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2021/08/25 16:00:42

ERP systems (global market)

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2020

ERP systems market grew 4% to $40 billion - Gartner

By the end of 2020, the volume of the global market for software systems designed to manage the enterprise reached $40 billion, an increase of 4% compared to a year ago. Such data in August 2021 led the research company Gartner.

According to analysts, the coronavirus pandemic COVID-19 led to the freezing and reduction of IT budgets of companies, which, in turn, limited the new supply of ERP systems, as well as the extension of contracts. Despite this, most of the major players in the ERP market were able to complete 2020 with results no worse than in 2019, and some vendors even managed to increase revenue.

The market for ERP solutions was largely helped by the model of sales of products by subscription - it accounted for about 90% of revenues in 2020.

The market for ERP systems in 2020 grew by 4%, to $40 billion
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While organizations were within budget constraints in 2020, tactical and unplanned expenditures were observed in a number of areas. For example, sales of financial management systems grew by 3% and turned into a market characterized by almost $15 billion and increased demand for cloud solutions for budgeting, planning and analytics, the Gartner report says.
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Tactical purchases were most noticeable in the HCM systems market, which in 2020 grew by 6%, to $18 billion. Many companies, in anticipation of the weakening of the COVID-19 coronavirus pandemic, are rapidly expanding remote recruitment, training, adaptation and engagement measurement in addition to preparing a safe work environment, analysts said.

Another key finding in the report is that "some organizations have accelerated projects to reduce legacy costs and increase system flexibility." In 2020, company spending and investment plans did not return to pandemic volumes, but selective investments and prioritization did occur. Indeed, some organizations have actually accelerated their ERP modernization projects so that they can better handle the situation and look to the future, the researchers said.

It is noteworthy that 2020 was a clear demonstration of the benefits of cloud ERP systems, as the pandemic has increased the relevance of end-user implementation. Prior to this, for many years, manufacturers have talked about benefits such as simpler deployment, reduced IT management costs, and ongoing innovation. Although these advantages of enterprise management systems do exist, the information that manufacturers tried to convey did not always have the impact that they expected in "normal business conditions."

The ERP solutions market was helped by the subscription product sales model - it accounted for about 90% of revenues

Against the background of the difficult situation in the global economy, many companies in 2020 decided to maintain their current ERP system, simply making an upgrade. Although upgrade is usually a less expensive and long-term process compared to ERP implementation from scratch, in fact it is not always the best option. For example, if an organization has made significant changes to the ERP, the system will be difficult to update.

Another reason why companies refuse to finalize the system in favor of replacing it with a new one is that they associate their existing problems with the current vendor, and are sure that the upgrade will not help.

Among organizations that do not want to use cloud ERPs, the most common reason for abandoning them is the lack of information about these products. Another reason is business concerns about information security.[1]

Gartner Quadrant for Cloud ERP Providers

In June 2020, Gartner introduced the Magic Quadrant for providers of cloud ERP solutions for product-oriented companies. The quadrant includes 8 vendors. The leaders include Oracle with the ERP Cloud product. The main group of study participants fell into the category of visionaries - Microsoft, Infor (CloudSuite), Epicor, IFS, QAD and again Oracle with the product NetSuite ERP. Acumatica and Plex Systems are among the niche players.

Magic Quadrant for Cloud ERP Solutions Providers for Product-Oriented Companies

2018: Market growth by 10% to $35 billion - Gartner

In 2018, the global enterprise resource planning (ERP) software market reached $35 billion, an increase of 10% compared to the previous year. This is evidenced by Gartner analysts .

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

ERP Market Leaders in 2018, Gartner Data

The study notes that the market for ERP products is mature (some vendors have been working on it for about 40 years), but it still has great potential for growth.

The largest manufacturer of such software is also SAP, which in 2018 earned about $7.7 billion from such solutions. With a large lag behind the German company, Oracle is located, which recorded $3.9 billion in income in the asset.

The leading three closed Workday with ERP revenue of $2.33 billion in 2018. Infor is in fifth position, the sales of which in the market in question turned out to be equal to $1.72 billion.

There was only one change in the top 5 in 2018 relative to 2017: Workday rose from fourth to third position. For the first time, the cloud company entered the top three in the ERP market, experts say.

