Predictions for the Next Ten Years

SaaS for the Supply Chain — The Next 10 Years

By Andrea Brody
GXS Vice President of Global Product Management

One might suspect that the ongoing value of Software-as-a-Service (SaaS) for B2B e-commerce will be focused around saving money. One of its key benefits is reducing the costs historically associated with buying, building and maintaining on-premise software. This new deployment model has indeed proven to be beneficial by offering an alternative to traditional licensed software models. Instead, SaaS organisations can subscribe to services built on a shared infrastructure via the Internet. Naturally, in B2B where two companies need to communicate and share data globally to conduct business, the SaaS model offers significant advantages. SaaS can not only reduce costs, but also increase adoption and trading partner participation with seamless process and technology integration across boundaries. But, the future of SaaS on B2B over the next 10 years will be so much more than that. It will be about the data.

Predictive Insights for the Supply Chain
With respect to increased adoption and seamless integration, the term “advantages,” not “benefits,” of SaaS was used. That is because increased adoption and simplified integration are just the means by which companies are able to share information related to the flow of goods and services across the supply chain. Today, all this information is stored behind the firewall in various systems both proprietary and non-proprietary. Locked with internal systems, the information provides limited visibility into what is happening across the global supply chain, or better yet, what is going to happen. Now imagine a world where every company participating in B2B by way of SaaS and cloud computing gains access to information they have never had before and in a cost-effective way. Imagine if all the data between companies traveling across the supply chain was harnessed to expose intelligence for all parties to take advantage of. In other words, by collecting and correlating the interaction of transactions between companies, the level of visibility to manage and predict supply chain activity within one’s own organisation goes up exponentially. SaaS enables that. Now we’re talking real benefit!

Competitive Advantage from the Data
Many companies have embarked on realising benefits of predictive insight. Retailer leader Walmart, for example, used predictive insight not only to stock some company stores in preparation for a major storm, but to do so with the kind of foresight that would meet specific customer needs. But most companies are not Walmart. Most companies do not have the resources to make the data available in this fashion. Providing predictive insights is an expensive proposition, especially in the area of collecting the information from multiple disparate data sources. Furthermore, even in Walmart’s case, visibility into the state of its entire supply chain, including suppliers and carriers, is still quite limited. Luckily, Walmart has the power to achieve a level of success in this situation while most other companies don’t have the luxury of getting even close. As SaaS matures, more and more data will be collected, tracked and analysed. Such predictive insights services have the potential to level the playing field for all B2B participants.

SaaS Becomes Mainstream
Even with advancements in Internet technology and data security, companies continue to express ownership, confidentiality and security concerns regarding their data being collected, correlated and published outside their organisation. After all, supply chain data is very sensitive. Many companies today are uncomfortable with the idea of their data being used outside of their span of control. CIOs maintain this attitude even when offered the assurance that data will be highly secure, aggregated and completely anonymous. As a result, most large companies still request installations behind the firewall. Over the next 10 years, as SaaS increasingly grows in user acceptance, companies will gradually become more comfortable with the model. This is hopefully something time and visionary CEOs will change.