Players in the European Supply Chain Services Market Lack Differentiation, says IDC

AMSTERDAM – JULY 24, 2001 – According to IDC, the market for services around supply chain applications will grow from $13 billion in 2001 to $34 billion by 2005 with almost 59% of the spending concentrated in just three countries: the UK, Germany and France. Large enterprises and the mid-market account for 69% of total spending with smaller business representing the remaining 31%.


Despite the recent slowdown in the economy in the US and now in Europe, IDC still forecasts strong growth in supply chain services spending. "Supply chain projects are long-lasting projects, which can take up to two years to complete. This means that clients will go on with their investments in the medium-term, although they might be postponing further projects," said Dominique Raviart, senior research analyst for IDC’s European SCM Services program. In the long-term, the supply chain services market will experience a compound annual growth rate of 28% until 2004.

According to IDC, the players that provide these services all suffer from a lack of differentiation in their service offering. "Most players claim to be providers of end-to-end solutions, and offer consulting, implementation and application management solutions on a pan-European scale," said Raviart. "However, the reality is that these claims are not always true. Few companies have such capacity. Despite different focus and skills, organizations have a hard time differentiating between players in the supply chain services field."

"As a result, players in the supply chain services market rely on recruitment and growth of their headcount to increase revenues, rather than gain a real competitive advantage. Were the supply chain services market’s growth to experience a slowdown, players in this field would face new challenges such as sustaining their growth or maintaining their profit margins," concluded Raviart.

Western European Supply Chain Services Forecast and Analysis, 2000 – 2005 (IDC#PM02H) covers the market of services around supply chain management (SCM) applications in Western Europe. It includes a market sizing and forecast of supply chain services broken down by country, vertical market, company size and solution type. Readers of this report will gain a strong understanding of the supply chain services market in Western Europe, of the major players in the area and of emerging markets. This report can be purchased at your local IDC office.

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