SAP unreservedly leads not only in the entire ERP market, but also in its largest segment - financial accounting systems. In 2018, SAP revenue from sales of such solutions reached $2.98 billion. On human capital management (HCM) software, the German company earned $2.7 billion, on production process management systems - $1.79 billion.

Oracle defends itself from SAP in all segments. Moreover, the American corporation is also inferior to Workday in terms of the volume of sales of human capital management systems: company revenues here in 2018 turned out to be equal to $1.9 billion and $2.02 billion, respectively.

In the category of financial accounting systems, Sage is ahead of Oracle with revenue of $1.53 billion against $1.43 billion from a competitor. And in the software segment for managing the production process, Oracle does not reach Infor, according to Gartner data for 2018.

Among the manufacturers of fixed asset management systems, there are no equal SAP and Infor, which earned about $244 million and $164 million from the sale of such solutions in 2018, respectively.

According to analysts, the market remains fragmented: the five largest manufacturers account for only 51% of software sales.

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This suggests that the largest does not always mean that it is best in terms of product functionality, industry, geography, etc. And there is a huge demand for alternatives to high-profile names. Every year, we communicate with hundreds of small suppliers who often focus on certain markets with loyal customers, but who have a small area of ​ ​ influence outside their area, "said Gartner analyst Deborah Wilson, who holds the position of managing vice president of market research at ERP.
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She noted that the market for ERP systems is growing as new vendors seek to master emerging areas, such as financial planning and employee involvement in the workflow. In these areas, small suppliers are often more flexible than large competitors.

Cloud services in 2018 remained a prominent segment in the ERP market, but local solutions do not disappear anywhere - this is especially true for operational solutions and use cases related to confidential data or a high level of legislative regulation.

The global enterprise resource planning (ERP) software market reached $35 billion, an increase of 10% over the previous year

The popularity of cloud-based ERP products is largely due to the convenience of their implementation, because firstly, such systems can be tested in combat conditions without laying out large sums for implementation.

If you follow the path of the local infrastructure, you need to configure everything yourself: buy licenses for the server operating system, for the SQL server, for the ERP server itself. Plus, it may happen that you have to update the equipment. All these expenses are not justified if you only need to evaluate the performance of the ERP system.

Another thing is a virtual server. The cost of the operating system is often included in the cost of its lease. The SQL server can also be rented (like many other licenses), and then, when it becomes unnecessary, refuse. With purchased licenses, this cannot be done, so they often fall into dead weight when the need for them disappears.

The flexibility of virtual servers allows companies to evaluate the ERP system without hardware costs and choose the one that is best for managing the enterprise on an ongoing basis.

The market for enterprise resource planning systems remains growing, despite the uncertainty in the political and economic situation that occurred in 2018.

IDC The report confirms the rise of the global ERP market at the end of 2018, but does not disclose the dynamics in their free samples for research. Analysts only point to "steady growth" and accelerated changes in the market thanks to the so-called third platform (IDC which includes cloud, analytics and mobile technologies, social networks and solutions) Big Data and the engines of innovation in the field of cognitive systems, such as and. machine learning Internet of Things

This acceleration is facilitated by rationalization, modernization and transformation, as companies switch to innovative cloud ERP solutions, according to the report.[2]

2017: Market leaders according to Gartner

2017 ERP Market Leaders, Gartner Data

2016:10 most popular ERP systems

In December 2016, the consulting company Panorama Consulting Solutions, which deals with the problems of implementing ERP systems, announced a rating of the largest manufacturers of such software.

Analysts estimated vendors by market shares, cost and duration of product implementation, return on investment terms  and software functionality. The data were taken from Panorama's annual ratings for the period from September 2012 to February 2016. About 1660 respondents took part in the survey. Information about the functionality of the software was obtained based on the results of the evaluation of demonstration versions of products by Panorama customers.

The rating of the largest manufacturers of ERP systems is compiled

According to Panorama, by 2016, SAP has the largest share in the global market for ERP systems (more than 20%). The top three are Oracle (13.9%) and Microsoft (9.4%). The following companies are located:

SAP took the first place in terms of the return on investment in ERP. Oracle products are leading in terms of implementation speed, and NetSuite systems have captured the palm tree in terms of implementation costs, which cost customers an average of 2.8% of revenue.

The Panorama study also highlights the benefits of Infor systems, such as the extensive use of mobile versions by remote offices and employees, reliable and intuitive tools for analyzing business data, and optimal time and cost of implementation, as well as ROI.

