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2019/11/27 09:56:54

ERP systems (world market)

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Content

Determinations

Different research companies designate by different terms the markets of the systems of one class:

The term Gartner and Forrester Research - ERP (Enterprise Resource Planning, applications for enterprise resource planning).

The term IDC - ERM (Enterprise Resource Management, applications for resource management of the enterprise).

Recommendations about implementation of ERP

Market of Russia

Main article: Enterprise management systems (market of Russia)

2018: Growth of the market by 10% to $35 billion is Gartner

In 2018 the amount of the world market of planning software of resources of the enterprise (ERP) reached $35 billion, having increased by 10% of rather previous year. Data of analysts of Gartner demonstrate to it.

Specialists explained growth in sales of ERP systems with the continuing digital transformation of business in the companies, development by solution SaaS and demand for new versions of products.

Market leaders of ERP in 2018, data of Gartner
Market leaders of ERP in 2018, data of Gartner

In a research it is noted that the market of ERP products is mature (some vendors work at it about 40 years), however on it still there is a high potential for growth.

The largest producer of such software still is SAP which in 2018 earned about $7.7 billion from such solutions. With big lag from the German company Oracle which wrote in an asset of $3.9 billion income was located.

The leading three was closed by Workday with ERP revenue in the amount of $2.33 billion at the end of 2018. On the fifth position Infor which sales in the considered market it was equal $1.72 billion was located.

In top-5 there was only one change in 2018 concerning the 2017th: Workday rose from the fourth position by the third. For the first time the cloud company was included into top three in the market of ERP, experts note.

SAP unconditionally is in the lead not only on all the market of ERP, but also in its largest segment — financial accounting systems. In 2018 revenue of SAP from sales of such solutions reached $2.98 billion. From software for human capital management (HCM) the German company earned $2.7 billion, from management systems for production process — $1.79 billion.

Oracle lags behind SAP in all segments. Moreover, the American corporation concedes also to Workday on the sales amount of management systems for a human capital: revenues of the companies here at the end of 2018 it was equal $1.9 billion and $2.02 billion respectively.

Advances Oracle with revenue in the amount of $1.53 billion against $1.43 billion at the competitor in category of financial accounting systems Sage. And in software segment for industrial process control of Oracle falls short of Infor indicators, data of Gartner for 2018 demonstrate.

Among producers of the systems of management of fixed assets there are no equal SAP and Infor which from sales of such solutions gained in 2018 about $244 million and $164 million respectively.

According to analysts, the market remains fragmented: only 51% of sales of software are the share of five largest producers.

«
It means that the biggest not always means that it is the best of all in terms of functionality of products, the industry, geography, etc. Also there is huge demand for alternatives to big names. We communicate every year with hundreds of small suppliers who often are guided by certain markets with loyal clients, but who have a small zone of influence outside the area — the analyst of Gartner Deborah Wilson holding a position of the managing vice president for a research of the market of ERP in analytical company reported.
»

She noted that the market of ERP systems becomes broader as new vendors aim to develop the developing areas, like financial planning and the involvement of employees into workflow. In these areas small suppliers are often more flexible in comparison with large competitors.

Cloud services in 2018 remained a noticeable segment in the market of ERP, however local solutions do not disappear anywhere — especially it concerns the operational solutions and cases of use connected with confidential data or the high level of legislative regulation.

The amount of the world market of planning software of resources of the enterprise (ERP) reached $35 billion, having increased by 10% of rather previous year
The amount of the world market of planning software of resources of the enterprise (ERP) reached $35 billion, having increased by 10% of rather previous year

The popularity of cloud cloud ERP products is in many respects caused by convenience of their implementation as first, such systems can be tested in combat conditions, without spreading the large amounts for implementation.

If to go on the way of local infrastructure, then it is necessary to configure everything independently: buy licenses for server operating system, for the SQL server, for ERP server. Plus can happen so that it is necessary to update the equipment. All these expenditure are not justified if you need to estimate ERP system work only.

Another matter — the virtual server. The cost of the operating system often is included its leases in the price. It is also possible to rent the SQL server (as well as many other licenses), and then when it does not become necessary, to refuse. With purchased licenses so not to make therefore they often lay down a dead load when need for them disappears.

