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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

New IDC Research Quantifies Value of Cloud for SCM

Guest Author

Michele Becker, Senior Content Strategist,

Digital transformation has become top-of-mind for executives in supply chain management (and everywhere else, for that matter), but what’s the true payoff for companies that embrace it? Recently, we set out to find answers, engaging industry analyst firm IDC to interview Oracle SCM Cloud customers and quantify the benefits of their move to cloud.*

IDC’s research found that Oracle SCM Cloud customers had a truly impressive five-year ROI of 267%, a 12-month breakeven and 28% more productive supply chain teams, among other benefits such as:

  • 36% faster delivery of new products
  • 1.6% higher revenue per organization
  • 6% lower material costs
  • 38% more productive SCM-related development
  • 44% more efficient customer support teams
  • 62% faster resolution of release errors

IDC’s analysis showed that benefits like these translated into significant financial gain for study participants—namely, an average annual value of $264,400 per business application per year, equating to $4.91 million per organization. These gains came from the organizations’ ability to win more business by delivering more products on time and at higher quality, as well as to increase employee productivity, lower operational costs, and increase efficiencies in SCM-adjacent teams, like customer support.

Digital transformation drivers in SCM

Many of the findings in the Oracle-commissioned IDC research are in lock step with the latest IDC Supply Chain Survey, published biannually. Among the more intriguing findings in its 2018 Supply Chain Survey, respondents felt that the top driver of supply chain change was the adoption of new digital technologies—something greatly streamlined by leveraging a cloud platform.

In this 2018 survey, IDC further states that:

  • 60% of companies noted that meeting customer/consumer needs was the driving force behind their supply chain transformation efforts.
  • 75% felt that the cloud was a critical element to delivering supply chain excellence both today and into the future.

Looking across both the Oracle-commissioned report and the 2018 SCM survey, IDC research findings reinforce two developments that we at Oracle repeatedly see across the supply chain market and hear directly from our customers.

First, supply chains are moving from being seen primarily as a cost center to a strategic enabler that creates business opportunities. Indeed IDC research bears this out. IDC analysts note, “While the specter for disruption may be in the back of supply chain executives’ minds, the opportunities for digital transformation to drive productivity gains are front of mind.”

Secondly, cloud has become a critical success factor for digital transformation. Not only does having a cloud platform streamline adoption of the emerging technologies essential to that transformation, but as IDC notes, “cloud is a major component in this thinking, being both faster and more flexible to support increasingly low-latency business models.”

Learn more about IDC’s SCM study

If you’re interested in learning more, we invite you to join Oracle and IDC for an August 7 webinar: Just the Facts Ma’am - The Quantitative Benefits of Oracle’s Supply Chain Management Cloud. During the webinar, we’ll explore results of IDC’s new SCM study, as well as share insights on digitally transforming your supply chain to unlock new business value and create competitive advantage.

 

*Source: IDC White Paper sponsored by Oracle, Making Supply Chain Operations More Effective and Efficient by Moving to the Cloud with Oracle SCM Cloud, Doc #US43808718, June 2018.

 

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