European companies will spend twice as much on supply chain management (SCM) services in 2006 than they did in 2001, according to a new report.
Market researcher IDC predicts the market in western Europe will grow from $9.5bn in 2001 to $19bn in 2006, representing a compound annual growth rate of 15 per cent.
Consulting, outsourcing services, systems integration projects, and training and support services are counted in the figures.
But IDC said projects will consist of a series of small consecutive projects rather than one large engagement, to give customers tighter control over milestones, deliverables, budgets and return on investment (ROI).
"As SCM projects will form the next generation of large-scale solution implementation projects, service providers must bear their customers' enterprise resource planning [ERP] implementation experiences in mind, and develop a sales strategy that counters previous bad experiences well," said Erik Bruin, senior analyst at IDC.
Most vendors are already going to market by vertical industry, and working on an ROI story.
"However," added Bruin, "we cannot stress enough that a sound, measurable, in-depth ROI message will be key in gaining new business. Developing tailored offerings to attack the mid-market is something that not all vendors are doing at the moment."
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