The flexibility of virtual servers allows the companies to estimate an ERP system without equipment costs and to select that which will be suitable for enterprise management on a permanent basis better.

The market of schedule systems of resources of the enterprise remains growing, despite uncertainty in a political and economic situation which took place in 2018.

IDC confirm growth of the world market of ERP at the end of 2018, but do not disclose dynamics in the free selections to researches. Analysts only point to "the steady growth" and the accelerated changes in the market thanks to the so-called third platform (in IDC carry cloud, analytical and mobile computing, social networks and the solutions Big Data to it) and engines of innovations in the field of the cognitive systems, such as machine learning and Internet of Things.

This acceleration is promoted by rationalization, upgrade and transformation as the companies pass to the innovation cloud ERP solutions, it is specified in the report.[1]

2017: Market leaders according to Gartner

Market leaders of ERP in 2017, data of Gartner
Market leaders of ERP in 2017, data of Gartner

2016: 10 most popular ERP systems

In December, 2016 the consulting company Panorama Consulting Solutions dealing with problems of implementation of ERP systems published the rating of the largest producers of such software.

Analysts estimated vendors on market shares, the cost and duration of product introduction, terms of return of investments  and functionality of software. Data were taken from the annual ratings of Panorama from September, 2012 till February of the 2016th. About 1660 respondents participated in poll. Data on functionality of software were received based on assessment of demonstration versions of products clients of Panorama.

The rating of the largest producers of ERP systems is
The rating of the largest producers of ERP systems is

According to data of Panorama, by 2016 in the world market of ERP systems SAP (more than 20%) has the greatest share. Top three includes Oracle (13.9%) and Microsoft (9.4%). Further the following companies were located:

First place on payback periods of investments into ERP was won by SAP. On the speed of implementation products of Oracle are in the lead, and on costs for implementation the palm was taken by the NetSuite systems which cost customers on average 2.8% of revenue.

In the research Panorama such advantages of the Infor systems as ample opportunities of use of mobile versions by remote offices and employees, well-tried and intuitive remedies of the analysis of business data and optimal indicators of time and implementation cost and also an investment payback are also noted.

According to the managing partner of Panorama Eric Kimberling,  some companies from lists of the largest of Fortune 1000 which cooperated before with SAP and Oracle use the solution Infor CloudSuite.[2]

2015

Forecast of Global Industry Analysts: $67 billion

According to forecasts of the American company Global Industry Analysts, in 2015 the world market of ERP systems will reach volume in $67.8 billion. Positive dynamics to the market will be provided by increase in the competition in all industries of world economy.

In a research it is said that in the world market of ERP systems North America and Europe dominate. The Pacific Rim and Latin America where rapid growth is observed remain significant segments of the market. It is expected that the countries entering these regions will also take the leading positions in the world ERP market in the near future.

Among the largest players of the world Global Industry Analysts ERP market are called:

Forecast of Forrester Research: $50.3 billion

According to forecasts of the company, the world market of ERP systems in 2015 should reach $50.3 billion.

2014

The forecast of AMR Research till 2020

According to the forecast of Allied Market Research (AMR) the world market of ERP systems by 2020 will reach $41.69 billion, at the same time the annual average growth rate during 2014-2020 will be about 7.2%.

As analysts note, emergence of cloud computing in the market will lead to paradigm shift in deployment methods. Cloud ERP systems require considerably smaller investments into IT resources and offer big flexibility. Thus, clients will pass from on-premise of solutions to cloud ERP systems. Besides, access function to ERP from mobile devices will gain further development.

According to AMR, by 2020 the bigger market share everything will also be had by on-premise ERP-системы – about 57%, at the same time cloud ERP will show higher growth – on average for 10% during 2014-2020.

As for consumers of ERP systems, increase in a share of the space and defense industries is expected here, growth of this category is predicted on average for 8.86% during 2014-2020. The Pacific Rim will be one of the most fast-growing markets of ERP. According to analysts, by 2020 it will reach $9.77 billion.

Image:amr kommersant.jpg
[3]

2012

Gartner quadrant, world market of ERP systems

Image:Квадрант Gartner, мировой рынок ERP-систем.jpg

2011

IDC: The market of ERM for the first half of the year 2011

On December 22, 2011 IDC published the last results of a world research of the market of products of resource management of the enterprise (ERM - Enterprise Resource Management) for half a year - Worldwide Semiannual Enterprise Resource Management (ERM) Applications Tracker.