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 of Infor CloudSuite.[3]

2015

Global Industry Analyses forecast: $67 billion

According to the forecasts of the American company Global Industry Analysts, in 2015 the global market for ERP systems will reach a volume of $67.8 billion. The positive dynamics of the market will ensure increased competition in all sectors of the world economy.

The study says that North America and Europe dominate the global market for ERP systems. Asia-Pacific and Latin America remain significant market segments, with rapid growth. It is expected that the countries included in these regions will also take a leading position in the global ERP market in the near future.

Among the largest players in the global ERP market, Global Industry Analysts are named:

Forrester Research forecast: $50.3 billion

According to the company's forecasts, the global market for ERP systems in 2015 should reach $50.3 billion.

2014

AMR Research 2020 Forecast

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

According to analysts, the advent of cloud technologies in the market will lead to a paradigm shift in deployment methods. Cloud ERP systems require significantly less investment in IT resources and offer more flexibility. Thus, customers will move from on-premise solutions to cloud ERP systems. In addition, the function of accessing ERP from mobile devices will be further developed.

According to AMR, by 2020, on-premise ERP systems will also have a larger market share - about 57%, while cloud ERPs will show higher growth - on average by 10% during 2014-2020.

As for consumers of ERP systems, an increase in the share of the aerospace and defense industries is expected, this category is projected to grow by an average of 8.86% during 2014-2020. One of the fastest growing ERP markets will be the Asia-Pacific region. According to analysts, by 2020 it will reach $9.77 billion.

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[4]

2012

Gartner Quadrant, Global Market for ERP Systems

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2011

IDC: ERM market for the first half of 2011

On December 22, 2011, IDC published the latest results of the Worldwide Semiannual Enterprise Resource Management (ERM) Applications Tracker.

According to Wilvin Chee, IDC's assistant vice president, companies are expected to spend a total of $37.9 billion on ERM during 2011. "In terms of functional markets, three out of eight are expected to work best. This is the market for financial management and strategy products, order management, as well as project portfolio management, "said Chi.

Growth above the market average is expected in all countries, excluding the United States and Japan. In the regions of Latin America, Central and Eastern Europe, the speed of market development will be highest, as investment in ERM in Brazil, the Czech Republic, Israel, Romania, Russia and South Africa will increase. In the Asia-Pacific region, a traditionally strong rise continues with Australia, China, India and Indonesia at the head. In 2012, investment is expected to slow down, which will lead to growth of 6.3%. This happened in 2010.

Scott Guinn, Director of Enterprise Applications Research, noted that the smooth recovery of the global economy has led to a greater need for software and services to help reduce costs that help manage risk, improve production efficiency, and identify new opportunities for further growth. "Technological trends supporting economic and market recovery include the development and creation of such architectures as cloud computing, mobility, new social models and tools for attracting and developing services for customers, employees, suppliers, partners. These technologies, the restructured business models and the processes they initiate will play a vital role in stimulating costs for enterprise resource management solutions, "he stressed.

Only three ERM vendors were able to reach revenue of more than $1 billion in the first half of 2011 - these are SAP, Oracle and Microsoft. Thus, they strengthened their position in the TOP-3. Despite impressive revenue figures, SAP and Microsoft still managed to achieve growth indicators above the market average in the first half of 2011. Outside the top three, competition in the market remains very intense. In five of the eight functional markets, according to the study, more than 100 vendors are represented. The most intense competition was identified in the sector of financial accounting products, human capital management and procurement management.

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

The IDC study covered 370 ERM vendors in 49 countries worldwide, taking into account the market volume over two years, participant shares, as well as forecast data for eight functional markets that make up the ERM software market, according to the company's systematics.

Forrester Research ERP Systems Market Forecast

The global market for ERP systems in 2011 will be $45.5 billion, compared with $43 billion in 2010. Forrester predicts that vendors, Infor, and Oracle Sage SAP will continue to increase solution capacity through acquisitions. Revenues from licenses will begin to fall by 2015, and revenues from escorts, on the contrary, will go up.

Product subscription yields will rise as revenues from cloud ERPs rise 21% year-on-year through 2015. SAP and Oracle will remain the main players in the ERP market. Suppliers of specialized ERPs will continue to compete with them. As a result, the market continues to be fragmented.

