Well into the new year with the chaos of the holiday season over, many businesses resolved to get more organized by investing in products and services that simplify their work and reduce clutter. Getting organized can be an uphill battle with the huge amount of information, data and communications businesses generate every day. Two areas that businesses are focusing on in this effort are taking control of data and moving systems to the cloud.
Just like any New Year’s resolution, getting started on these initiatives can seem daunting, but understanding the price trends of relevant software and systems can help information technology (IT) and procurement professionals make smart buying decisions and stay on top of the surge in data.
Take Control of Data
Businesses are collecting, storing, processing and analyzing more data than ever. In fact, the growth of so-called big data is exponential and shows no signs of slowing down. Businesses in every sector are becoming overwhelmed with the amount of external data they’re gathering from customers, suppliers, shippers, markets, websites and more—not to mention internal data from employees, inventory, operations, accounting and other parts of the enterprise. Staying on top of this data deluge is becoming crucial for success. Luckily, there are many software options available that allow businesses to incorporate data-driven strategy into their daily operations.
Data management and query software, which allows users to pull data from multiple platforms, and then sort and organize it into an easily digestible format, is leading the data management trend. According to market research firm IBISWorld, the market is dominated by a small number of key providers, with the top four suppliers commanding almost 75 percent of the market. In addition, there are few viable substitutes for data management software, which limits buyers’ negotiating leverage. However, IBISWorld forecasts that prices of this type of software will go up less than 1 percent in 2015. This minimal growth is due to the intense competition among the top providers. Most of them are aggressively seeking to increase market share and will offer customers favorable prices in order to do so.
These market characteristics also apply to database management systems, which encompass a broader range of data management solutions, including storage and remote backup installation. Prices of these systems are expected to increase just over 0.5 percent in 2015. Equipped with this knowledge, buyers can gain the upper hand against suppliers despite a lack of strong market competition.
To stay on top of the mounds of data generated from newer technologies like radio frequency identification (RFID) chips and advanced point-of-sale systems, supply chain, inventory and procurement managers may also consider investing in supply chain management software. This software allows businesses to track and execute tasks related to purchases from suppliers, supplier relationship management, inventory control and more. With prices declining steadily thanks to the rapid fall in electronic component costs and steady competition from new software companies, now is an ideal time to purchase supply chain management software. In fact, IBISWorld forecasts that prices will drop 0.1 percent from 2015 to 2016. Buyers should be able to use this trend to negotiate low prices and favorable contract terms.
Move to the Cloud
With rapid developments in technology ever-increasing, businesses require more efficient ways to collect, store and disseminate information across their organizations. The growing use of mobile devices, laptop computers and tablets is placing increased emphasis on connectivity between multiple platforms, causing more businesses to move their systems to the cloud. Cloud-based software allows employees to stay connected by providing a single point to store documents, data, project details and other information, which can be accessible from anywhere on any device connected to the Internet.
One of the most effective ways for businesses to use the cloud is to manage and organize inventory. Instead of recording product deliveries, storage locations and outgoing shipments on an in-house server, businesses can keep track of their inventory via cloud-based inventory management software, enabling them to easily share information across multiple locations. Fortunately for buyers, the price of inventory management software is falling considerably thanks to dwindling input costs and an influx of competition from new providers, giving buyers excellent pricing leverage over suppliers.
Another useful cloud-based tool is mobile device management software. Mobile devices are becoming an important business platform, and this software helps businesses monitor their mobile devices and ensure that they work seamlessly with personal computers (PCs) and other systems. Mobile device management software is also getting cheaper as cloud solutions become more advanced and less challenging to develop. IBISWorld estimates that prices dropped an average of 8.6 percent per year from 2012 to 2015, allowing buyers of this software to negotiate some excellent deals.
Prices of cloud services in general are sliding as providers transition from a license-based pricing model to a value-based pricing model. Rather than paying a large fee upfront for access to the software, buyers pay for the specific aspects of the software that deliver the most value to them. With this new pricing model taking over the market, cloud services suppliers are adopting new strategies and software offerings, ultimately resulting in better value for buyers. As cloud-based services become more widely accepted, other types of software, such as data management and query software and database management systems, are being distributed via the cloud as well. Buyers should look to take advantage of cloud distribution because it often comes with reduced costs.
Now Get Organized!
Advances in technology mean that businesses are able to collect data on all aspects of their supply chain and operations. However, that creates the challenges of managing, accessing and analyzing all that data. Getting organized is critical in meeting that challenge so that big data doesn’t overwhelm the business. Luckily, in 2015, software and cloud-based services are available to enable businesses to get their data under control—and follow through on their resolution to get organized.
Scott Winters is a procurement research analyst at IBISWorld, which specializes in market research that encompasses price trends, major suppliers, supply chain risks and more. Winters holds a degree in economics from the University of California, Santa Barbara. The research featured in this article can be found at http://www.ibisworld.com/procurement.