Tech investments bring revenue increases, survey finds

Investments in supply chain technology can have immediate dividends, driving up revenue and streamlining operations according to new research from Cleo.

The cloud-based integration platform surveyed 301 professionals from five continents to gauge the role supply chain reliability played in achieving their business goals, including whether investments were effective. The report, Cleo’s 2024 Ecosystem Integration Global Market Report, is available online at no cost.  

One of the key takeaways from the report is that most companies surveyed, 97%, had invested in supply chain technologies in 2023 and 35% stated that investment led to increased benefits. A full 81% said that supply chain technology investments delivered business improvements within 24 months generally, and 80% indicated they saw increased revenue in the same year the investment was made.

The report was prepared by Dimensional Research for Cleo.

“A company’s supply chain is simply a series of commitments that tether across an ecosystem and must be delivered upon,” Tushar Patel, CMO at Cleo, said in a release. “And for companies to uphold those critical business commitments, they need to consistently invest in their supply chain technology, otherwise they stand to take a hit to their relationships—impacting their bottom line.”

Seeking better control

Not surprisingly, 52% of respondents said that external disruptions such as inflation, geopolitical tensions, labor shortages and internal issues such as supplier and manufacturing problems and trading partners failing to uphold business commitments contributed to a failure to meet business objectives.

“A company’s supply chain is simply a series of commitments that tether across an ecosystem and must be delivered upon. And for companies to uphold those critical business commitments, they need to consistently invest in their supply chain technology, otherwise they stand to take a hit to their relationships—impacting their bottom line.”

Technology, though, is seen as key to building up supply chain resiliency.

“Just like consumer expectations evolve, so do companies’ business objectives and ecosystem commitments. But often these evolutions emerge due to various supply chain disruptions,” Patel said. “By leveraging technology to build greater resilience to supply chain disruptions, a company is better able to take control of its supply chain commitments and deliver on their promises—resulting in stronger relationships and trust with their ecosystem.”

Among the business objectives companies are targeting with technology are improving the customer experience (50%), improving relations with trading partners (35%) and building resilience to navigate supply chain disruptions (30%).

Among the areas where companies see technology assisting is in improved communications (38%), improved data sharing (33%) and better support for onboarding and visibility (24%).

Top performers invest

According to research from Gartner, top-performing supply chains are investing in artificial intelligence and machine learning at twice the rate of their lower-performing peers. Those same firms are also able to leverage their size to utilize productivity as a focal point for sustaining business momentum over the next three years. Conversely, lower-performing companies are more likely to utilize efficiency or cost savings.

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“Top-performing supply chain organizations make investment decisions with a different lens than their lower-performing peers,” said Ken Chadwick, VP analyst in Gartner’s Supply Chain Practice. “Enhancing productivity is the key factor that will drive future success and the key to unlocking that productivity lies in leveraging intangible assets. We see this divide especially in the digital domain where the best organizations are far ahead in optimizing their supply chain data with AI/ML applications to unlock value.”

Gartner surveyed 818 supply chain practitioners across geography and industry from August through October 2023. Organizations were scored across five key metrics measuring business and people outcomes to determine their performance level. High performers were defined as those organizations that exceeded expectations over the past 12 months across the five measurements.

When it comes to the processes using AI/ML, 40% of high performers are using AI/ML in demand forecasting, versus just 19% of low performers. The same holds true across the remaining four metrics. The performance:

• Order management and fulfillment: 33% vs. 8%
• Supply planning: 31% vs. 12%
• Logistics and distribution: 27% vs. 8%
• Sales and operations planning/integrated business planning: 24% vs. 10%

“Capturing, protecting and then leveraging an organization’s data through the use of AI/ML is an example of how organizations are increasingly turning towards intangible assets to extract new sources of value,” Chadwick said. “High-performing organizations are moving beyond the initial implementation stage to full adoption, resulting in better decision making that unlocks new sources of value.”

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