According to Forrester Research, the number of companies planning to invest in their ERP systems will decline in 2011, despite the overall expected growth in IT costs. 25% of the approximately 900 companies surveyed by Forrester plan to upgrade, expand, or implement ERP systems, up from 29% in 2010. But 72 % of them are "on standby," without specific investment plans in ERP software.

Gartner ERP Market Development Estimates

According to Gartner[5], 2011 was a positive year for most vendors in the global ERP systems market, despite the fact that revenue from license sales reached the pre-crisis level of 2008. Compared to 2010, it increased by 10% to $23.3 billion. Of these, about $2.7 billion came from the supply of ERP systems to product-oriented companies.

Along with the growth of vendor wealth in the global ERP market, M&A activity resumed, although several previous years it was concentrated mainly in the HCM (human capital management) sector. Major deals include the purchase of Lawson Software by Infor (closed in April 2012), as well as the purchase of Epicor by Activant Software.

Among the main trends in the market, Gartner includes: strengthening the SOA model, especially in terms of offers for midsize companies, optimizing user interfaces, mobile access to ERP systems, growing the Internet to SaaS and cloud ERP solutions.

As for the leading vendors in the market, according to the magic square of Gartner for ERP systems designed for product-oriented midsize companies, include SAP Business One and Microsoft Dynamics AX solutions.

Product-oriented companies in Gartner terminology include both production companies of a variety of industries, the ultimate goal of which is the production of any product, and distribution companies that purchase, and then re-compose and sell, as well as deliver products. As for the scale of the business, it varies from 10 employees in the state to joining the Global 2000 list and 10 thousand employees, while the revenue of companies ranges from $50 million to $1 billion.

Typically, such companies have limited IT resources and choose ERP systems primarily for total cost of ownership (TCO). However, issues of completeness of functionality also play a significant role. In addition, it is worth taking into account that only systems that are represented globally are included in the magic square. But in some regional markets, for example, in Brazil, there are very strong local ERP players (for example, Totvs, revenue in 2010 is $600 million, market share is about 50%).

Magic Square ERP Systems
for Midsize Product-Oriented Companies

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Gartner, June 2012

In addition to SAP and Microsoft, the meaning of which was noted above, according to the magic square of Gartner, Oracle JD Edwards EnterpriseOne, Oracle E-Business Suite and IFS Applications, which are squared Challengers, also stand out in the market. Niche solutions include QAD Enterprise Application, Lawson M3 ERP Enterprise, Sage ERP X3, Infor 10 ERP Enterprise. The Epicor ERP solution is assigned to the frame of visionaries.

Panorama on major ERP suppliers

Panorama Consulting Group published another study of leading ERP vendors under the intriguing name "Battle of the Titans." In a similar study in 2010, SAP and Oracle were thoroughly compared, and in 2011 they also included solutions from the Microsoft Dynamics line.

During the study, 1.8 thousand implementations in different countries of the world carried out over the past 6 years were analyzed. Some findings were identical to those of previous years.

So, the report says, SAP still leads the global market for ERP systems with a share of 24%, in second place is Oracle Corporation, in third - Microsoft Dynamics. Since SAP is the market leader, the company's solutions are most often shortlisted when choosing an ERP system (in 38% of cases).

However, if Oracle solutions fall into the shortlist of tenders, then the likelihood that the company will still make the choice in favor of Oracle is highest against the background of competing solutions (22%).

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

As for the unexpected findings of the study, for example, this year it was established that the level of satisfaction of Oracle customers is the highest - 80%. Moreover, the performance of the closest competitors is much lower: SAP - 39%, and Microsoft Dynamics - only 33%.

At the same time, the implementation of Microsoft Dynamics on average takes the most time (14 months) compared to SAP (13 months) and Oracle (11 months). Microsoft Dynamics also has the largest discrepancies in the ratio of the expected implementation time and its real duration.

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

In addition, Microsoft Dynamics solutions have the lowest cost of ownership (about $500 thousand) compared to Oracle and SAP, whose solutions are considered the most expensive in terms of further operation.

SAP projects have the lowest overspend (8% of the budget), Microsoft is second (14%), Oracle is third (15%). This suggests that although SAP customers spend more on implementation, they clearly understand what they expect from the project and are able to plan it competently.

Perhaps the most interesting conclusion is that there is a correlation between the duration of the implementation and the level of customer satisfaction. So, the more time it takes for the project, the less satisfied customers are. The implementation of Microsoft Dynamics lasts an average of 14 months, and customers of this line have the worst satisfaction rate - 33%. Oracle, on the contrary, has the shortest average implementation period (11 months), and the level of customer satisfaction is the largest.

