IDC Expects Heavy Demand for Supply Chain Services

FRAMINGHAM, MASS – SEPTEMBER 18, 2000 – With the Internet quickly becoming a global channel for business-to-business integration, opportunity for providers of supply chain services is booming. According to IDC, revenues in the worldwide market will explode from $25 billion in 1999 to almost $140 billion in 2004.

"Organizations that want to stay competitive in the digital economy have turned to their supply chain as a source of not only short-term financial improvements but also long-term competitive advantage in terms of cutting-edge business integration and delivery models," said Nelly Zaharinov, senior analyst with IDC's Supply Chain Services research program. "This need to overhaul their supply chain is making them seek the assistance of supply chain service providers, and these types of projects will drive growth in the industry for the next few years."

In addition to being larger, the supply chain services market will significantly change in many other ways over the next few years. "The projects will become increasingly complex, the number of technology solutions and media available will multiply, the competition will intensify, and clients will have higher expectations," Zaharinov said.

According to IDC, these changes will force vendors to enhance their supply chain service portfolios to deliver a full range of solutions. Another offshoot will be more alliances with software vendors who deliver Internet-enabled supply chain management products and other ebusiness applications.

An expected change in the market will be the deemphasis on supply chain implementation services and increased emphasis on operations management services. In 1999, implementation generated 46% of supply chain services revenues. By 2004, its share will fall to 24%. Meanwhile operations management services will become much more important. The market share of this segment will more than double from less than 13% in 1999 to almost 31% by 2004.

"Clients are beginning to look for a complete solution comprising implementation and operations management services, as opposed to just discrete implementation as they had in the past," Zaharinov said.

The above information comes from IDC's new report Supply Chain Services: Worldwide Market Forecast and Analysis, 1999-2004 (IDC #B22486). The report looks at the supply chain services industry and forecasts revenue growth through 2004 segmented by region, service line, and industry. Additionally, the report talks about the major factors driving and inhibiting market growth, analyzes market trends, and looks at client needs. It concludes with recommendations to service providers as well as end users. To purchase the report, contact Jim Nagle at 1-800-343-4952 at extension 4549 or at jnagle@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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