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All rights reserved.
Supply Chain Analytics: Findings
From the 2015 Gartner CSCO
Study
Noha Tohamy
VP Distinguished Analyst
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3 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Gauge the use of different analytics capabilities by maturity level
Understand the drivers for analytics adoption.
Identify the hurdles facing adoption.
Investigate a correlation between analytics usage and ROI.
Determine the supporting analytics talent and technologies.
Goals of The Survey Were To…
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4 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Geographic & Industry Breakdown
North America,
58%
Western Europe,
42%
North America Western Europe
18%
13%
9%
19%
12%
19%
12%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
ConsumerProduct Mfg
High TechMfg
HealthcareProviders
IndustrialMfg
(Discrete)
IndustrialMfg
(Process)
LifeSciences
Mfg
Retail
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5 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
The Use of Analytics Capabilities
Which of the following types of analytics is used to support supply chain?
79%72%
87%
38%
74%
93%
10%
84%
93%
7%
50%
100%
0%
20%
40%
60%
80%
100%
120%
Low Maturity Average Maturity High Maturity
Descriptive analytics Diagnostic analytics Predictive analytics Prescriptive analytics
Data
Human Input
Decision
PredictiveWhat will happen?
DiagnosticWhy did it happen?
DescriptiveWhat happened?
Prescriptive
What should I do?
Analytics
Action
Decision Automation
Decision Support
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6 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.6 © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Drivers For Analytics Adoption
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7 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
26%
17%16%
11%
9% 8%7% 7%
0%
5%
10%
15%
20%
25%
30%
Analytics willallow us toprovide ourcustomerswith better
service
Analyticshelps/will help
us withefficiency
goals
Analyticsallow us to
work with oursuppliers to
ensure supplyreliability andreduce risk
Analyticshelps/will helpus with speed
to market
Realizationthat analytics
will benecessary
with theadvent of bigdata and the
internet ofthings
Executivedecision toembraceanalytics
Analytics willhelp usmanagedemandvolatility
Inability togenerate
insights fromcurrent data
What are the top 3 factors driving your organization's need for Supply Chain analytics?
Recommendations:
• Align analytics
investments directly to
business priorities.
• Conduct analytics pilots to
demonstrate how
analytics support
business goals.
CSCO‘s Bimodal Role Drives Analytics Investments
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8 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
8.5%
8.0%
13.0%
11.0%
6.5%
8.0%
10.0%
16%
18%
24%
15%
16%
17%
20%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Demand forecasting
Factory planning and scheduling
Order promising
Quality management
Sales and operation planning
Transportation management
Warehouse management
Fully AutomatedThe process is fully automated, with no human intervention.
In 5 years Now
Automation In Decision Making Requires Advanced Analytics
Level of human intervention to support the process today and in 5 years
Recommendations:
• Define the level of automation
of decision making by
process
• Hire according to your vision
for automating decision
support
• Work on change
management and
organizational readiness for
future automation
Average now = 9.4% Average in 5 Years = 17.7
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Hurdles Facing Analytics Adoption
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10 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Expected Challenges In IT Integration Present Hurdles To Adoption
4%
5%
8%
11%
12%
16%
18%
28%
0% 5% 10% 15% 20% 25% 30%
Business case is not clear
No obstacles are hindering our adoption
Analytics technology is immature or does notmeet requirements
Lack of availability of internal analytics skills
Lack of executive buy-in for using moreadvanced analytics
The quality of the data is viewed as too poor tosupport analytics
Competition with other supply chain projects
Expected challenges with integrating analyticssolutions into back end or enterprise systems
What are the hurdles to adopting supply chain analytics?
Recommendations
• Ensure the availability of
data management & SC IT
resources
• Use successful analytics
pilots to prioritize analytics
projects against other
supply chain initiatives.
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11 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Operational Constraints Present Hurdles To Achieving ROI
What are the hurdles to achieving ROI from using analytics?