In addition, the fact that the implementation of Microsoft Dynamics brings the fastest ROI does not affect the satisfaction of companies using line solutions. Thus, business benefits are not a determining factor in achieving satisfaction from the implementation of the ERP system.

2010

IDC

In the first half of 2010, the global market for enterprise resource management applications or ERM (Enterprise Resource Management) reached $16.5 billion, an 8.1% increase compared to the same period in 2009, according to IDC.

Among the world's largest markets for ERM systems, Brazil is named as the fastest growing market, which in annual terms showed growth of 39.3%, while Australia showed an equally impressive 38.4% growth in constant currency.

Within the entire ERM market, the most rapidly developing segment is the Enterprise Asset Management (EAM) system segment, which grew by 12.2% compared to the first half of 2009.

She became the leading vendor in the first half of 2010, SAP earning about $2.45 billion from ERM during this period. SAP has become a key vendor in 9 of the 13 countries included in the study. Vendor number two became Oracle in the general ERM category, traditionally having a strong practice in the field of Financial Performance and Sategy Management Applications.

Gartner

The Gartner Market Report on ERP Systems for Medium-Sized Product-Oriented Companies analyses the global enterprise resource management and planning (ERP) market for manufacturing companies with 100 to 999 employees, with annual sales of $50 million to $1 billion.

In 2010, Microsoft Dynamics AX and SAP Business All-in-One were included in the Magic Square as leaders in this market. Challengers are Oracle JD Edwards EnterpriseOne, Oracle E-Business Suite, Infor CloudSuite Industrial (formerly ERP SyteLine) and QAD Enterprise Application. The visionary recognized the system Epicor 9. Niche solutions are IFS Applications, Microsoft Dynamics NAV, Syspro, Sage ERP X3, Extract Globe, Infor ERP LN, Infor M3 (Lawson) Enterprise Management System.

Key market changes since the publication of the previous "magic square":

  • Customers are beginning to adapt redesigned user interfaces that offer a more role-based and personalized concept, as well as collaboration tools. They are distinguished by improved usability, enhanced search capabilities, and more integrated analytical functions that attract those users who rarely use the ERP system.
  • Interest in ERP based on the SaaS model is growing, but at the moment there is no adaptation to this model of key products in the market. Most of the customers who took part in the study continue to receive ERP under the on-premises model, but supplement it with other software products under the SaaS model - for example, CRM systems or collaboration tools.
  • Many clients note that the lack of qualified consultants creates problems for them in the implementation of ERP projects. In this regard, many vendors began implementing programs to improve the partner channel, offering deeper skills and certification.
  • Despite the market's overall ERP decline of 6%, nothing happened to key vendors that would shake their market positions. None of the key players left the market and was not acquired by competitors. Cash flows from existing customers created a kind of airbag for vendors.

Aberdeen Group

According to a new report by the analytical company Aberdeen Group Inc, which describes the state of the market for the introduction of ERP systems in the small and medium business segment (SMB), companies with annual revenues of $500 million and less than 50% are more active in relation to such projects compared to large business companies. Often, small and medium businesses have more efficient tools to keep track of a company's business processes in real time.

SMB is aware that a stable and efficient information infrastructure is essential for sustainable business growth and competitiveness in the future. Therefore, such companies believe that the seeds for such "growth" should be planted now, the expert report says.

Along with growing optimism from the global recovery, SMB companies have again gained hope for growing profits, said Cindy Jutras, vice president of Aberdeen Research Group. "As a result, they must find competitive advantages that will help them control costs and ensure income growth not only due to growing profits," she said.

In such a situation, Enterprise Resource Planning (ERP) systems can become a strategic weapon. They not only create the necessary infrastructure that forms the main accounting systems on which the business is based, but also serve as a source of cost savings and streamlining and accelerating business processes. All this allows small and medium businesses to compete with larger enterprises.

According to analysts, an effective ERP implementation can reduce operating costs by 22%, administrative - by 20%, and resource - by 17%. Also, on average, deliveries and their time improve by 19%, and compliance with internal deadlines - by 17%. Such optimization can provide from tens of thousands to millions of dollars in savings, the researchers say.

