News

Aberdeen: SOA Driving Supply Chain Innovation

• By Kathleen Ohlson
• October 17, 2005

Service-oriented architecture is helping companies expand the capabilities of their supply chain, according to a report released by the Aberdeen Group.

From the responses of approximately 300 executives, 45 percent of companies have SOA or Web services projects geared to SCM underway. Almost 20 percent of respondents plan to launch similar projects over the next 12 months, according to Aberdeen’s report, “Service-Oriented Architecture in the Supply Chain: What Supply Chain Managers Need to Know.”

In today’s enterprise, supply chain management is supported by a variety of software applications and services that aren’t integrated or flexible enough to meet changing business requirements. Enterprises’ technology constraints are causing high integration costs and incompatibility between application portfolios.

More than 60 percent of respondents say they either have standardized or plan to standardize on common ERP platforms for supply chain management.

“We found that when companies do indeed compete with their supply chains, most are entering the battle with their technology arms tied behind their backs,” says John Fontanella, an Aberdeen analyst. “Service-oriented architecture gives companies the very real opportunity to accelerate information integration while configuring business processes that can quickly meet internal and trading partner requirements.”

Other findings in the report include:

• 94 percent of the respondents say their businesses use a combination of best-of-breed applications, on-demand services, ERP systems and desktop applications to manage supply chains.
• The flexibility needed from supply chain applications outstrips enterprises’ ability to provide it, Aberdeen says. Sixty-one percent of respondents say they use manual processes to meet customer requirements, or deny customers their requests.
• Companies most likely to adopt SOA tend to buy apps that fit their current technology requirements the best. They are also less likely to have a corporate-wide ERP consolidation program in place.