ERP systems (global market)

Different research companies denote systems markets 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).

ERP Implementation Guidelines

• ERP Implementation Guidelines
• ERP systems: concept, functions, selection and implementation features

Cloud ERP systems

• Cloud ERP systems

Russian market

Main article: Enterprise management systems (ERP-market of Russia)

2021: ERP Systems Market Reaches $50.44 Billion - Strategic Market Research

The volume of the global ERP systems market at the end of 2021 amounted to $50.44 billion, and by 2030 it will reach $117.68 billion with a CAGR of 9.87%. Such data are provided in a report by Strategic Market Research, published in September 2022.

According to analysts, the share of on-premium solutions in the ERP market is about 71%. In the industry context, the use of ERP prevails in the field of production and service, it accounts for almost 20.5%. Among the regions of the world, the largest share is occupied by North America - over 35%.

2020

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

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

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

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

The market for ERP systems at the end of 2020 grew by 4%, to $40 billion

While organizations were within budget constraints in 2020, a number of areas saw tactical and unplanned spending. For example, sales of financial management systems grew by 3% and turned into a market characterized by an amount of almost $15 billion and increased demand for cloud solutions for budgeting, planning and analytics, the Gartner report said.

Tactical purchases were most noticeable in the HCM systems market, which grew by 6% in 2020, to $18 billion. According to analysts, many companies, in anticipation of the easing of the COVID-19 coronavirus pandemic, are rapidly expanding the scale of remote recruitment, training, adaptation and measurement of engagement in addition to preparing a safe work environment.

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

It is noteworthy that 2020 was a clear demonstration of the advantages of cloud ERP systems, as the pandemic has increased the relevance of the implementation of solutions by end users. Before that, for many years, manufacturers talked about benefits such as simpler deployment, reduced IT management costs, and ongoing innovation. While these virtues of enterprise management systems do exist, the information that manufacturers tried to convey did not always have the impact that they expected under "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 by simply upgrading. Although usually updating is a less expensive and long-term process compared to implementing ERP from scratch, in fact, this is not always the best option. For example, if an organization has made significant changes to ERP, it will be difficult to upgrade the system.

Another reason why companies refuse to refine 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 ERP, the most common reason for abandoning them is a 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 cloud ERP solution providers 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 NetSuite ERP. Niche players include Acumatica and Plex Systems.

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

2018:10% market growth to $35bn - Gartner

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

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

2018 ERP Market Leaders, 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 there is still great potential for growth on it.

The largest manufacturer of such software is still SAP, which in 2018 earned about $7.7 billion on such solutions. Oracle is located with a large lag from the German company, which recorded $3.9 billion in revenues.

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

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

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

Oracle lags behind SAP in all segments. Moreover, the American corporation is also inferior to Workday in terms of the implementation of human capital management systems: the revenues of companies here in 2018 turned out to be $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 segment of software for managing the production process, Oracle does not reach Infor's performance, according to Gartner data for 2018.

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

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

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 big 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 for ERP market research at the analytical company.

She noted that the market for ERP systems is becoming wider, 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 compared to large competitors.

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

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

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

If you follow the path of the local infrastructure, then 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 just need to evaluate the operation of the ERP system.

Another thing is the virtual server. The cost of the operating system is often included in the cost of its lease. SQL server can also be rented (like many other licenses), and then, when it becomes unnecessary, refuse. You cannot do this with purchased licenses, so they often lay 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 better suited for enterprise management on an ongoing basis.

The enterprise resource planning systems market remains growing despite the uncertainty in the political and economic situation that took place in 2018.

IDC The results of 2018 confirm the rise of the global ERP market, but do 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 it includes cloud, analytical and mobile technologies, social networks and solutions) Big Data and 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 move to innovative cloud ERP solutions, according to the report.^[2]

2017: Market Leaders According to Gartner

2017 ERP Market Leaders, Gartner Data

2016: Top 10 ERP systems: SAP, Oracle and Microsoft lead

In December 2016, Panorama Consulting Solutions, a consulting company involved in the implementation of ERP systems, published a rating of the largest manufacturers of such software.