2009

Gartner

In 2009, the ERP systems market as a whole decreased by 6% to $20.1 billion, of which 27%, that is, about $5.3 billion, accounted for the medium-sized business systems segment. At the same time, the decrease in the volume of the system segment for medium-sized businesses turned out to be small - only 1%. This means that despite the crisis, it was this type of company that was most active in buying ERP systems. At the end of 2010, according to Gartner, the market will remain "flat," that is, despite macroeconomic improvements, its growth will be very small. However, this market will remain highly competitive.

2008

AMR Research

AMR Research believes that the whole of 2008 for the ERP market can be divided into two parts, with the first half of the year showing stable growth. However, after the September bankruptcy of Lehman Brothers and subsequent events, many companies lost faith in a stable future and sharply suspended investments and froze current projects. This trend was especially pronounced in the SMB segment, which recently was considered the most active consumer of ERP solutions.

ERP Market Shares in 2008 Depending on Annual Customer Income

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In 2008, globalization and centralization were the main trends in the ERP market. Through consolidation, vendors are now able to offer customers a wider range of solutions, including industry solutions, which they can now implement not only in companies as a whole, but also in individual departments. Solutions have become more audience-oriented, making them more targeted, thus reducing implementation costs and total cost of ownership (TCO).

The ERP market is still dominated by two "giants" Oracle and SAP, both of which remain successful and show steady growth. In the SMB segment, they compete with vendors such as Infor, Epicor, Microsoft, Lawson, CDC Software, SYSPRO and QAD. The most active in 2008 were European developers, including SAP, IFS, Sage Group, Agresso, Act and Cegid (not all of them are represented in Russia ). In part, according to analysts, this is due to the strengthening of the euro against the dollar.

AMR Research predicts an average annual ERP market growth of about 6% over the next five years. In 2008, the total volume of the ERP market, according to analysts, amounted to $35.5 billion, in 2009 it will decrease to $36 billion, but already in 2010 it will increase again to $27.8 billion, and by 2013 it will grow to $48.1 billion.

ERP Market Volume Forecasts 2008-2013, Billion Dollars

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No significant changes in the market are expected, demand for additional modules such as CRM and HRM is expected to increase. In 2009, the market will experience some decline, sales of new licenses will fall by about 15-25%. The market will be supported by revenues from maintenance and from the extension of existing contracts. Since large customers pay millions of dollars a year to support their ERPs, they can be considered to purchase new software every five years. According to AMR Research, ERP developers as a whole raised about $14 billion for maintenance in 2008, and in 2009 this amount will still increase.

If we consider the market in geographical division, then experts admit that the market of developing countries BRIC (Brazil, Russia, India, China) will be ahead of North America and Western Europe in terms of development. Russia was the only developing country where demand for ERP fell markedly in the second half of 2008. Among the developed countries, Great Britain and France became such regions .

ERP market shares in 2008 according to the Gheorgafic principle

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SMB companies, according to analysts, are returning to the market, and this segment will become the fastest growing in the ERP market in the next five years. Among large companies, corporate standardization and consolidation projects will be popular, as well as the introduction of additional modules from the same ERP vendors.

Aberdeen Group

The analytical company Aberdeen Group issued a report on the use of ERP by medium-sized businesses (2008 ERP in the Mid-Market). The report collects and analyzes data on more than 500 companies with annual revenues of $50 million to $1 billion.

25% of respondents said that I do not use the ERP system at all to manage my business. For comparison, according to Aberdeen analysts, among small enterprises (with an income of less than $50 million per year), ERP systems are not implemented in 64% of companies, and among large ones (with an income of more than $1 billion per year) in 11% of companies.

When asked what factors or tasks could force company management to invest in ERP implementation projects, most participants (of those who have not used ERP so far) responded that it could be influenced by some external causes rather than internal problems. So, for 46% of respondents, a sufficient reason for the implementation of ERP may be pressure from customers and suppliers who find it difficult to establish and maintain high-quality relationships with a company that does not have end-to-end regulated business processes that are "sewn" into the information system.

Other reasons included the need to comply with the requirements of regulatory organizations (38%), business growth exceeding the company's previous forecasts (32%), and the requirements of the parent company (32%). 32% of companies hope for special offers and promotions that reduce the risk of implementation (apparently, these are vendor marketing initiatives). 24% of respondents wait for "thunder in the clear sky," that is, some unexpected and unfavorable event that will prove them impossible to live without ERP. And 24% of companies indicated as a decisive factor a sudden and "explosive" growth in activity.

