The Roundup: Supply Chain Spending To Soar

Jun 26, 2001

David Aponovich

Supply Chain Services Surge
Like just about every other technology that helps businesses streamline their operations, supply chain services are about to explode, according to IDC.

The tech research firm has issued a report indicating that companies spent $23 billion in 2000 on supply chain services, and are expected to spend $83 billion worldwide 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," Ting Piper, program manager for IDC's Supply Chain and eLogistics Services research in Framingham, Mass., says. "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."

IDC reports that North America and Western Europe are the areas that will see the most supply chain spending. Those areas currently account for 95% of the market and will still hold 88% of the market in 2005, according to IDC.

Another point: In North American and Western Europe, businesses typically outsource their supply chain implementations to third-party vendors, whereas in other regions of the world, businesses usually rely on their own IT departments.

Poised for the sharpest compound annual growth rate through 2005 is the Asia/Pacific region, which will grow at 53% CAGR, according to IDC. The overall market will grow at a 29% CAGR.

Security Driving Biometrics
Concerns over security (network security and otherwise) are driving the growth of biometrics in mass-market applications, according to a report from Cahners In-Stat Group of Scottsdale, Ariz.

Once limited to the realm of science fiction, new identification technologies, such as eye-scans and face scans, are being developed for access control systems (for ATMs and other "access" points where a person's identity needs to be verified.) Sales of biometrics equipment and services will steadily increase to $520 million over the next five years, according to the tech research firm.

"For many, biometrics remains a novelty; something for use only in the most extreme cases of access control. Given the early cost of these systems, there's no wonder," says Marlene Bourne, senior analyst for In-Stat's Emerging Semiconductor Applications Service located in Scottsdale. But that's changing. "With the explosion of electronic documentation and e-commerce, security concerns have become paramount," Bourne says, leading to the common deployment of biometrics.

Among In-Stat's findings, facial scans will become the preferred technology, as consumers consider them as less intrusive than eye scans.

Top 5 Canadian IT Issues
Stamford, Conn.-based Gartner Inc. recently polled more than 2,000 Canadian IT professionals to come up with a list of the top five issues on their minds.

Their top concern? Gartner reports that it's the all-too-vague "future of IT." (But then, Gartner uses the survey results to trumpet its upcoming Canadian IT expo.)

Rounding out the top five concerns are: "issues tied to e-business infrastructure and architecture"; security and privacy issues; mobile and wireless technology; and customer relationship management.

Business issues that are of lesser importance to Canadian IT execs are online trading exchanges and enterprise resource planning.

Online Spending Takes a Dive
Online spending in the U.S. dropped noticeably from $4.3 billion in April to $3.9 billion in May, due primarily to a seasonal drop in online travel bookings, according to Forrester Research of Cambridge, Mass.

The tech analyst firm issued its 17th monthly Forrester Online Retail Index last week in conjunction with Greenfield Online, a market research firm in Westport, Conn.

According to the report, the number of households shopping online dropped to 148 million in May from 15.7 million in April. Consumers spent an average of $265 per person in May, compared to $273 in April.


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