Overall Spend on Supply Chain Software Increased 25% Over Past 12 Months

The most significant increase in software spend is in the finance department, with a year-on-year (YoY) change of 105%. In contrast, the product and operations departments witnessed a downturn in software expenditure.

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Overall spending on supply chain software has increased by 25% over the past 12 months, according to new data by Cledara.

“It's clear that current market conditions are necessitating strategic changes in software spend, most noticeably toward value-centric and mission-critical tools. SaaS providers should carefully construct their go-to-market strategies, placing emphasis on demonstrating value, utility and ROI in their offerings,” says Richard Gargan, analyst for Cledara, said:

From Cledara:

  • Top quartile companies, with a software spend of $190k-825k, saw an overall decrease in software spending, with the most substantial dip in February at -4%. Second quartile companies, with a spend of $108k-189k, experienced the most significant increase in August 2022 with a 12.9% rise but saw a significant decrease in May with a drop of 7.4%. Third quartile companies, with a spend between $41k-108k, experienced the highest growth in August 2022 with 8.8% and the lowest in June with a decline of 4.7%. Bottom quartile companies, spending between $1k-40k, saw the most significant increase in August 2022 with a 10% rise but also experienced the steepest fall of any group in December 2022 with a decrease of 11.1%.
  • The most significant increase in software spend is in the finance department, with a year-on-year (YoY) change of 105%. This surge suggests a major investment in financial software tools, driven by a need for improved financial analytics, forecasting, and management.
  • In contrast, the product and operations departments witnessed a downturn in software expenditure, with a decline of 11% and 24%, respectively.
  • With marginal growths, IT and HR have experienced a 14% and 13% increase, respectively, possibly due to streamlining of existing tools, cost-saving measures or the termination of underutilized software.
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