Enterprise Management Systems (ERP) Market of Russia

• Enterprise Software (Russian Market)

2023

TAdviser: Russian ERP systems market shrank, but prepared for growth

Departure of Western vendors and the beginning of mass import substitution

In 2022, the Russian market for ERP solutions, like the IT market as a whole, underwent rapid and large-scale changes. If earlier a significant share was occupied by foreign vendors, then with their departure the situation began to change dramatically. On the one hand, a significant segment of the market collapsed, on the other, migration from Western systems to Russian ones began. We can say that 2022 has become a springboard for the development of Russian ERP systems. Circumstances contributed to the transition of companies to domestic solutions, thanks to which the demand for them began to grow.

Since the second quarter of 2022, payments have ceased in the interests of foreign players SAP, Oracle, Microsoft. Formally, this means that about half of the volume did not reach these vendors, remained at the disposal of customers and\or was redistributed. At the same time, we note a significant increase in interest in Russian products since the spring of 2022. Not all customers then approached the decision to rearrange their systems, but many began to analyze possible scenarios, "said Vladimir Tarasenko, Commercial Director of Consyst Business Group (TURBO).

The ERP systems market coped with the challenges of 2022 with dignity. And the key factor was the growth of demand from customers. The dynamics of changes was rather avalanche-like. Business and the IT industry have forged engagement, although as in other areas, there has been some initial confusion. Domestic companies sought to preserve functional processes and choose an alternative to replace the departed technologies and software, - comments Roman Sadrislamov, Head of 1C at Develonika (Softline Group of Companies).

The unstable political and economic situation, the sanctions could not but affect the ERP market - large businesses faced the threat of losing access to corporate IT systems and data, and therefore began to look for a replacement for Western software. One of the first to go this way was the subsidiaries of Western holdings operating in Russia. Many of them had to separate from the parent companies, which also meant disconnecting the head offices from the IT infrastructure. In order to prevent the shutdown of operating activities, companies began to implement Russian ERP systems in an emergency mode.

The main risks to the business at that time were the impossibility of expanding the current licenses by users and functionality, as well as the lack of vendor support.

Projects to replace imported software started only where enterprises disconnected from cloud services or the ERP system was physically on servers in other countries. Most ERP projects were frozen, due to the very unstable situation in the country, - said Dmitry Vasiliev, director of ERP solutions development at IBS.

In other situations, the business made a decision to switch to domestic systems based on whether there are real risks of disconnecting from the current software. Some companies chose to keep Western products in their IT landscape, while exploring the possibility of a partial or complete transition to Russian counterparts.

According to Vladimir Tarasenko, there were several reasons to postpone the start of projects:

1. Complexity. ERP is most often the core of the enterprise information system, which is difficult to change.
2. Everything is still working. Without the support of foreign vendors, there are more risks, but at the same time the cost of a potential project forces the decision to start to be postponed as much as possible.
3. Everyone cares about the continuity of production and technological processes, so everyone focused on the equipment and software of the level of technological processes - PCS, PLM, MES, CAD\CAM.

Those commercial companies that could remain on old systems chose this option and their majority. State, on the contrary, began to actively consider the transition to domestic products, - says the head of the Dmitry Nikulin department of automation systems of the company's enterprises (NORBIT part of the LANIT group).

For the public sector, import substitution is mandatory: the regulator has established a ban on the use of foreign software at critical information infrastructure facilities since 2025. State corporations often used SAP, and now they are introducing its replacement. In 2022-2023, a large number of large projects started in the public sector for the transition to the ″ 1C platform, ″ confirms Anton Kolosov, commercial director of the ERP KORUS Consulting department group.

Experts note that on the one hand, the departure of SAP, Oracle and Microsoft very seriously changed the plans previously adopted by the business to implement and develop these systems, which entailed negative consequences for the domestic ERP market in terms of market volume and dynamics. On the other hand, an unambiguous domestic ERP leader was formed - 1C.

Among the growth drivers, I note the import substitution policy and business investment in projects for the introduction of domestic ERP solutions, which are developing at a faster pace and are competitive in comparison with Western ERP solutions. The Government also had tangible and effective support for IT companies, specialists and customers of IT systems, - said Alexander Pryamonosov, CEO, co-founder of the 1C integrator WiseAdvice-IT.

By the end of 2022, most customers had formed updated IT development programs and the projects started again.

We are seeing a steady demand for integrator services. First of all, thanks to import substitution. Also, among the positive factors, it is planned to withdraw the outdated solution from support in 2026, 1S:UPP says Vladimir Malakh, managing partner of the FTO.

The largest market participants

The rating of Russian IT companies by revenue from the implementation of ERP projects in 2022 gathered 36 participants. Most of the companies belong to integrators of ERP systems. The rating does not contain such large Russian vendors as 1C and Galactica, since they did not provide TAdviser with data on the results of their activities in the ERP direction for the study period.

