businesses are leaning toward cloud-based WMS options, significant concerns remain for prospective buyers.  The report rightfully points out that logistics and operational managers are sometimes slow to adopt new software deployment models, favoring instead applications that have had a solid track record of successful deployments. Security of data within systems that are hosted off-site remain a potential deal breaker. I have heard this observation from other analysts, and I wonder whether these objections stem solely from operational teams, IT teams, or senior management itself.

Supply Chain Matters has been an advocate for cloud computing options in various supply chain applications, both planning and execution related. The potential savings in implementation time, required IT infrastructure and life-cycle software maintenance can be substantial. However, these lingering buyer concerns need to be adequately addressed by technology providers.

In an effort to provide some further clarity on buyer concerns related to cloud based applications, we have initiated a new Supply Chain Matters interactive poll which is displayed in our right-hand panel, about mid-way down.  We would appreciate readers taking some time to respond, and we will publish the results in a few weeks.

Bob Ferrari