This post is part of G2's 2023 digital trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Emily Malis Greathouse, director, market research, and additional coverage on trends identified by G2’s analysts. 

Digitization of supply chains will increase in 2023

Logistics SaaS will grow despite the tech recession

Supply chain instability and government spending during the COVID-19 pandemic led to inflation levels not seen in four decades. The Fed’s current strategy to combat hyperinflation is hiking interest rates, which is particularly detrimental to the tech industry because assets in tech production are often digital. A tech company can’t recoup cash in ways that manufacturers do by liquidating unused machinery or underperforming warehouses. As a result, Big Tech companies such as Facebook and Stripe have laid off over 60,000 employees throughout 2022.

However, SaaS logistics companies—especially those offering visibility and transportation solutions–are only growing. For example, Market Leaders on the Supply Chain Visibility Software Grid ® project 44 and Shippeo recently raised $80 million and $40 million, respectively. G2 data from November 30, 2022, also confirms this reality.

Not only is the Transportation Management Systems (TMS) category experiencing surges in traffic, monthly traffic to this category surpasses inventory management categories such as Inventory Control and Demand Planning. Transportation solutions’ dominance on G2’s website represents the overall paradigm shift in the supply chain that began during the onset of the Russian-Ukrainian War.  Although I predicted in my 2022 Trends piece that inventory management categories would rule the market, destroyed trade routes, fractured supplier networks, and geopolitical tension with Russia created a new crisis in transportation and visibility. Disruption is an opportunity for creativity and growth, and TMS and supply chain visibility vendors will ride this momentum throughout 2023.

Leaders will rise and fall based on their openness to automation

The supply chain is a risk-averse industry that is slow to adopt technology. While this resistance to change may not have sunk companies before the pandemic, it will now. PwC’s Digital Trends in Supply Chain Survey 2022 highlighted issues with business priorities and tech investments. 68% of respondents stated increasing efficiency was one of the top priorities, and 59% said the same about reducing costs. While this myopically points toward openness to innovation, only 21% and 19% of respondents said automation or analytics and digitally upskilling employees were priorities, respectively. In addition, G2 review data pulled on December 1, 2022, spanning the last two years, showed that less than 4% of the Analytics Platforms category reviewers came from supply chain professionals. Supply chain managers are, thus, working toward a goal without planning on implementing the solution, and companies that do this will be knocked down. 

It’s important, nonetheless, to note these data points are still a boon for SaaS logistics companies. The conversation around cloud-based technology lacked urgency prior to the pandemic, and few logistics companies listed adopting automation and analytics as a crucial business endeavor. Companies that invest in building a fully digitized supply chain will either hold or advance their position in the global economy.

Edited by Shanti S Nair