The leader of the rating was the company 1C-Rarus"." Its revenue in the ERP direction increased by 11.9% and reached 4.3 billion rubles. The second line of the company TerraLink"." Its revenue from the implementation of ERP projects approached 4.2 billion rubles, the dynamics amounted to + 158.4%. The leader of the last Borlas Group rating at the end of 2022 took 3rd position, reducing ERP revenue by a third.

The top 10 participants in the Russian ERP market can be found in the infographic below. The full rating is posted in a separate material.

Growth Drivers and Obstacles

In 2023, import substitution continued to affect the market, but the nature of demand still changed. If in 2022 it was chaotic - companies urgently introduced Russian software in order to preserve their business, then in 2023 customers began to take a more balanced approach to planning and implementing IT projects. The implementation of projects to ensure the stable operation of the business in conditions of turbulence naturally develops into development projects: closing the issues of automation of key operations, customers begin to expand functionality.

But the transition from imported ERPs to domestic ones is not as fast as expected, it is constrained by both inertia and companies' uncertainty about the capabilities of domestic products. There are not many fully completed transition projects yet.

Activity resumed, which in 2022 were temporarily frozen or faded into the background - projects aimed at business development, increasing the level and quality of automation. More transitions from "1S:UPP" to more modern vendor products have become noticeable. According to experts, in 10 months of 2023, sales of 1C ERP solutions increased by one and a half times.

1C continues to increase its share in the Russian market and, while there are no strong competitors, growth will continue. Its pace is negatively affected by the fact that standard solutions are not always necessary for business, or contain outdated processes that do not fit modern realities. For example, the lack of necessary integrations. This requires the involvement of developers. Expanding the list of products and support opportunities for an increased customer base will take time, "said Svetlana Kuznetsova, head of web development at IT company SimbirSoft.

Smaller market participants are also developing. With their help, they usually replace the narrow products of foreign vendors, for example, in the financial sector. Smaller players have the potential for development as an alternative to "1C" and the products of departed vendors, and can occupy those niches that are not yet occupied by "1C."

Three main factors restrain the market: technological barriers, lack of specialists and the need to form implementation teams, as well as the cost of projects.

Despite the fact that Russian software at the price of licenses is usually cheaper than Western, when introducing systems, the costs associated with adaptation and functionality improvements cannot be avoided. Taking into account the shortage of teams and the growth of rates, the import substitution project can cost a large enterprise tens or hundreds of millions of rubles. When there is no choice and external circumstances are pressing, companies make these investments, but you need to understand that these can be borrowed funds or a significant part of profits, "says Anton Kolosov, commercial director of the ERP department group" KORUS Consulting. "

The requirements for ERP systems on the part of customers have increased - they more carefully consider and choose solutions presented on the Russian market.

There is a feeling that customers expect a minimum number of improvements. Industry specifics matter to them. For example, you can work with local light industry production or on a large shipyard automation project. In both situations, we are talking about business process management, but the scale of migration and implementation will differ significantly. One thing is clear for sure: a business of any level today needs a reliable IT product from ERP systems available on the Russian market, - notes Roman Sadrislamov, Head of 1C at Develonika (Softline Group of Companies).

The cost of specialists who have the necessary competencies has also increased. A common problem for all market players in 2023 is the lack of a sufficient number of qualified specialists, primarily architects and implementers, who not only have technical expertise, but also have real practice working on large-scale ERP deployment projects.

In order to simplify the migration process, you need experience in project management, as well as an understanding of the methodology and sequence of implementation of specific functional components. The need to look for and train such employees is one of the most important challenges for the entire industry in 2023-2024, says Mikhail Ponomarev, head of the ERP division of the Navicon system integrator.

Compared to last year, the situation with personnel has become even more difficult, it is necessary to increase efforts in terms of hiring and retention. Wage growth in the industry is significantly ahead of inflation and is at least 20% compared to last year. A number of projects for the transition from Western systems in large companies have been announced, which will lead to additional demand for specialists, - comments Vladimir Malakh, managing partner of the FTO.

Nevertheless, according to Mikhail Aksenov, operating director of the National Platform company, the market has nevertheless adapted to the changes that took place in 2022. Large enterprises that continue to work on ERP systems of vendors such as SAP and Oracle have formed schemes for working under sanctions. But it is risky to develop large systems built on Western products. And no one can predict the scale of the increase in these risks and sanctions in the near future. Therefore, few people are ready to invest billions of rubles in the development of such systems.

Those who work on imported software learned to work with it in the absence of vendor support, but there were no significant changes in 2023. Several large import substitution programs have started in state corporations, but so far this is not a trend, most companies are still dragging on making decisions, "says Dmitry Vasiliev, director of ERP solutions development at IBS.

Waiting for the completion of the first import substitution projects in the corporate sector is another factor restraining the market. Among the problems, one can also note the need to get users used to a different way of solving business problems in domestic systems compared to foreign ones and a lack of resources.