Analysts evaluated vendors by market shares, cost and duration of product implementation, return on investment and software functionality. The data was taken from Panorama's annual ratings for the period from September 2012 to February 2016. About 1,660 respondents took part in the survey. Information about the functionality of the software was obtained based on the results of evaluation of demo versions of products by Panorama customers.

The rating of the largest manufacturers of ERP systems has been compiled

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

• Infor (7,4%);
• Epicor (3,5%);
• Sage (3,5%);
• NetSuite (2,9%);
• IFS (1,5%);
• IQMS (1,2%);
• Syspro (1,1%).

The first place in terms of ROI in ERP was taken by SAP. Oracle products are leading in terms of implementation speed, and NetSuite systems, which cost customers an average of 2.8% of revenue, captured the cost of implementing the palm.

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 means of analyzing business data and optimal indicators of the time and cost of implementation, as well as ROI.

According to Panorama managing partner Eric Kimberling, Infor CloudSuite is used by some of the largest Fortune 1000 companies that previously collaborated with SAP and Oracle.^[3]

2015

Global Industry Analysts forecast: $67 billion

According to forecasts of the American company Global Industry Analysts, in 2015 the global market for ERP systems will reach $67.8 billion. Positive dynamics of the market will be ensured by increased competition in all sectors of the world economy.

The global ERP systems market is dominated by North America and Europe, the study said. Asia Pacific and Latin America remain significant market segments, with rapid growth. It is expected that the countries included in these regions will also occupy leading positions in the global ERP market in the near future.

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

• ABAS Software,
• CDC Software,
• Consona Corporation,
• Epicor Software Corporation,
• Microsoft,
• NetSuite,
• Oracle,
• QAD Inc,
• SAP SE and a number of others.

Forrester Research forecast: $50.3 billion

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

2014

AMR Research Forecast to 2020

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

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

According to AMR, by 2020, on-premise ERP-ß¿ßÔѼ٠will also have a larger market share - about 57%, while cloud ERP will show higher growth - an average of 10% during 2014-2020.

As for consumers of ERP systems, an increase in the share of the aerospace and defense industries is expected here, the growth of this category is predicted 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.

2012

Gartner Quadrant, Global ERP Systems Market

2011

IDC: ERM Market for the First Half of 2011

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

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

Above-market average growth 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 investments in ERM in Brazil, the Czech Republic, Israel, Romania, Russia and South Africa will grow. In the Asia-Pacific region, a traditionally strong rise continues with Australia, China, India and Indonesia at the head. In 2012, investments are expected to slow down, which will lead to an increase 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 to 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 architectures such as cloud computing, mobility, new social models and tools for attracting and developing services for customers, employees, suppliers, partners. These technologies, the rebuilt business models and the processes they initiate will play a vital role in driving spending on enterprise resource management solutions, "he stressed.

Only three ERM vendors were able to achieve revenues 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 the impressive revenue figures, SAP and Microsoft still managed to achieve growth rates 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 has been 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 revenues of more than $100 million. A year ago there were 16, this year the figure increased to 22. Newcomers include Deltek, SuccessFactors, Taleo, UFIDA, Ultimate Software and Visma. Among them, UFIDA achieved the most impressive indicators, 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 major 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, taking into account the market size over two years, the share of participants, as well as the forecast data for the eight functional markets that make up the ERM software market, according to the company's taxonomy.

Forrester Research ERP systems Market Outlook

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

Product subscription yields will rise as cloud ERP revenues rise 21% in the year to 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.

ERP Market Development Estimates from Gartner

According to Gartner^[5], 2011 was a positive year for most vendors in the global ERP systems market, while 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 fell on the supply of ERP systems to product-oriented companies.

Together with the growth of the well-being of vendors in the global ERP market, M&A activity resumed, although the previous few years it was concentrated mainly in the HCM (human capital management) sector. Among the largest transactions are 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 medium-sized companies, optimizing user interfaces, mobile access to ERP systems, Internet browsing to SaaS and cloud ERP solutions.

