We’re all familiar with this in our daily lives as individuals: subscriptions to various digital services have piled up in our budgets—not so long ago, our parents paid for subscriptions mainly for water, gas, electricity, and the phone—we pay for a plethora of additional subscriptions—internet access, digital services, television, music, and so on.
If you take a close look at your personal budget, you’ll likely find dozens of such subscriptions—including perhaps a few you’ve forgotten about.
Why SaaS subscriptions are skyrocketing across corporations?
The same phenomenon has occurred over the years for businesses. With the shift to the cloud, subscriptions have become widespread. This wasn’t the norm 15 or 20 years ago—companies purchased a limited number of software licenses, followed by a maintenance subscription. Over the past two decades, the practice of subscriptions has become commonplace, and the number of solutions a company uses has also skyrocketed—due to digitalization.
It is estimated that an SME in Europe or the US typically uses 150 to 250 applications (not including Excel 😉)—for a cumulative annual budget of several hundred thousand euros/dollars.
It is estimated that the bill rises for mid-sized companies and large corporations—with commonly over 450 solutions identified and millions of euros/dollars annually. This raises not only budgetary concerns but also issues of governance and security.
The AI wave adds another layer to these subscriptions, and what’s more, with a variable, usage-based component in the form of tokens.
While we should welcome the wave of digitalization and hope for an end to the dominance of massive ERP solution budgets in IT spending in favor of more high-performing, “best-of-breed” solutions—we must also understand that this trend toward proliferation is likely unsustainable and calls for a rationalization effort on the part of procurement and IT teams.
Costs, governance, security: understanding the risks of digital tool sprawl
In the industrial supply chain sector, it is common today for a factory to manage its planning to use a dedicated sales forecasting solution, a dedicated solution or BI for S&OP, a shop floor scheduling solution, an MES, a solution for inventory management and traceability, a CRM, an SRM, a TMS, a WMS, and, incidentally, an ERP. It’s not uncommon for each factory within the same corporation to have its own digital ecosystem that relies on distinct solutions.
According to my favorite AI assistants, there are over 1,000 SaaS solutions dedicated to the supply chain on the market… That’s a lot, but it’s starting to get a bit chaotic, isn’t it?
In this context, we’re seeing a trend toward the consolidation of SaaS solutions—through mergers and acquisitions—as well as the functional expansion of dedicated best of breed solutions to address a wider range of operational needs.
How can you rationalize your digital stack in Supply Chain?
This is the approach Intuiflow by Algo has adopted: offering the benefits of best-of-breed dedicated solutions in each of its functional domains, with a modular approach, while covering multiple domains to enable supply chain, procurement, and IT departments to streamline the costs and governance of digital solutions—without incurring the cost levels of the industry giants promoted by Gartner in its Magic Quadrant.
Today, Intuiflow competes on a par with the best in the field of inventory optimization, S&OP, scheduling, shop floor control, sales forecasting, procurement, and demand planning—with a distinctive approach centered on ease of use and a focus on results, rooted in our "Demand Driven" DNA, combined with the best algorithmic and AI technologies.
So, if your company is looking to combine effective digital transformation with cost optimization, let’s talk!