The share of users of foreign products is gradually decreasing, but the process will be greatly stretched and will take at least 5-7 years. However, domestic manufacturers have a real chance to get out of the shadow of global giants, and there is potential for this. Specialists remained, there are centers of competence, implementation practices have been developed. All this is already used to improve domestic ERP, - explains Dmitry Nikulin, head of the automation systems department of NORBIT enterprises (part of the LANIT group).

Russian solutions have become mature. On their basis, large-scale ERP import substitution and digitalization projects are being implemented. In my opinion, there are only a few players with the necessary technologies, partners and proven reference experience. Our TURBO ERP platform is also included in the pool of potential systems for automation of large corporate business. I am sure that in the near future new participants will not appear in this segment of the market, since the entrance threshold is too difficult and expensive, but those who are already there will cope with the challenge, - Vladimir Tarasenko, commercial director of Consyst Business Group (TURBO), is sure.

Customers can be divided into three main categories:

• companies that do not yet have ERP in its classical sense.
• companies that have already implemented or started implementing ERP based on Russian software.
• companies that have previously implemented ERP based on foreign software.

The last category, according to Arkady Karev, Vice President for Sales and Business Development of Borlas Group, provides an "unexpected" potential for growth in volumes and projects for the Russian market due to the increasing need to switch to domestic software. And if we consider that this is mainly a large business, accustomed to working with wide functionality of ERP systems, then this part of the "newly opened" potential will have a significant impact on the market dynamics.

Market size and dynamics. Company Opinions and TAdviser Estimates

In 2023, the demand for ERP systems increased, as did the number of projects and their cost. The task of the market is to create a stable strong base based on domestic technologies and own needs. And, obviously, after the transition to Russian ERP systems, a new permanent request will appear: to support these systems and integrate new capabilities.

At the same time, those companies that have adapted to new conditions and have found growth points are planning or already switching to Russian ERP systems. Conversely, those enterprises that have chosen business compression and cost reduction as adaptation will not invest in large projects such as ERP implementation.

The exception is customers who are forced to implement new software due to external factors (legal requirements, critical obsolescence of the current system, system shutdown by decision of the former parent Western company, etc.).

2023 demonstrated an increase in demand for ERP systems in many sectors of the economy. This was especially true for the decisions of ″ 1C ″, which became the undisputed leader in the ERP market, - says Alexander Pryamonosov, General Director, co-founder of the 1C integrator WiseAdvice-IT.

According to him, business still needs digitalization, therefore, with the development of technologies and the growing requirements of enterprises, the demand for ERP systems will only increase.

According to Alexei Nesterov, director of ERP solutions, 1C, the growth in sales of ERP solutions of the company will be about 50% year-on-year. The decommissioning of obsolete and imported ERP solutions will allow maintaining positive growth dynamics in 2024.

The structure of the ERP market began to change, but not as actively as some analysts predicted. The shift of business from Western vendors to Russian products in 2023 occurred at best by 5-6%. It will be possible to talk about serious changes by the end of 2024, by this time, most likely, about 15-20% will be "won" by domestic vendors, - predicts Kirill Semion, General Director of the ANO "National Competence Center for Holding Information Management Systems" (NCC ISU).

According to Vladimir Tarasenko, Commercial Director of Consyst Business Group (TURBO), in 2023 the level of certainty in customer IT strategies certainly increased. In general, an understanding of the development of the situation with technological and production processes has been formed. This contributes to decision-making in the field of operational management of production, financial, material, human resources, equipment, property, other assets, as well as the overall efficiency of enterprises, optimized by forecasting tools, planning, budgeting and consolidation, management by indicators.

{{quote 'Complex complex ERP projects are starting more and more, we as a vendor see this trend. Most likely, this will not greatly affect revenue in the ERP segment in 2023, but it will definitely be reflected in 2024, when the projects launched in 2023 will bring target systems to commercial operation, "said Vladimir Tarasenko. }}

Companies are increasingly aware of the importance of automation, data centralization, and optimization. business processes Moreover, with the advent of modern technologies, such as artificial intelligence data analytics, ERP systems will continue to develop and offer new business opportunities.

A wave of projects to replace 1S:UPP with more advanced products from the Russian vendor is also expected. Various project options are possible here - both partial transitions, when the operational loop remains in the same system, and finances are brought into a new and full-fledged transformation of the IT landscape, aimed at optimizing processes and improving business indicators.

According to preliminary estimates by TAdviser, the volume of the Russian ERP systems market in terms of license sales and vendor support in 2023 amounted to 48.5 billion rubles, slightly reduced compared to 2022. Such results were influenced by the final withdrawal from the market and the cessation of sales of ERP solutions by foreign developers, primarily SAP, which was not so long ago the leader in the field of ERP in Russia. The market did not grow, even despite a significant increase in sales of 1C ERP systems. As analysts at TAdviser expect, the market drawdown that occurred in 2022 and 2023 may be partially leveled at the end of 2024. As a result, the volume of the Russian ERP systems market (in terms of licenses and support) will be able to approach 63 billion rubles.

