In the previous blog, we touched upon SaaS as one option you can choose to innovate your current supply chain process. However, it’s often said that one of the benefits of SaaS are the supposedly large cost-savings.
True, it does look like you can reduce costs by having another vendor handle the expenses of infrastructure, security, maintenance and other vital IT processes. On the other hand, it’s only fair to acknowledge certain disadvantages.
For instance, that very same dependency on a third party vendor also means a lot of downtimes can happen should there be a major breach or sudden network problem. A lot of SaaS solutions are also geared towards general functions and don’t offer a lot of room for customizing it specifically for niche clients.
This doesn’t mean that SaaS solutions shouldn’t be considered at all, of course. It simply means that they should be appraised beyond the ability to create cost-savings. The cost-savings are only a springboard to other possibilities for further innovating your supply chain and potentially protecting if from future disruption.
According to a study by IBM undertaken in 2017, 879 leaders were surveyed and they universally implemented Saas for cost reductions however 50% of those companies who implemented saas solution were delivering increased strategic competitive advantage.
These organisations gaining a competitive advantage via SaaS adoption were found to be collaborating more effectively via accelerating their time to market, using social business tools, improving customer experience (CX), and being able to be more reactive to market changes. Isn’t this something we all want to occur in our supply chains? So how do we do it and what do we need to take into our consideration as we proceed?
- Empower small and medium enterprises with higher-end tools.
One well-known fact about any type of cloud computing technology is that it has allowed smaller enterprises to utilize tools that were once only available to larger corporations. It is no different with SaaS for SCM.
It is not surprising that if you are struggling to push for growth when you are still stuck using manual, tedious methods for organizing the vast amounts of information generated by your supply chain, opting for a SaaS solution can streamline your work at astonishing speeds, granting you visibility to make faster decisions even before you need to improve upon the software.
- Make lean production into a reality.
What makes the idea of lean, just-on-time production work is the ability to transmit relevant information about market demand across all areas of the supply chain network. The faster you can forecast a week’s inventory requirement, the faster everyone else can supply and manufacture it.
Coincidentally, these can be considered as additional (albeit indirect) cost-savings specifically for the supply chain process. The price of carrying inventory is often underestimated and SaaS solutions make the idea of selling just the right volume of products far more realistic.
- Comply with the demand of online consumers.
As the world rapidly integrates the internet for consumer shopping, suddenly those elsewhere in the supply chain are affected. You will need to provide downstream players including customers and consumers, with a platform from which they can order directly. It will become more important to adhere to global standards for quality products. And of course time is of the essence!
There are also minor details that many take for granted, such as universal item codes and real-time shipping information. In this day and age, time will not be on your side when setting this all up. That is why SaaS is often the solution sought out by smaller enterprises who need a fast way to connect with online customers and expand their network to the digital frontier.
- Organisation wide strategic approach when planning for a Saas implementation
A cautionary note: IBM’s study confirms that SaaS is delivering on a wide array of benefits, on top of lowering total cost of ownership, but that this isn’t necessarily the case in all Saas implementations. It shows that those organisations that plan the implementation strategically partnering with their IT teams, and working collaboratively together to deploy SaaS are able to execute on programs that drive business growth better than their peers who lag with SaaS deployments or whose Saas deployments have been piecemeal and potentially functionally driven.(to the extent that they occur without IT involvement.) (Ref: the office of finance, Saas – more than just a cost saving)
To summarize, if you are going to produce savings for your business, those savings are better off accelerating the growth potential of your innovated supply chain. At some point, those savings might even enable you to employ a hybrid solution of both SaaS and on-premise technology. The key is not just to do it because it’s the trend or its a quick fix but something that keeps your organisation moving and looking forward and if it’s something that is approached strategically and collaboratively as opposed to in a fragmented functional way, then you can expect in addition to cost savings, an improvement in your strategic competitive advantage! How wonderful!
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