Just about any collaboration application that spans multiple companies is more than likely a good candidate for the cloud. So it's not surprising that supply chain management software is moving into the cloud. Case in point is CVM Solutions, which this week announced that it is making its Supplier Central 10 software available as a service on Salesforce.com's Force.com platform.
Despite its potential to lower costs, the more interesting thing might be the analytics potential associated with deploying supply chain management software in the cloud. As more information pours into a common database engine shared by multiple companies, it will become easier to use analytics software to correlate information to find problems in the supply chain.
CVM Solutions has a rudimentary analytics offering in Supplier Central 10 called Supplier Intelligence as a Service that gathers information about suppliers from both within the customer's organization and public sources. As this capability evolves, companies will be able to use this information to check on the overall sustainability of their organization based on issues confronting their suppliers.
The viability of suppliers has become a major issue in this economy. In fact, a survey commissioned by CVM Solutions finds Fortune 1000 companies used about 4.9 million suppliers in 2009 and that number is down considerably for the first half of 2010. According to Jon Bovit, chief marketing officer for CVM Solutions, calls the situation "supplier Darwinism," in which increased consolidation results in strong suppliers supplanting many weaker companies.
Bovit makes no bones about the fact that Supplier Central 10 is designed to help managers identify those weaker suppliers faster. In fact, he expects customers to use not only the intelligence services provided by CVM Solutions, but also the Chatter social-networking capabilities in the Force.com platform to share information on suppliers.
At a time when a few missed shipments or the inability to gain access to a critical component can mean laying off thousands of employees, it's never been more important to determine which of your suppliers are really the fittest.