In 2024, high demand for 1C projects will remain. This is due to the trend for import substitution, the outcome from the Russian market of Western vendors, government programs obliging to switch to Russian software. By the end of 2024, a significant part of the projects will be completed, and we will receive the first objective results of import substitution. Within a few years, this process will acquire its complete form and the market will begin to adjust. The demand for development and support services for ″ 1C ″ solutions will grow, since all implemented systems will need to be accompanied and developed, "says Anton Kolosov, commercial director of the KORUS Consulting ERP department group.

In 2024-2025, Russian ERP solution vendors will continue the technological development of their systems and platforms. A sharp surge in import substitution projects and transitions to modern ERP systems is expected, this will greatly affect the resource component.

The market will face a colossal shortage of qualified personnel, which will lead to a delay in projects for a year or more, increasing their total cost. Therefore, there will be more serious qualification requirements for contractors, which will significantly slow down the choice of a partner and increase the deadline for making a decision on the start of the project, - said Dmitry Vasiliev, director for the development of ERP solutions at IBS.

I think that the first attempts will take place to move from the ″ imitation ″ of import substitution to pilot projects for the serious replacement of ERP systems at large enterprises. These processes are already underway, but so far they are of a ″ demonstrative ″ nature or are largely the initial stages of work in this direction, - said Mikhail Aksenov, operating director of the National Platform company.

The trend towards the development of new systems that can take on the tasks of individual blocks of large Western ERPs will continue. Experts note that more and more separate solutions for MRO management, S&OP and other business processes appear on the Russian market.

The share of projects based on Russian ERP platforms will grow. Some customers will continue to develop current systems based on Western software, taking into account the current legislative requirements and possible technological limitations. Such customers will look for integrators who have retained the competencies and team on the platforms of interest, can close the tasks not only for support, but also for the development of systems, "says Dmitry Ruchkin, Head of the GMCS Integrated Solutions Directorate.

{{quote 'I would like to expect a steady increase in the number and quality of ERP projects in 2024. The second factor is especially significant, since Russian systems will pass a good stress test with large-scale implementations. The results of this year will reflect the first projects of re-injections of foreign systems that started in 2023, and the number of such projects will multiply, if not by an order of magnitude, increase. Market growth by 20% year-on-year is perhaps a very cautious assessment of the dynamics of the ERP market, says Vladimir Tarasenko. }}

According to Dmitry Potapov, senior partner of the Digital Economy League, the task of import substitution gives a chance to lesser-known suppliers of ERP solutions to compete for market share. And in 2024, new names may well appear in this area.

It is impossible to simultaneously increase the number of experienced consultants and developers. In addition, do not forget about the general economic situation and the presence of certain economic difficulties at present, - comments Arkady Karev, Vice President for Sales and Business Development of Borlas Group.

TAdviser statistics

For 2021-2023, the TAdviser database was replenished with information about about 400 ERP projects. Most of them, namely 68.6%, were implemented on 1C solutions. The top three ERP vendors in terms of quantity also include SAP and Microsoft. The rest of the developers account for a little more than 20%.

As for the industries, over the past 3 years, according to the TAdviser database, ERP systems were most often implemented in mechanical engineering, trade and food industry companies.

In total, during the observation period since 2005, the publication systematized information about more than 10,000 ERP projects.

ANO NCC ISU: the Russian market for ERP systems grew to 90 billion rubles, domestic companies occupy 55% of it

The Russian market for ERP systems in 2023 grew to 90 billion rubles. Domestic companies occupied 55% of revenue on it. This is evidenced by the data of the ANO "National Competence Center for Holding Information Management Systems" (NCC ISU), published at the end of December 2023.

As TAdviser explained in the NCC ISU, when assessing the market, analysts included licenses and support in the calculation.

{{quote 'Domestic ERP license sales beat SAP by quantity. But their cost is really seriously different. We are talking about a significant shift in market share from buying licenses towards adaptation, migration processes, carvouts, etc. Support has grown very much. It covered the difference in the cost of licenses and gave rise. A lot of teams. A million tasks. Everyone needs to finish something, fuse, twist. Therefore, the market did not fall, but continues to grow systematically. Processes are mixed. What could have previously been considered integration is now full-fledged support, the ANO notes. }}

Experts also listed several factors contributing to the growth of sales of ERP solutions in the Russian Federation:

• changes in the political environment;
• the imposition of international sanctions;
• the implementation of the Digital Economy national project, according to which the share of domestic software purchased or rented by state corporations should be 70%.

The leader of the Russian ERP platform market is the 1C company, which in 2023 accounted for about of income among domestic manufacturers of enterprise management systems. In 2023, Russian ERP solutions increased their market share by 5%, the study notes.