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

Product-oriented companies in Gartner terminology include both production companies of various industries, the ultimate goal of which is the production of any product, and distribution companies that are engaged in the purchase, and then re-company and sales, as well as delivery of products. As for the scale of the business, it varies from 10 employees in the state to entering the Global 2000 list and 10 thousand employees, while the company's revenue ranges from $50 million to $1 billion.

Typically, such companies have limited IT resources and choose ERP systems primarily by total cost of ownership (TCO). However, questions 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 $600 million, market share - about 50%).

Magic square ERP systems
for mid-size product-oriented companies

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 are also highlighted on the market, which are placed in the square of challengers. Niche solutions include QAD Enterprise Application, Lawson M3 ERP Enterprise, Sage ERP X3, Infor 10 ERP Enterprise. The Epicor ERP solution is classified as a visionary frame.

Panorama on the largest ERP providers

Panorama Consulting Group published another study of leading ERP landlords under the intriguing title "Clash of the Titans." In a similar study in 2010, a detailed comparison of companies SAP and, and in Oracle 2011, solutions of the line were also included in it. Microsoft Dynamics

The study analyzed 1.8 thousand implementations in different strange worlds over the past 6 years. Some conclusions turned out to be identical to those of previous years.

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

However, if Oracle's solutions are shortlisted, then the likelihood that the company will still make a choice in favor of Oracle is highest against the background of competing solutions (22%).

In general, the implementation of an ERP system in most cases turns out to be much longer-term and expensive than companies initially assume. At the same time, business expectations from implementations are sharply at odds with objective reality.

As for the unexpected findings of the study, for example, this year it was found that Oracle customer satisfaction is highest - 80%. Moreover, the indicators of the closest competitors are 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 shortest payback and return on investment: 84% of organizations using line systems fit into the 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 recognized as the most expensive in terms of further operation.

Projects on SAP have the lowest overspend (8% of the budget), in second place - Microsoft (14%), in third - Oracle (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 correctly.

Perhaps the most interesting conclusion is the 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, by contrast, has the shortest average implementation period (11 months) and customer satisfaction is the longest.

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

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 ERM systems markets, Brazil was named as the fastest growing market, which showed 39.3% growth in annual terms, while Australia showed an equally impressive 38.4% growth in constant currency.

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

SAP became the leading vendor in the first half of 2010, 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. The number two vendor was Oracle in the general ERM category, which traditionally has a strong practice in Financial Performance and Satigy Management Applications.

Gartner

Gartner's report on the ERP systems market for medium-sized product-oriented companies analyzes the market for global enterprise resource management and planning (ERP) systems for production companies with 100 to 999 employees, with annual sales from $50 million to $1 billion.

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

Key Market Changes Since Publication of Previous "Magic Square":

• Customers are beginning to adapt redesigned user interfaces that suggest a more role-playing and personalized concept, as well as offering collaboration tools. They are distinguished by improved ease of work, advanced 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 clients who participated in the study continue to receive ERP according to the on-premises model, but complement it with other software products according to 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 to implement programs to improve the partner channel, offering deeper skills and certification.
• Despite the general decline in the ERP market by 6%, nothing happened to key vendors that would shake their market positions. None of the key players left the market and were acquired by competitors. Cash flows from existing customers have created a kind of airbag for vendors.

Aberdeen Group

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

SMB is aware that a stable and efficient information infrastructure is necessary 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.

Together with the growing optimism of a global economic recovery, SMB sector companies have once again been given hope of growing profits, said Cindy Jutras, vice president of research group Aberdeen. "As a result, they must find competitive advantages that will help them control costs and ensure revenue growth not only through growing profits," she said.

In such a situation, Enterprise Resource Planning (ERP) class systems can become strategic weapons. 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 speeding up business processes. All of this allows SMBs to compete with larger businesses.

According to analysts, 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 tens of thousands to millions of dollars in savings, the researchers note.