5%
6%
8%
8%
11%
12%
13%
28%
0% 5% 10% 15% 20% 25% 30%
Analytics tools do not meet functional requirements
User resistance to using analytics in their decisionmaking
Organizational resistance to rely on analytics to fullyautomate supply chain processes
Poor data quality
Learning curve for how to adopt analytics is still steep
Organizational silos that restrict analytics adoptionacross the supply chain
Lack of analytical talent that can build models thataccurately represent and solve supply chain problems
Current operational realities constrain use of analytics Recommendations
• Secure the organization's
willingness and ability to make
analytics-supported operational
changes
• Account for the necessary change
management in building the
business case
• Work with trading partners to
understand and minimize their own
operational constraints
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12 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.12 © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Correlating Analytics Maturity & ROI
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13 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
4%
2%
4%
5%6%
4%
30.0% 30.0%
27.5%
33.5%
29.5%
26.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Improvedasset
utilization
Improvedproduction or
supplyreliability
Shorter ordercycle time
Higherrevenues
Successfulproduct
launches
Improvedcustomer
service level
No ROI High ROI
To what degree have you achieved the following ROI through the
use of analytics?
On average, 29.3% of
organizations indicate that they
have achieved high levels of ROI
On average, 4% of organizations
indicate that they have achieved
no ROIs
The Use of Analytics Aligns With ROIs
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14 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Mature Organizations Achieve Higher ROI
Have any of the following High ROIs been achieved through the use of Supply Chain analytics?
21%
24% 24% 24% 24%
21%
32%
30%
28%
33%
28%26%
30%
37%
30%
43% 43%
30%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Improved assetutilization
Improvedproduction/supply
reliability
Shorter order cycletime
Higher revenues Successful productlaunches
Improved customerservice level
Low Maturity Average Maturity High Maturity
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Supporting Talent & Technology
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16 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Relying On Internal Talent Requires An Attractive Career Path
How does your organization plan to obtain the necessary Supply Chain analytics
talent to support its needs moving forward?
66%
50%47%
0%
10%
20%
30%
40%
50%
60%
70%
By developing internalresources
By hiring externally By engaging consultantsand/or service providers for
analytics resources
Recommendations
• Work with HR to create well
defined role description and
competency model
• Create a rotational program to
ensure analytics resources
align with business priorities
• Look for candidates from
functions outside of the supply
chain
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17 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
More Organizations Rely On In-house Solutions
What is the primary technology that your organization relies on for Supply Chain analytics capabilities?
24%
33%
20%
22%
0%
5%
10%
15%
20%
25%
30%
35%
Analytics capabilities insupply chain
management tools
In house developedsupply chain analytics
tools
Analytics tools that arenot supply chain
specific that is usedacross the organization
Analytics toolsdeveloped by
consulting and serviceproviders
Recommendations
• Leverage existing analytics
capabilities in SCM tools and
enterprise solutions
• Ensure that the in house
developed solutions are
scalable and widely accessible
to all business users.
• Manage functional silo’ed
development initiatives
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18 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.18 © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Takeaways & Recommendations
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19 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
CSCOs bimodal role, increasing supply chain complexity and need for further automation drive increase in analytics adoption.
There is a significant positive correlation between analytics usage and level of analytics maturity& generated ROI.
Organizations must account for IT integration challenges and operational constraints to build a realistic business case for analytics.
Reliance on in-house talent and technologies requires defining analytical roles and career paths and managing in-house development initiatives.
Key Takeaways
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20 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.
Hype Cycle for Chief Supply Chain Officers, 2015Noha Tohamy (G00277666)
Deconstructing Supply Chain AnalyticsNoha Tohamy (G00276256)
Advanced Supply Chain Analytics: What It Is and Why It's Important to UnderstandNoha Tohamy (G00259516)
The Supply Chain Strategist's Guide to Analytics MaturityNoha Tohamy (G00270929)
Recommended Gartner Research
For more information, stop by Gartner Research Zone.
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21
Gartner Supply Chain Executive Conference 2015
23 – 24 September, London, UK
Experience live analyst expertise plus much more at a Gartner event.
Visit gartner.com/events
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