It also says that the number of projects for integrated and partial import substitution of ERP in 2023 significantly increased in the public sector, state-owned companies and among the owners of critical information infrastructure (CII). This is due to the expansion of the budgets of the public sector for IT import substitution in comparison with 2022.

According to analysts at ANO NCC, by tradition, large businesses in Russia use the ERP systems of SAP and Oracle. By the end of 2023, this business took a wait-and-see attitude, realizing that you can safely work with foreign platforms for several more years, they observe how ERP import substitution is going in other organizations and the public sector, experts say.

Kirill Semion, general director of the National Competence Center for Holding Information Management Systems, stressed that the state is actively promoting the emergence of ERPs capable of solving industry problems.

2022

The share of public procurement of domestic ERP systems for the year increased from 31.4% to 84.7%

The share of public procurement of domestic financial management systems, asset management and labor resources (ERP) in the Russian Federation increased from 31.4% in 2021 to 84.7% in 2022. Such data are given in a study prepared by the ANO "Center for Competencies in Import Substitution in the Field of Information and Communication Technologies" (ANO "CKIT"). The document was published in mid-2023.

According to the statistics collected by the CKIT, in 2022, government purchases of ERP solutions in Russia reached 8.15 billion rubles against 6.9 billion rubles a year earlier. These figures, as the authors of the report explain, were obtained as a result of monitoring by ANO "CKIT" of software purchases carried out within the framework of federal law of 18.07.11 No. 223-FZ and FZ of 05.04.13 No. 44-FZ. The monitoring does not include purchases from single suppliers, which are not reflected in the Unified Information System in the field of procurement, however, it is estimated that 50-70% of all purchases carried out under the Federal Law of 18.07.11 No. 223-FZ and Federal Law of 05.04.13 No. 44-FZ. The monitoring does not take into account the costs of technical support and services related to the adaptation and modification of software, as well as R&D costs.

2022 was marked by an important collective victory for Russian developers: since the launch of system measures aimed at import substitution of software in 2015, purchases of Russian solutions in terms of volume have exceeded 54% of all software purchases, exceeding purchases of foreign software in the ratio of 2:1, "said CKIT Director Ilya Massukh. - It is important to continue this trend and further develop the domestic software industry, prioritizing the demand, software and hardware compatibility of Russian IT products.

The tangible rise in the share of domestic ERP systems in public procurement is largely due to the departure of foreign manufacturers from the Russian market after the start of the special operation of the Russian Federation in Ukraine, as a result of which state customers were forced to strengthen the course on IT import substitution. According to Kirill Semion, head of the informatization department of Russian Railways (Russian Railways), General Director of the National Competence Center for Holding Information Management Systems, large companies, including Russian Railways, previously used foreign ERP systems, but now the companies are faced with the task of completely switching to domestic analogues, despite the fact that functional and technical difficulties are encountered with their implementation.

Alexander Dolgov, Deputy General Director for Information Technology of PJSC First Freight Company, believes that a significant loss of the Russian market with the departure of Western vendors is competence in terms of business processes.

Russian vendors focus on technology, platform, but not on business, processes or best customer practices, he added.

According to Edith Pro, the distribution of the shares of key players in the Russian ERP market in 2021 looked like this: SAP - 45%, 1C - 40%, Microsoft - 10%, Oracle - 7%, Galaxy - 5%. At the same time, some large companies work simultaneously with the solutions of foreign vendors and 1C. By 2024, the share of 1C may grow to 75%, according to Edith Pro. The rest of the market will be distributed among other Russian developers: Galactica, Parus and Compass.

As predicted in Edith Pro, due to mass demand, the cost of solutions will increase significantly. And behind it is the price of integration projects. For this reason, as well as the desire to implement solutions as quickly as possible, many companies will look for IT partners in the regions.

Results of monitoring the procurement of software for state and municipal needs as of 01.01.2023

Results of 2021, the largest ERP suppliers, the situation in 2022 - TAdviser data

Results of 2021 and the largest market participants

In 2021, the ERP market in Russia switched to fairly confident growth after the shock caused by the "antique" measures of the previous 2020. And although many restrictions continued to persist, a number of projects paused in the acute phase of the pandemic were thawed. COVID-19 for many companies has become a real challenge. Having recovered from the first shock, some leaders decided to strengthen their leading positions in the industry, for some, the pandemic case became an opportunity to take the vacated market share, and someone saw new prospects in the current situation. One way or another, decision makers understood that business development is closely related to the level of automation, and ERP as a basic system is a prerequisite for the effectiveness of operating and financial activities.

The decrease in covid restrictions caused an increase in demand for ERP systems implementation projects, especially in the second half of the year. This is due to the general increase in business activity. In the retail and B2C services segments, this was a continuation of the 2020 trend towards digitalization of processes as a way to make businesses less vulnerable to offline restrictions, "explains Alexey Severukhin, director of the project office of the IT company Lad.