2009

Gartner

In 2009, the ERP systems market as a whole decreased by 6% to $20.1 billion, of which 27% accounted for the system segment for medium-sized businesses, that is, about $5.3 billion. At the same time, the decrease in the volume of the segment of systems for medium-sized businesses turned out to be insignificant - 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's forecasts, the market will remain "flat," that is, despite macroeconomic improvements, its growth will be very insignificant. At the same time, 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 stable growth in the first half of the year. However, after the September bankruptcy of Lehman Brothers and subsequent events, many companies lost faith in a stable future and abruptly suspended investments and froze current projects. This trend was especially pronounced in the SMB segment, which has recently been considered the most active consumer of ERP solutions.

ERP market share in 2008 depending on annual customer revenue

In 2008, globalization and centralization were the main trends in the ERP market. Through consolidation, vendors now have the ability 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 "targeted" to specific audiences, making them more pre-configured, thus reducing implementation costs and lowering 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. European developers, including SAP, IFS, Sage Group, Agresso, Exact and Cegid (not all of them are represented in Russia), grew their business most actively in 2008. Partly, 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% for 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 in 2010 it will again increase to $27.8 billion, and by 2013 it will grow to $48.1 billion.

2008-2013 ERP Market Volume Forecasts, Billion Dollars

File:2009-07-09 d3.jpg

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

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

ERP Market Share in 2008 by Georgic Principle

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

25% of respondents said that I do not use an ERP system at all to manage my business. For comparison, according to analysts from Aberdeen, 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) replied that this could be influenced by some external reasons rather than internal problems. Thus, for 46% of respondents, 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 "sewn" into the information system can become a sufficient reason for implementing ERP.

Other reasons included the need to comply with the requirements of regulatory organizations (38%), business growth exceeding the forecasts previously made by the company (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, we mean marketing initiatives of vendors). 24% of respondents are waiting for "thunder in the clear sky," that is, some unexpected and unfavorable event that will prove them the impossibility of living without ERP. And 24% of companies indicated a sudden and "explosive" increase in activity as a decisive factor.

As the company grows and moves from the small to mid-sized business segment, many executives are beginning to feel they are losing control of their business, experts say. And the longer they wait and hope to bring back the transparency of governance without investing in IT, the more difficult it will be for their companies later and the more effort it will require.

In addition, the report revealed a trend towards increasingly full use of ERP capabilities. If we assume 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 production enterprises, these indicators are slightly higher, but differ only by a fraction of a percent.

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

At the same time, 22% of medium-sized businesses use ERP in only one of their departments/offices, 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 the Aberdeen Group, small businesses are trying to get the necessary data into the system as soon as possible and start working in it. Unfortunately, they tend to stop there without trying to use powerful software products at a more advanced level.

According to the Aberdeen study, 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 businesses (with an annual income of less than $50 million) out of 450 surveyed are satisfied with the high speed of ERP systems implementation. This desire for an early launch is due to the limited resources that can be allocated to IT.

Eric Klein, an analyst at AMR Research, believes small businesses are particularly wary of getting "bogged down" in long-running and complex implementation projects. This partially explains the low distribution rates of ERP systems among small enterprises. Over the past year, coverage of small companies by ERP systems has increased by only 3.3%, while for medium-sized companies (with annual income from $50 to $250 million) this figure has 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 quick return on investment.

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

According to Aberdeen research, only less than a third of small businesses generally calculate the return on investment from the implementation of their ERP systems. In fact, really successful implementations can only be seen in small businesses that care about indicators such as ROI and cost reduction.

2007

IDC

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

Three critical goals for implementing corporate financial systems

According to IDC, 2007

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

Planned Investments for Financial Business Applications

over the next 12 months

File:2008-04-02 d2.jpg

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 was initially assumed.

Project budgets exceeded when implementing financial systems

File:2008-04-02 d3.jpg

According to IDC, 2007

83% of respondents said that by deciding to update their financial business applications, they are likely to turn to 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.

Notes