Investment in Customer-, Supplier-facing Apps Will Drive Integration Spending

Heterogeneity of "edge-of-the-enterprise" solutions forcing companies to rethink supply chain integration strategies — Yankee Group

Heterogeneity of "edge-of-the-enterprise" solutions forcing companies to rethink supply chain integration strategies — Yankee Group

Boston — December 4, 2003 — Nearly three-quarters of enterprises increased spending on applications that improve interactions with customers, suppliers and service providers in 2003 compared to the previous year, but this investment will drive up spending on supply chain integration solutions, according to a new report from technology consultancy Yankee Group.

A Yankee survey of 78 end users revealed that 71 percent of companies had increased spending on what the consultancy calls "edge-of-the-enterprise" applications, or customer- and supplier-facing applications. Spending on such technology rose more than 75 percent in 2003, albeit from a limited base, the consultancy reported.

"Some prognosticators say IT can no longer deliver competitive advantage, [but] nothing could be further from the truth," said Jon Derome, Yankee Group business applications and commerce program manager. "The opportunity to automate interactions with customers, suppliers and services providers and streamline the value chain can deliver powerful business capabilities and impressive returns. Companies are investing at the edge-of-the-enterprise to reap these benefits."

Derome said that to meet business objectives at the edge-of-the-enterprise, companies must integrate disconnected back-office systems into coherent edge applications. "Opportunities at the edge of the enterprise are impressive," he said, "but not without risk. There is no clear road map, nor are there well-defined applications to automate processes at the edge. One thing is certain for edge solutions — heterogeneity will reign supreme."

To combat the technical inconvenience heterogeneity imposes, companies must invest in effective supply chain integration solutions, Derome advised, adding that integration technologies will underpin any successful edge-of-the-enterprise solution.

"Organizations must articulate objectives, understand supply chain integration complexity and assess resource availability," the consultant said. "With this information, decision-makers can apply appropriate integration infrastructure to the organization's edge-of-the-enterprise needs."