According to experts, as the company grows and moves from the small to the medium-sized business segment, many executives begin to feel that they are losing control of their business. And the longer they wait and hope to return transparency to management without investing in IT, the harder this task will be for their companies later and the more effort it will require.

In addition, the report revealed a tendency to increasingly take advantage of ERP capabilities. Assuming that a certain averaged ERP includes 24 modules, then an ordinary medium-sized business company uses 10.7 of them. Of the entire set of functionality implemented in these modules, companies use approximately 72%, which corresponds to 32.1% based on the "full power" of ERP. For manufacturing enterprises, these figures are slightly higher, but differ only by a fraction of a percent.

According to the study, most respondents (63%) use only one ERP system, 19% use two and 18% use three or more separate ERP systems. This situation, according to analysts, is characteristic of companies that were formed through mergers and acquisitions, and the unification of ERP systems was postponed "to the best times," or when the company's divisions have greater independence.

At the same time, 22% of medium-sized businesses use ERP in only one of their divisions\office, 18% in two, another 18% in three, and 42% in four or more.

Experts believe that such a growing territorial distribution of business structures and the presence of several disparate automation systems significantly reduce the transparency of operations, but at the same time make this task even more important.


According to Cindy Jutras, vice president of production and ERP systems at Aberdeen Group, small enterprises are trying to get the necessary data into the system and start working in it as soon as possible. Unfortunately, they tend to stop there without trying to use powerful software products at a more advanced level.

According to a study by Aberdeen, which examined 1,200 manufacturing companies that implemented ERP systems, 86% of small enterprises began productive use of systems within a year from the beginning of projects, while for medium-sized companies this figure is only 64%, and for large ones - 47%.

24% of small enterprises (with an annual income of less than $50 million) out of 450 respondents are satisfied with the high rate of implementation of ERP systems. This desire for early launch is due to the limited resources that can be allocated to IT.

Eric Klein, an analyst at AMR Research, believes that small businesses are especially afraid to "get bogged down" in long and complex implementation projects. This partly explains the low distribution of ERP systems among small enterprises. Over the past year, coverage of small ERP companies increased by only 3.3%, while for medium-sized companies (with an annual income of $50 to $250 million) this figure increased by 17%, and for large companies (from $250 million to $1 billion) by 13%.

According to Jutras, the speed of implementation cannot be a measure of success, since it is not always accompanied by a rapid return on investment.

Small enterprises do not use a significant part of the functionality laid down in the system, for which they, however, have already paid. They still count more on spreadsheets, Jutras said.

According to an Aberdeen study, only less than a third of small enterprises generally calculate the return on investment from the implementation of their ERP systems. In fact, only small enterprises that care about indicators such as ROI and cost reduction can have truly successful implementations.

2007

IDC

According to research firm IDC, over the past two years, the goals that medium-sized businesses pursue by investing in the development of their business applications have changed quite significantly. While at the beginning of 2006, the most significant factors were the desire to increase the efficiency of employees and increase company revenues, at the end of 2007, the desire to improve business processes in the company began to come to the fore, most fully meet the requirements of their customers and receive all the necessary information for management decisions.

Three Critical Goals for Enterprise Financial Systems

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According to IDC, 2007

In general, more than half of respondents indicated that they did not intend to either increase or reduce investments in the development of financial business applications. At the same time, companies in the upper middle business segment are more inclined to invest heavily in the development of corporate information systems.

Planned investment  in  financial business applications

within the  next 12 months

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According to IDC at the end of 2007

For more than half of companies, projects to implement corporate financial systems turned out to be more costly than originally expected.

Project budgets exceeded when implementing financial systems

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According to IDC, 2007

83% of respondents said that having decided to update their financial business applications, they are likely to contact the same supplier, despite the cost and conditions of the projects, because they believe that the choice of suitable solutions is still not too wide.

Definitions

Different research companies refer to the markets of systems of the same class with different terms:

The term Gartner and Forrester Research is ERP (Enterprise Resource Planning).

The term IDC is ERM (Enterprise Resource Management, enterprise resource management applications).

ERP Implementation Guidelines

Market of Russia

Main article: Enterprise Management Systems (Russian ERP Market)

See also

ERP systems: concept, functions, selection and implementation features

Cloud ERP Systems

Notes