According to TAdviser, the growth of the ERP market at the end of 2021 amounted to 9%. The total volume of this market in terms of licenses and support reached 67 billion rubles. Among the growth factors are the gradual adaptation of the economy to the "pandemic format," the continuation of the trend for import substitution (primarily in the public sector), unprecedented state measures to support the IT sphere (temporary exemption from income tax, lending at 3% per annum, etc.), as well as the development of domestic technologies (including in the field of software development).

The business has rebuilt from a survival strategy to a strategy of forming competitive advantages, "said Alexander Pryamonosov, CEO of WiseAdvice-IT.

One of the most important prerequisites that influenced the growth of indicators is the digitalization of enterprises as part of the industrial transition 4.0. This applies not only to ERP systems, but also to data analysis systems and other software products, - said Ilya Nabatov, production director of T1 Consulting.

In addition, in 2021, the process of transferring a number of product groups to mandatory labeling continued, recalls Rustam Suleimanov, commercial director of KomLine. By 2024, the national labeling system should cover all areas of industry.

By the end of 2020, it became clear that remote work had become a part of our life, there was a rethinking of such concepts as digitalization and automation, the need to transform approaches to work. The pandemic only spurred the digital transformation of companies, and already in 2021 we observed a stabilization and growth in demand in the ERP systems market, "adds Sergey Ginko, CEO of iCode.

In addition to the "defrosting" of projects after the pandemic, the increase in demand for ERP was facilitated by an increase in transparency and manageability of business and production, the continuation of import substitution processes and the transition from foreign ERP systems to Russian solutions, said Prof-IT Group CEO Evgeny Sudarkin. According to him, many enterprises have launched processes of digital transformation and integration with production systems, including to increase the efficiency of managing the company and reduce production costs.

Largest ERP Providers

TAdviser has prepared a new rating of ERP systems suppliers for 2021. It includes integrators and vendors of such solutions.

The leader of the rating was the Borlas Group. Its revenue from the implementation of ERP projects increased by 10.6% and reached 4.4 billion rubles. The second and third lines of the rating were also taken by integrators - these are 1C-Rarus (3.9 billion rubles, + 24.4%) and T1 Consulting (2.5 billion rubles, + 129.7%).

The top 10 participants in the Russian ERP market can be found in the infographic below. The full rating is posted in a separate material.

It should be borne in mind that the rating is prepared on the basis of a survey of companies. At the same time, the largest vendors of ERP systems represented in Russia do not disclose their revenue in the context of specific areas. This applies primarily to SAP, 1C, Microsoft and Oracle. Did not disclose this year the data on the ERP direction and the Galaxy Corporation. At the same time, approximate indicators of companies can be estimated on the basis of IDC research on the Russian market of EAS systems.

The term EAS (Enterprise Application Software software) in theory covers a broader area than ERP. And in this case, ERP is considered a subset of EAS. But in practice, the concept of ERP is often used in an expanded sense - like ERP II. In this case, the terms ERP and EAS will be essentially similar to the^[1]

Based on IDC materials, as well as other data available to TAdviser, it can be assumed that ERP/EAS revenue 1C and SAP at the end of 2021 was approximately at the same level - in the range of 26.5-28.5 billion rubles. Similar indicators of Microsoft amounted to about 4.5-5 billion rubles, Oracle - 3-3.5 billion rubles. At the end of 2021, Galaktika Corporation disclosed only total revenue, and it decreased by 30.2% to 1.57 billion rubles over the year.

In quantitative terms, the share of 1C in the Russian market is significantly more than the share of all other ERP vendors. So, according to the TAdviser database, 1C for the period from 2019 to 2022 accounted for more than 67% of all ERP projects. SAP is second (9%), Microsoft is third (7.4%).

Market situation in 2022: new pain and accelerated import substitution

In 2022, a special military operation (SVO), which began on February 24, as well as the subsequent series of anti-Russian sanctions and the almost synchronous departure of foreign vendors from Russia, had a powerful impact on the development of the ERP market. As a result, most projects on SAP and other import platforms stopped, and those implementations that were just planned had to be reconfigured by companies. Customers using Western solutions found themselves in a difficult situation - the risks of losing the stability of the IT landscape increased.

A new wave of import substitution has begun, and it is perhaps the most powerful, - notes Konstantin Smirnov, commercial director of the ERP department group of KORUS Consulting. - Today, the vast majority of Russian business is thinking about switching to domestic software in the future of five years, and some have already taken serious steps in this direction. For example, in the spring we were approached by a company using SAP. The business faced the risk of disconnection from the Western system, while soon it was necessary to submit reports. We transferred the client's operational and financial loop to 1C:ERP in a month and a half.

Vladimir Malakh, Managing Partner of FTO, states that the most serious consequence was the departure of SAP (Microsoft and Oracle also left, but their products occupied a rather small market share). In addition, many ERP systems used Microsoft SQL Server, Oracle Database as DBMS, so users may have technical difficulties due to migration to other DBMS, Vladimir Malakh notes. However, a number of domestic enterprise management systems have long been able to work with PostgreSQL, the expert reassures.

