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Logistics software is top investment priority for the global supply chain, with ROI now expected within two years, survey says

70% of logistics service providers (LSPs) are planning to invest in new transport management, warehouse management and freight forwarding software according to a recent survey of logistics and supply chain professionals, with many looking to replace their existing software to take advantage of business opportunities. But expectations from software investments are high, with almost 80% of those surveyed expecting a return on any investment in supply chain IT systems within two years.

The independent study of 484 global businesses was conducted by Transport Intelligence (TI), a leading provider of research and analysis dedicated to the global logistics industry, and Kewill, a leading provider of innovative solutions for global trade and logistics. It examines the lasting impact the global economic downturn has had on logistics service providers, and the role of IT in ensuring their survival. Responses were drawn from 280 (58%) LSPs as well as logistics individuals from within, for example, manufacturers, distributors and retailers with responsibility for, or involvement with, supply chain operations.

Supply chain management software is used by 62% of LSPs surveyed, who cited freight forwarding, transport management and warehousing software as their most important operational management tools. Almost half of LSPs (46%) see the time required to implement new systems as an inhibitor to exploiting new business opportunities.

The main criteria for IT investment decisions was stated as being return on investment (ROI), with the payback period a significant secondary consideration, indicating that whilst LSPs are ready to invest in new software to support operational growth, they are setting increasingly stringent criteria to measure the success of IT projects.

Also moving up the agenda is supply chain visibility. Over 40% of LSPs responding to the survey had software links with their customers but less than 20% had links with other supply chain companies. 89% are looking to increase information sharing/collaboration in the future.

Andrew Dalziel, VP Product Management and Marketing at Kewill, said "The survey clearly demonstrates that LSPs are ready and willing to invest in IT to support their business strategies, but that now more than ever they expect software providers to deliver on their terms, and within their timescales. With length of time to implement a new system proving a key barrier, companies should look for tried and tested rapid deployment paths, such as the hosted and Quick Start implementation approach we offer for our Kewill Logistics suite. The Quick Start approach means, for example, that a TMS or WMS solution can be up and running in a matter of weeks, shortening the time in which both benefits and ROI are realised."

Joel Ray, Head of Consultancy at Transport Intelligence, said, "Improving visibility is a top priority for the logistics industry as a whole, with 49% of LSPs stating that action is being taken already and an overwhelming majority planning further supply collaboration going forward. Sharing of operational information throughout the supply chain is key not only to improving efficiency, but to ongoing innovation."

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