Digital Supply Chain Transformation: CIOs Key Challenges and Opportunities

Digital Supply Chain Transformation: CIOs’ Key Challenges and OpportunitiesBy their very nature, supply chain operations are among the most diverse and complex of a company’s business activities. These operations not only involve many outside players—manufacturers, service providers, and logistics and transportation companies, among others—but also touch on virtually every department within the enterprise.Just as important, a company’s supply chain is directly influenced by shifts in customer preferences and needs, by new competitive pressures, and by changing market and technology trends. Companies that can’t quickly adapt their supply chain in response to the evolving digital business landscape may severely limit their long-term success—or even survival.Given their complexities and challenges, supply chain operations will benefit enormously from many of the same technologies powering digital transformation in other areas of the enterprise, including big data analytics, the cloud, artificial intelligence (AI), and the Internet of Things (IoT). Most companies are well aware of this synergy and its business potential. Nearly 90% of 150 U.S. companies recently surveyed by IDG either already have a supply chain Market PulseWHITE PAPERDIGITALLY SAVVY ORGANIZATIONS ARE LEVERAGING THE CLOUD, BIG DATA ANALYTICS, IOT, AND AI TO CREATE AN AGILE SUPPLY CHAIN THAT CAN RESPONDQUICKLY TO CHANGING BUSINESS DYNAMICS AND CUSTOMER REQUIREMENTS.MARKETING SERVICESSponsored contentIDG Communications, Inc.digital transformation strategy in place (42%) or are creating one (47%).The IDG survey—which polled IT decision-makers with director or higher-level titles working at companies with at least 2,500 employees—provided a range of insights into the supply chain challenges companies face, the types of benefits they have already realized from supply chain transformation, and the technologies and strategies likely to prove most impactful in aiding those efforts.Today’s Supply Chains: Integrated but Not SeamlessIn its survey, IDG found that almost all of the companies were using ERP software to one degree or another to manage supply chain operations. Slightly over half (54%) of the respondents were using a mix of ERP-based and non-ERP/standalone solutions to meet their supply chain needs, and another 43% were using a single end-to-end ERP solution. 2 DIGITAL SUPPLY CHAIN TRANSFORMATIONRegardless of their technology profile, respondents said supply chain operations were tightly integrated. Among the respondents, 26% said they had complete integration (9–10 on a scale of 10) across their supply chain systems, and nearly half (47%) claimed to have a very high level of integration (7–8 on a scale of 10). Respondents at companies with a digital supply chain strategy in place were especially confident about their integrated operations: 44% claimed an integration ranking of 9–10.If the respondents were bullish on integration, however, they were much less confident about the functionality and capabilities of those operations. For example, 72% of the respondents said it was extremely or very challenging (7–10 rating) to provide information to suppliers and partners at the speeds they require.The top challenge (46%) companies faced in enabling seamless data and information flow: meeting data security and compliance needs. But this concern was just one of nearly a dozen hurdles that 20% or more of the respondents identified as impediments to seamless data flows. As shown in Figure 1, more than 70% said each of the six challenges was very or extremely challenging.Cloud: The No. 1 Driver for TransformationSimply put, companies need a platform that provides a unified, real-time view of the entire supply chain, encom-passing everything from demand forecasting and planning to inventory, warehouse management, and logistics. Without such end-to-end visibility, companies will be hard-pressed to Market Pulseobtain the information they need in order to make decisions efficiently and effectively.In the effort to achieve this goal, no technology is more critical than the cloud, which tops the list of the most important solution characteristics for meeting supply chain objectives. Notably, the cloud surpassed even enterprise-level security, which ranked second; cybersecurity commonly tops the list of company concerns, regardless of the business topic at hand.Respondents listed a variety of reasons for adopting cloud-based solutions. Among them: •68% – Cost savings and efficiencies• 63% – Improved ability to integrate and take advantage of emerging technologies• 63% – Better ability to enable automation of processes• 61% – Improved ability to collaborate with suppliers andpartners• 60% – Improved speed and agilityNot surprisingly, the widespread enthusiasm for cloud-based solutions is driving a rapid shift in how companies execute supply chain operations. Although half (51%) of the respondents’ supply chain operations currently run on legacy, on-premise