According to Vilvin Chi (Wilvin Chee), the assistant to the vice president of IDC, it is expected that during 2011 the companies will spend for ERM in total $37.9 billion. "In terms of the functional markets, as expected, three of eight will work best of all. It is the market of products of management of finance and strategy, order managements and also managements of a portfolio of projects", - Chi noted.

Growth above an average on the market is expected in all countries, excepting the USA and Japan. In regions of Latin America, Central and Eastern Europe the speed of market development will be highest as investments into ERM in Brazil, the Czech Republic, Israel, Romania, Russia and South Africa will grow. In the Pacific Rim traditionally strong rise with Australia, China, India and Indonesia at the head continues. In 2012 deceleration of investments is expected that will cause growth in 6.3%. Similar happened in 2010.

Scott Guinn, the director of research of corporate applications, noted what smooth recovery of world economy caused the big need for the software and the services promoting cost reduction, helping to manage risks, to increase production efficiency and also to reveal new opportunities for further growth. "The technology trends supporting an economic recovery and the market include development and creation of such architecture as cloud computing, mobility, new social models and instruments of attraction and development of services for clients, employees, suppliers, partners. These technologies, the rebuilt business models and processes which they initiate will be play the vital role in stimulation of expenses on solutions of resource management of the enterprise", - he emphasized.

Only three vendors of ERM could reach revenue more than $1 billion in the first half of 2011 is SAP, Oracle and Microsoft. Thereby they strengthened the positions in TOP-3. Despite impressive digits of income, SAP and Microsoft after all it was succeeded to reach growth indicators above an average on the market in the first half of the year 2011. Outside the first three the competition in the market remains very intense. On five of eight functional markets, according to a research, more than 100 vendors are provided. The keenest competition is revealed in the sector of products of financial accounting, human capital management and purchase management.

In the first six months 2011 growth of number of suppliers of ERM with revenue more than $100 million was observed. A year ago them was 16, this year the digit increased up to 22. Among beginners: Deltek, SuccessFactors, Taleo, UFIDA, Ultimate Software and Visma. Among them UFIDA achieved the most impressive indicators as it repeatedly increased efficiency of sales in the first half of year in comparison with the same period of previous years. Some other large suppliers with impressive revenue growth in comparison with previous years: ADP, DATEV, Fujitsu, Intuit, McKesson, Sage and Unit4.

The research IDC covered 370 vendors of ERM in 49 countries of the world, in it market size in two years, shares of participants and also forecast data on eight functional markets making the software market of ERM is considered according to a systematics of the company.

Forecast of market development of ERP systems of Forrester Research

The world market of ERP systems in 2011 will make $45.5 billion, in comparison with $43 billion in 2010. Forrester predicts that vendors of Infor, Oracle, Sage and SAP will continue to increase the power of solutions by means of acquisitions. Income from licenses will begin to fall by 2015, and income from maintenance, on the contrary, will go up.

Profitability of a subscription to products will rise as income from cloud ERP grows by 21% a year till 2015. SAP and Oracle will remain the main players of ERP of the market. Suppliers of specialized ERP will continue to compete with them. As a result, the market to continue to be fragmented.

According to data of Forrester Research, the number of the companies planning investments into the ERP-of a system will decrease in 2011, despite of the general expected growth of IT expenses. 25% from about 900 companies polled by Forrester are going to carry out updating, expansion or implementation of ERP systems, in comparison with 29% in 2010. But 72 % from them are "in standby mode", without having specific plans of investments into ERP software.

Development evaluations of the market of ERP from Gartner

By estimates[4], 2011 became positive for most vendors in the world market of ERP systems while revenue from sales of licenses reached the pre-crisis level of 2008. In comparison with 2010 it increased by 10% to $23.3 billion. From them about $2.7 billion were the share of deliveries of ERP systems to the produkto-focused companies.

Together with growth of welfare of vendors in global market of ERP the activity renewed M&A though several previous years it was concentrated mainly in the sector of HCM (human capital management). Lawson Software purchase by Infor company (it is closed in April, 2012) and also purchase of Epicor of Activant Software company are among the largest transactions.

