Supply Chain Investment Looks Attractive to High-Tech Companies

AMR Research recently completed spending surveys with companies across numerous industry categories. For companies in High-Tech (including Computing, Telecom, Electronics, and Semiconductor), there was a significant shift in the amount of money allocated to supply chain applications: from 13% in 2003 to 16% in 2004.

The Bottom Line: High-Tech, as it has done in the past, will lead the resurgence in supply chain technology investment. Expect demand for supply chain information services to pick up.

What It Means: As investment picks up, some questions will arise:

• Where will the money be spent? High-tech clients report that investment will be used to establish higher levels of integration with trading partners. Part of this will target connectivity, assuring that information is exchanged in a reliable and timely matter, and part will be for orchestrating complex processes across multiple supply chain tiers. The Takeaway: Industry leaders like Arrow, Cisco, Dell, Hewlett-Packard, and Seagate have already invested considerably to prove the concept. The next wave of investment will come from a much larger group of followers now ready to take the B2B plunge.
• What vendors are likely to have the technology that companies need? Last week, IBM inked an agreement with private trading hub operator Viacore to resell its services. Viacore, which has established battle-tested B2B operations and monitoring capabilities, adds a valuable element to IBM’s offering. IBM also has a considerable stake in E2Open, which gives it the ability to offer domain-rich process automation to high-tech companies. The Takeaway: With its tremendous resources for high-tech companies, IBM should be on most short lists.

Conclusion: If your company participates in the High-Tech supply chain, you must revisit your e-business strategy and adjust for new market realities and the lessons learned by the early adopters.

AMR Research originally published this article on 14 August 2003.