Thus, the departure of large vendors from the market and the termination of service support became drivers for launching projects for the transition to domestic ERP systems. Now customers need to choose from such systems as 1C (1C:ERP, ERP PC), Sail, Galaxy, Turbo ERP, ERP Compass and some others. Of these systems, 1C is the undisputed leader, especially in the segment of small and medium-sized businesses, but also a strong player in the segment of large companies. It is this vendor that will be the main beneficiary of the changes taking place on the market, of a truly tectonic nature.

In addition to the need for import substitution, the ERP market is strongly influenced by the restructuring of large companies adapting to new working conditions: acquisitions, divisions, remote control, etc. As a result, the need for unification of management and reporting systems is growing, Ruslan Suleimanov notes. At the same time, decisions on most migration projects from Western systems are not made quickly: in the period from six months to a year. Therefore, it will be possible to assess the speed of transition to Russian systems only in 2023, warns Evgeny Gribkov, director of the Razdolye implementation center. According to the expert, even if the imminent return of "politicized vendors" takes place, this will not help them quickly regain the trust of Russian customers.

Lost trust in Western vendors can no longer be returned, agrees Ilya Nabatov, production director of T1 Consulting. He is confident that the trend for import substitution will be long-term, especially in the state segment. In the commercial sector, it will remain in those companies where the migration process has already been launched: no one will stop it, even if Western vendors want to return to the Russian market, Nabatov said.

FTO expert Vladimir Malakh says his company has already participated in tenders to replace SAP with Russian solutions. Given the fact that about 2,000 large enterprises use SAP systems, there will be more and more such projects on the market, the specialist is sure. But migration from SAP and other Western systems will not happen quickly. A lot of time and money has been invested in these systems, and they are key for many businesses.

Probably, the process will last for several years, but it is still inevitable, "says Vladimir Malakh.

Sergey Biryukov, director of the project solutions center of Portal-Yug Company, notes that the ERP systems market is extremely conservative. Many millions of dollars have been invested in the implementation and adaptation of Western systems.

I doubt that the largest customers are ready in the current conditions for large-scale projects to re-engineer such systems. And for what? Most often, ERP systems are enterprise management systems, management accounting systems that do not change so quickly. Here, support from vendors is not particularly needed, says Biryukov.

Therefore, according to him, the process of transition of the largest customers from Western ERP systems to domestic ones can stretch for 5-10 years.

On the one hand, the need to replace systems is obvious (especially since the transition to domestic software stimulates legislative requirements). On the other hand, time and investment are needed, despite the fact that billions of rubles have already been invested in the development of previous decisions, Ilya Nabatov agrees. For this reason, many companies have focused on supporting existing software products and expect market leaders to introduce a new solution, form system configurations for corporations based on the products of Russian vendors.

As for the development of the ERP market in 2022, experts were divided into three camps here. Some interviewed experts believe that the market at best will remain at the level of 2021.

Petr Roginko, director of business development at NORBIT, says growth is unlikely to be expected in 2022. The market is stagnating due to a number of factors, including a tangible decrease in effective demand from commercial companies and an outflow of highly qualified personnel. In addition, domestic ERP systems vendors do not yet have alternative solutions that can fully meet the needs of large businesses, the expert emphasizes. The head of Prof-IT Group, Yevgeny Sudarkin, also expects the market to stagnate.

Despite the fact that the growth of projects on Russian solutions can be up to 30%, you need to understand that the volume of foreign implementations will fall to minimal values, and their contribution in monetary terms was significant. The cost of projects of SAP, Oracle and other systems could differ significantly from the cost of implementing similar functionality on domestic solutions. From the point of view of foreign software, it is the volume of services related to the support and refinement of established Western solutions that will grow, says Sudarkin.

Some experts believe that the market will not be able to avoid falling. Weighing all the positive and negative factors, the head of WiseAdvice-IT, Alexander Pryamonosov, predicts that in 2022-2023. we are waiting for a fall in the volume of the ERP systems market by 10-15%. And only in 2024-2025. the expert expects a return to the indicators of 2021. True, after 2025, the ERP market will begin to grow quite dynamically, quickly regaining the stagnation of previous years, Pryamonosov is sure. However, the largest share of respondents is optimistic and confident that, despite all the negative phenomena, the market in 2022 will grow within 10-20%.

Large organizations that planned ERP implementations did not abandon their plans, by the summer activity had recovered, clients (primarily those who used Western software) are actively negotiating, planning to purchase software and automation, says Yulia Katkova, deputy head of the commercial projects department of the implementation and consulting projects department of Gandalf. The only exceptions are small clients - with fewer than 100 users. Their activity in the ERP market has been suspended until at least 2023. According to Katkova, the worst thing after February 24 was for those who used foreign cloud solutions, they found themselves in a situation where it is impossible to extend support, and were faced with the choice of an urgent transition to domestic software. But the transition in a short time is an extreme launch of ERP systems, which carries many risks.