In the Gartner market carries to number of the main trends: strengthening of the SOA model, in particular regarding offers for mid-size companies, optimization of user interfaces, mobile access to ERP systems, the rastuzy Internet to SaaS and cloud ERP solutions.

As for the leading vendors in the market, according to a magic square of Gartner for the ERP systems intended for the produkto-focused mid-size companies solutions belong SAP Business One and Microsoft Dynamics AX.

In terminology of Gartner treat the produkto-focused companies as production companies of the most different industries which ultimate goal is the release of any products, and the distribution companies which are engaged in purchase, and then rearrangement and sales and also the product delivery. As for business scale, it differs from 10 employees in the state before entry into the Global 2000 and 10 list of one thousand employees, at the same time revenue of the companies makes from $50 million to $1 billion.

Usually such companies have limited IT resources and select ERP systems first of all at the total cost of ownership (TCO). However questions of completeness of functionality also play a significant role. Besides, to be necessary to take into account that only systems which are provided globally enter a magic square. But in some regional markets, for example, in Brazil, there are very strong local ERP players (an example – Totvs, revenue in 2010 of $600 million, a market share – about 50%).

Magic square of ERP systems
for the produkto-focused mid-size companies

Image:MQ ERP Gartner 2012.jpg


Gartner, June, 2012

Except SAP and Microsoft which value was mentioned above, according to a magic square of Gartner, in the market also solutions Oracle JD Edwards EnterpriseOne, Oracle E-Business Suite and IFS Applications which are placed in a square of chellendzher are selected. Are carried to niche solutions QAD Enterprise Application Lawson M3 ERP Enterprise Sage ERP X3 Infor 10 ERP Enterprise. The solution Epicor ERP is carried in kadrat visionaries.

Panorama about the largest suppliers of ERP

Panorama Consulting Group published another research of leading ERP- vendors under the intriguing name Clash of the Titans. In a similar research of 2010 detailed comparison of the companies was made SAP and Oracle, and in 2011 included in it as well solutions of a line Microsoft Dynamics.

During the research 1.8 thousand implementations in different strange the world, performed for the last 6 years were analyzed. Some outputs were identical to outputs of last years.

So, the report says, SAP is still in the lead in the world market of ERP systems from shares in 24%, on the second place – Oracle corporation, on the third - Microsoft Dynamics. As SAP is a market leader, solutions of the company most often get to short lists when choosing ERP system (in 38% of cases).

However, if solutions of Oracle get to a short list of tenders, then the probability that the company after all will make a choice for benefit of Oracle is highest against the background of the competing solutions (22%).

In general ERP system implementation in most cases is much more long-term and expensive, than the companies assume initially. At the same time expectations of business from implementations sharply disperse from objective reality.

As for unexpected outputs of a research, for example, this year it is established that the level of customer satisfaction of Oracle is highest – 80%. And indicators of the closest competitors are much lower: SAP has 39%, and at Microsoft Dynamics – only 33%.

At the same time implementation of Microsoft Dynamics on average takes most of all time (14 months) in comparison with SAP (13 months) and Oracle (11 months). Microsoft Dynamics also has the biggest discrepancies based on the ratio of the expected term of implementation and its actual duration.

However not everything is so bad, and Microsoft Dynamics provides the smallest payback period and return of investments: 84% of the organizations using the systems of a line keep within the period up to three years.

Besides, the solutions Microsoft Dynamics have the smallest cost of ownership (about $500 thousand) in comparison with Oracle and SAP whose solutions are recognized the most expensive in terms of further operation.

Projects on SAP have the lowest indicator of an overexpenditure (8% of the budget), on the second place - Microsoft (14%), on the third - Oracle (15%). It means that though clients of SAP also spend one implementation more, they accurately understand what wait from the project for, and are capable to plan it competently.

Perhaps, the most interesting output is existence of correlation between duration of implementation and level of customer satisfaction. So, the more time leaves on the project, the customers are happy less. Implementation of Microsoft Dynamics on average lasts 14 months, and clients of this line have the worst indicator of satisfaction – 33%. Oracle has, on the contrary, the shortest average period of implementation (11 months), and customer satisfaction level the biggest.

Besides, the fact that implementation of Microsoft Dynamics brings the fastest ROI does not influence satisfaction of the companies using solutions of a line in any way. Thus, business benefits are not the defining factor of achievement of satisfaction from ERP system implementation.

