The overview of the world market of ERP systems in power

By estimates  of ARC Advisory Group, the share of the world market of ERP systems falling on systems in large business where, undoubtedly it is necessary to carry the enterprises of power makes more than 13 billion dollars.

Being the capital productive (Asset-Intensive) industry, the power requires compulsory attendance in the ERP system of the module MRO/CMMS (maintenance and repair / Computerized Maintenance Management System). This module can be implemented or in the form of separate EAM (Enterprise Asset Management) - a system, or as a part of a complex ERP system. According to the researches ARC Advisory Group, 40% of the world market of EAM are the share only of power industry. And taking into account heat-and-power engineeering and municipal services it is possible to say that more than a half of the market of the similar systems in general is the share of power. Therefore it is possible to consider Enterprise resource planning with the module EAM/CMMS as profile for the power industry.

By  estimates of analysts  of ARC Advisory Group, the world market of EAM systems (not including  IT EAM) in 2007 made $ 1.5 billion. According to the research "EAM/CMMS Solutions Worldwide Outlook" (the overview of solutions EAM/CMMS in the world) ARC predicts increase in volume of this market up to $2.1 billion in 2011.

Source:  ARC Advisory Group, 2007

At gradual reduction of prices of traditional EAM/CMMS of the solution, increase in income of this sector of the market, according to analysts  of ARC Advisory Group, it is reached due to receiving means from maintenance, and implementation of new, "expanded" functionality of EAM/CMMS of products using new technologies – the Internet, mobile wireless devices, RFID and also performing new statutory requirements and instructions. Similar "expansions" will give the main share of growth for the leading suppliers and will provide essential advantages to users in the next years. By estimates, the market of such "expanded" solutions will grow about 10% annually and will serve as a pacing factor of growth of this, in general, mature segment of the market. Growth of many large companies is also reached due to merges and merger of smaller developers.

According to Gartner Group, in international market there are more than 400 solutions of the class EAM/CMMS (as separate, and as a part of ERP systems). Among leading manufacturers, according to different analysts, it is possible to select producers of the separate EAM systems:

• IBM (byvsh.  MRO Software);
• Invensys;
• Indus;
• AssetPoint;
• Mainsaver;
• iMaint.

And producers of ERP systems as a part of which there are modules developed by a MRO:

• Infor;
• Lawson Software (byvsh. Intentia);
• IFS;
• Oracle;
• SAP;
• Mincom.

As the report is devoted to ERP systems, we will dwell upon them slightly. Infor does not position itself as decision maker for the power industry, and other producers, according to their own data, give such information on the number of clients in the power industry.

The global leader in number of ERP clients in the power industry in the world is Oracle

However, when the companies speak about clients in power, there is not always a speech about implementation of the complex ERP solution. So, the SAP AG company, according to UtiliPoint International, headed in 2007 ratings "System providers of customer service management for the municipal enterprises", "System providers of customer service management for private enterprises" and "System providers of customer service management in the non-regulated markets" at energy market and housing and public utilities of North America. Oracle, according to Gartner Group, took in 2007 the leading positions on information management systems about clients in the industry of power and housing and public utilities  (Oracle Utilities Customer Care & Billing is the system of subscriber accounting and billing) and on management systems for emergency shutdowns at the enterprises of power industry and the utility sector (Oracle Utilities Network Management System). The IFS company initially developed the IFS Applications system for solving of tasks of maintenance and repairs in power and, according to ARC Advisory Group, it possesses more than 20% of the world market of EAM solutions for power. And if to speak about implementation of complex ERP systems, then 3 above-mentioned companies compete for world leadership in automation of power. SAP takes the leading position, it is followed by Oracle and IFS, having at the same time according to different analysts, rather close market shares (12-15%).

In addition to financial leadership, it is estimated as well technology. Research firm Gartner, Inc. in the annual research "Magic Quadrant of Service Management Systems of Clients for the Energy Sector and Housing and Public Utilities, 1H071" (Magic Quadrant for Utilities Customer Information Systems, 1H07) considered products of 7 vendors operating in the world market (Excelergy, First Data Utilities, Indra, Lodestar, Oracle Utilities, SAP, Ventyx). These 7 vendors were selected from more than 200, present at the world market by the following criteria:

• The vendors included in rating should provide global market coverage and have an opportunity to satisfy to requirements for regulated and competitive retail markets.
• Sales proceeds of licenses for the considered software products should exceed 2 million US dollars within the last 12 months.
• Software products should meet to the minimum set of functional requirements, including revenue management, customer relationship management, management of services and product management.

Magic Quadrant for Utilities Customer Information Systems

Source: Gartner Gartner (May 2007)

At assessment of technology leaders in the field of EAM, from more than 400 participants of this sector of the world market company Gartner, Inc. in the research Magic Quadrant for Enterprise Asset Management for Manufacturing, 2007 selected 9 vendors (AssetPoint, IBM, IFS, Infor, Invensys, Lawson Software, Mainsaver, Oracle, SAP). The research included 10 products – at Oracle is them 2 (E-Business Suite and JD Edwards EnterpriseOne), selected by the following criteria:

• Obvious experience in creation of EAM-systems for production companies (at least 1/3 income from implementation of EAM systems should go from a manufacturing sector).
• Have income on EAM over 20 million US dollars (or to be a part of larger organization with income more than 1 bln. dollars of the USA).
• EAM the solution can be both independent, and a part of the ERP system/EAM.
• The solution should be used not less than in 2 sectors of production.
• Software products should meet to the minimum set of functional requirements, including detailed accounting of assets, long-term service, support of difficult commodity relationship, support of probabilistic stocks and purchases, logistic transactions, a possibility of monitoring and performance review and reliability of the equipment, serial tracking of parts and the equipment, financial support through detailed expense analysis, integration with financial and HRM systems.

 Magic Quadrant for Enterprise Asset Management for Manufacturing, 2007

Source: Gartner (September 2007)

SAP and Oracle are included into the list of technology leaders both in the field of CRM, and in the field of EAM, IFS is present only at a magic quadrant on EAM technologies. But it is possible to tell that financial leaders are also technology leaders in this sector of the market.

In general, it is possible to speak about a sufficient maturity of the market of ERP systems in power and saturation its different solutions in Europe and North America. However, the sharp economic growth of a number of developing countries (and including development of the power industry) does their power enterprises by active consumers of solutions of the class ERP/EAM, providing additional development of the world market.