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"The use of the Internet as a communication medium and the increase in business-to-business e-commerce are fueling supply chain services growth," IDC says.
Supply chain services are in high demand. According to IDC, the worldwide market generated $23 billion in 2000 and is on a pace that will bring it near $83 billion by 2005.
"The use of the Internet as a communication medium and the increase in business-to-business e-commerce are fueling supply chain services growth," said Ting Piper, program manager for IDC`s Supply Chain and eLogistics Services research. "B2B e-commerce spurs the need for automation of supply chain processes among multiple parties and increases the need for timely supply chain implementations done by specialized providers."
According to a report from IDC released over the summer, North America and Western Europe represent the largest opportunity for supply chain services, generating 95% of worldwide revenues in 2000. In 2005, they will still hold a commanding 88% share.
"Because North America was the first to embrace b2b e-commerce, it`s no surprise that the majority of supply chain services projects were executed there," Piper said. "Additionally, both North America and Western Europe have strong traditions of outsourcing their supply chain implementations to third-party vendors whereas in other regions of the world, organizations rely on their own IT departments."
Industry-centric and enterprise collaborative supply chain projects will present increasing opportunities in the near term, IDC says.