2010

IDC

In the first half of 2010 the world market of applications for resource management of the enterprise or ERM (Enterprise Resource Management) reached $16.5 billion that is 8.1% more in comparison with the same period of 2009, according to IDC.

Among the largest world markets of ERM systems as the most quickly growing the market of Brazil which in annual terms showed growth by 39.3% while Australia showed so impressive 38.4% of growth in permanent currency is called.

Within all market of ERM the most intensively developing segment is the segment of the Enterprise Asset Management (EAM) systems which grew by 12.2% in comparison with the first half of the year 2009.

SAP became the leading vendor in the first half of the year 2010, having earned from ERM during this period about $2.45 billion SAP became key vendor in 9 of 13 countries included in a research. Oracle in the general category ERM which traditionally have strong practice in the field of Financial Performance and Sategy Management Applications became vendor number two.

Gartner

In the report of Gartner on the market of ERP systems for the medium-sized produkto-focused companies market research of world management systems and planning by resources of the enterprises (ERP) for production companies in which from 100 to 999 employees, work with annual sales volume from $50 million up to $1 billion is carried out.

In 2010 "the magic square" as leaders of this market included systems Microsoft Dynamics AX and SAP Business All-in-One. Chellendzherami are named Oracle JD Edwards EnterpriseOne Oracle E-Business Suite, Infor CloudSuite Industrial (ранее ERP SyteLine) and QAD Enterprise Application. The visionary recognizes a system Epicor 9. Niche solutions are called IFS Applications Microsoft Dynamics NAV Syspro Sage ERP X3 Exact Globe Infor ERP LN Infor M3 (Lawson) Enterprise Management System.

Key market changes from the moment of the publication of the previous "magic square":

  • Clients begin to adapt the processed user interfaces which are involved more role and personalized concept and also offer means for joint work. They are distinguished by increase in convenience of work, enhanced capabilities for search and more integrated analytic functions which attract those users who use the ERP system seldom.
  • Interest in ERP on the basis of the SaaS model grows, but adaptation to this model of key products in the market at the moment is not noted. Most of clients who participated in a research ERP on the on-premises model continue to receive, but complement it with other software products according to the SaaS model – for example, CRM systems or means of joint work.
  • Many clients note that the shortage of the qualified consultants creates for them problems in implementation of ERP projects. Due to these many vendors began to implement programs for improvement of the partner channel, offering deeper skills and certification.
  • Despite the general decrease in ERP of the market by 6%, to key vendors there was nothing that would shake their market positions. Any of key players did not leave the market and was not purchased by competitors. Cash flows from the existing clients created a peculiar safety cushion for vendors.

Aberdeen Group

According to the new report of Aberdeen Group Inc analytical company in which it is told about market situation of implementation of ERP systems in a segment of medium and small business (small and medium business, SMB), the companies with annual revenues in $500 million and for 50% are less more active concerning such projects in comparison with the companies of large business. Often the companies of medium and small business have more effective tools allowing to monitor business processes of the company in real time.

SMB companies realize that stable and effective information infrastructure is necessary for steady growth and competitiveness of business in the future. Therefore such companies consider that seeds for such "growth" should be planted already now, the expert report says.

According to Cindi Yutras (Cindy Jutras), the vice president research the Aberdeen groups, together with the growing optimism got hope for the growing profits from recovery of world economy of the company of the sector of SMB again. "As a result, they should find competitive advantages which will help them to control costs and to provide revenue growth not only at the expense of the growing profit", - she noted.

In such situation of a system of the class Enterprise Resource Planning (ERP) can become strategic weapon. They not only create the necessary infrastructure creating main systems of accounting on which business is based but also are a source to economy of means and ordering and acceleration of business processes. All this allows the companies of medium and small business to compete with larger enterprises.

According to the estimates of analysts, effective ERP implementation allows to lower operating costs by 22%, administrative – for 20%, and resource – for 17%. Also on average deliveries and their time improve for 19%, and observance of internal terms – for 17%. Such optimization can provide from tens of thousands to millions of dollars of the saved means, researchers note.

2009

Gartner

In 2009 the market of ERP systems in general decreased in volume by 6% to $20.1 billion, from them for medium business 27%, i.e. about $5.3 billion were the share of a segment of systems. At the same time decrease in volume of a segment of systems for medium business was insignificant – only 1%. It means that despite crisis, this type of the companies was most active in purchase of ERP systems. For the end of 2010, according to forecasts of Gartner, the market will remain "flat", i.e. despite macroeconomic improvements, its growth will be absolutely insignificant. At the same time, this market will remain highly competitive.

2008

AMR Research

AMR Research considers that the whole 2008 for the ERP market can be separated into two parts, and the first half of year showed stable growth. However after September bankruptcy of Lehman Brothers company and the subsequent events many companies lost belief in the stable future and sharply suspended investments and froze the current projects. Especially brightly this trend was shown in a segment of SMB which was considered as the most active consumer of ERP solutions recently.

Market shares of ERP in 2008 depending on the value of an annual income of clients

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In 2008 in the ERP market globalization and centralization were top trends. Due to consolidation vendors have now an opportunity to offer clients broader spectrum of solutions, including industry which they can implement not only in the companies in general now, but also in separate divisions. Solutions became more "target", directed to specific audience that allows to do them more preconfigured, thus reducing costs for implementation and reducing total cost of ownership (TSO).

In the market of ERP two "giants" Oracle and SAP still dominate, both of them remain successful and show stable growth. In a segment of SMB they compete with such vendors as Infor, Epicor, Microsoft, Lawson, CDC Software, SYSPRO and QAD. Most actively in 2008 the European developers, including SAP, IFS, Sage Group, Agresso, Exact and Cegid increased business (not all of them are provided in Russia). Partly, according to analysts, it is explained by strengthening of euro in relation to dollar.

AMR Research predicts for the next five years average annual growth of the ERP market about 6%. In 2008 the total amount of the ERP market, by estimates of analysts, was $35.5 billion, in 2009 it will be reduced to $36 billion, but in 2010 will increase to $27.8 billion again, and by 2013 will grow to $48.1 billion.

Forecasts for the size of the market of ERP for 2008-2013, one billion dollars

File:2009-07-09 d3.jpg

Significant changes in the market increase in demand for add-on modules, such as [1] CRM and HRM is not expected, expected. In 2009 the market will feel some recession, sales of new licenses will drop approximately by 15-25%. Income from maintenance and from prolongation of the existing contracts will support the market. As large customers pay for support of the ERP millions of dollars a year, it is possible to consider that they purchase new software each five years. By AMR Research estimates, ERP developers in general collected for maintenance about $14 billion in 2008, and in 2009 this amount still will increase.

If to consider the market in geographical division, then experts assume that the market of developing countries of BRIC (Brazil, Russia, India, China) will outstrip North America and Western Europe on rates of development. Russia became only of developing countries where in the second half of 2008 demand for ERP considerably decreased. Among the developed countries Great Britain and France became such regions.

Shares of ERP of the market in 2008 by the georgafichesky principle

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SMB companies, according to analysts, return to the market, and this segment will become the most fast-growing in the market of ERP in the next five years. Among the large companies projects on corporate standardization and consolidation and also on implementation of add-on modules from the same ERP vendors will be popular.

Aberdeen Group

The Aberdeen Group analytical company issued the report on use of medium business by the ERP companies (2008 ERP in the Mid-Market). In the report data more than about 500 companies with an annual income from 50 million to 1 billion dollars are collected and analyzed.

25% of respondents said that I do not use the ERP system for management of the business at all. For comparison, by estimates of analysts from Aberdeen, among small enterprises (with income less than 50 million dollars a year) ERP systems are not implemented in 64% of the companies, and among large (with income more than 1 billion dollars a year) – in 11% of the companies.

On a question of what factors or tasks could force the management of the companies to invest in projects on implementation of ERP, most of participants (from those who still ERP did not use) answered that rather some external reasons, than internal problems can affect it. So, for 46% of respondents pressure from clients and suppliers, it is difficult for them to adjust and support high-quality relationship with the company which does not have the end-to-end regulated business processes which are "sewn up" in an information system can become a sufficient reason for implementation of ERP.

Among other reasons were called need to observe requirements of regulatory organizations (38%), the business growth exceeding the forecasts (32%) which are earlier made by the company, requirements of the head company (32%). 32% of the companies hope for the special offers and actions reducing risk of implementation (probably, marketing initiatives of vendors mean). 24% of respondents wait for "bolt from the blue", i.e. some unexpected and unfavorable event which will prove them impossibility to live without ERP. And 24% of the companies specified the sudden and "explosive" growth of activity as a decisive factor.

According to experts, in process of growth and promotion of the company from a segment of medium business, small to a segment, many heads begin to feel that they lose control over the business. And the longer they will wait and hope to return transparency of management without investments into IT, the more difficult there will be for their companies this task afterwards and the great efforts will be demanded by its solution.

Besides, the report revealed a tendency to more and more complete use of opportunities of ERP. If to assume that certain average ERP includes 24 modules, then the normal company of medium business uses 10.7 of them. From all set of the functionality implemented in these modules, the companies involve about 72% that corresponds to 32.1% proceeding from "complete power" of ERP. For manufacturing enterprises these indicators are slightly higher, but differ only on percent shares.

According to a research, the most part of respondents (63%) use only one ERP system, 19% - two and 18% - three and more separate ERP systems. Such situation, according to analysts, is characteristic of the companies which were created by merges and absorption, and unification of ERP systems was postponed "until the best times" or when divisions of the company have big independence.

At the same time 22% of the companies of medium business use ERP only in one division \office, 18% - in two, another 18% - in three, and 42% - in four and more.

Experts believe that such growing geographically-distributed structure of business structures and existence of several separate automation systems considerably reduce transparency of transactions, but at the same time do this task even more important.


According to Cindi Dzhutras, the vice president on production and to ERP systems of Aberdeen Group analytical company, small enterprises try to bring as soon as possible to a system necessary data and to begin work in it. Unfortunately, they, as a rule, on it also stop, without trying to use powerful software products at more advanced level.

According to the research Aberdeen within which 1200 production companies which implemented ERP systems were considered, 86% of small enterprises began productive use of systems within a year with the beginning of projects whereas for medium-sized companies this indicator is only 64%, and for large – 47%.

24% of small enterprises (with an annual income less than 50 million dollars) from respondents 450 are happy with the high speed of implementation of ERP systems. Such aspiration to the fastest start is explained by limitation of those resources which can be selected for IT.

Eric Klein, the analyst from AMR Research, considers that small enterprises especially are afraid "get stuck" in long and difficult implementation projects. Partially is explained by it low indicators of distribution of ERP systems among small enterprises. For the last year the scope of the small companies ERP systems increased only by 3.3% whereas for medium-sized companies (with an annual income from 50 to 250 million dollars) this indicator grew by 17%, and for large (from 250 million to 1 billion dollars) for 13%.

In opinion Dzhutras, the speed of implementation cannot be success criterion as it is not always followed by fast return of investments.

Small enterprises do not use a considerable part of the functionality put in a system for which they, nevertheless, already paid. By words Dzhutras, all of them still expect more spreadsheets.

According to the research Aberdeen, only less than a third of small enterprises in general count an indicator of return of investments from implementation of the ERP systems. Actually, really successful implementations can be observed only at those small enterprises which care for such indicators as ROI and cost reduction.

2007

IDC

According to Research Firm IDC, in the last two years the aims which are pursued by the companies of medium business, investing in development of the business applications, quite significantly changed. If at the beginning of 2006 among the most essential factors were called desire to raise employee performance and to raise revenues of the company, then at the end of 2007 the aspirations to improve business processes in the company began to come to the forefront, it most full to meet requirements of the clients and to obtain all necessary information for acceptance of management decisions.

Three major purposes of implementation of corporate financial systems

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According to IDC company, 2007

In general, more than a half of respondents specified that do not intend neither to increase, nor to reduce investments into development of financial business applications. At the same time the companies of an upper segment of medium business are more inclined to invest heavily in development of corporate information systems.

The planned investments  on development  of financial business applications

within  the coming 12 months

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According to IDC company for the end of 2007

More than for a half of the companies projects on implementation of corporate financial systems were more costly, than it was supposed in the beginning.

Exceeding of project budgets at implementation of financial systems

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According to IDC company, 2007

83% of respondents said that having decided to update the financial business applications, they most likely will address besides to the supplier, despite of the cost and conditions of projects as they consider that the choice of suitable solutions is still not too broad.

See Also

ERP systems: concept, functions, features of the choice and implementation

Cloud ERP-cistema

Notes