Customers come to us who have a business buyback by domestic investors, and who need automation, since they will soon disconnect from old accounting systems. In connection with the emergence of new customers, the general impression that the automation market on ERP solutions has grown compared to the last period, "summarizes Yulia Katkova.

Drivers and Market Barriers in 2022

The situation in 2022 includes both restraining and stimulating factors. Among the market drivers, experts include the outcome of foreign companies and, as a result, the clearing of a huge space for domestic vendors, as well as state support for the industry (including subsidizing implementation projects and investments in the development of their own software products) and the need for import substitution at a high pace. The locomotive of changes will be the public sector.

Alexey Severukhin notes that leaving the market of foreign competitors gives Russian companies the opportunity to scale, increase market share and presence. According to Sergei Ginko, the state's requirement for the mandatory use of domestic software will lead to an increase in demand both from customers and an increase in offers of such software from developers.

The key driver will be import substitution - reducing technological business risks (dependence on Western vendors), - expects Anton Kulaev, managing partner of Raitek Group of Companies. - In the field of industry there will be localization of components, products. This will entail the scaling of current companies, the construction of new production sites. This will also be the growth driver for the ERP systems market.

Veronika Gatilova, head of marketing at Dialogue IT, notes that recently there has been a turning point in the minds of many top managers who previously believed that "foreign software is always better." Due to the persistent popularization of the trend in the implementation of ERP systems by the vendor 1C , customers understand the value and need to automate accounting functions, realize that this is the basis of digital transformation.

Speaking about market barriers, the interviewed specialists highlight a shortage of personnel, general economic uncertainty, lack of budgets, limited competencies in many companies, a decrease in competition after the departure of SAP, Microsoft and other vendors.

According to Yulia Katkova, one of the key barriers is the complexity of logistics.

ERP solutions are very demanding on server resources, and the purchase of server equipment is now a difficult quest, for which not all clients are ready. Companies find different options for purchasing equipment, there are even cases of buying servers on Aliexpress, Katkova said.

Evgeny Sudarkin is worried about those cases when companies do not have budgets for the implementation of implementation and modernization projects. For many industries, the priority was to maintain the efficiency of the enterprise and equipment. IT in this case may fade into the background, warns Sudarkin. At a time when borrowed funds are still expensive, he advises looking for state support opportunities to finance projects.

There is also an increase in competition in conditions of limited budgets, which in many cases leads to dumping on the cost of the project and ultimately creates risks for the customer himself. The solution here can be the correct work with the customer, the choice of service models for the implementation of the project, allowing to reduce the one-time burden on the budget.

Due to the increased interest in the 1C platform, personnel shortages are growing in the market, experts warn. In the near future, the market will especially appreciate teams that combine expertise in both 1C and Western products, and perceive the system as a tool for solving business problems. But specialists who dealt with Western solutions will need time for retraining. Even if a hundred enterprises now simultaneously launch ERP projects, this will noticeably hit the market, Konstantin Smirnov believes.

There is a possibility that next year there will be many examples of "unheard" projects that have reached a dead end because they were organized incorrectly, warns a specialist at KORUS Consulting.

A serious limiter is that subsidiaries of Western companies did not pay for the implementation of systems before, because they used the solutions of the head office. Barriers include customers' weak faith in Russian software, as well as a lack of computing power.

Business customers often do not want to spend time drawing up functional requirements for the system and a detailed description of business processes for IT specialists, but they want to receive a fixed cost in a commercial offer, complains Veronika Gatilova. According to her, top management is not always ready to allocate sufficient time to the working group, in addition, we can talk about the immaturity of business in Russia in terms of understanding the need to work together on the project of the customer and the contractor.

Dmitry Potapov, senior partner of the Digital Economy League, believes that the key barrier is that the implemented systems have been working steadily for a long time, so there is no technological need to immediately change them to something. The second barrier is the lack of a ready-made Russian system, comparable to SAP and Oracle in terms of functionality and the ability to scale to a large number of users. The third barrier is the lack of the necessary number of consultants to switch to Russian solutions.

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Thorny path of replacing SAP with Russian software. What they came up with as part of a large-scale government initiative

In June 2022, on the initiative governments Russia of the, competence centers were created for the development of the Russian system-wide and applied (ON CDC), which is necessary to replace the used foreign analogues. One of these centers - "/" ERP- CRM is developing a comprehensive program for creating an ecosystem of vendors, integrators and customers in the field of this class of systems., Grigory Kocharov General Director of the Group IBS and Head of the Working Group at the Central Development Commission "ERP/CRM," speaking at the TAdviser SummIT conference on November 29, spoke about the work of this group in the field of ecosystem of Western ERP replacement projects.

Everyone on the market faced the same challenges, said Grigory Kocharov. Today in the country in the ERP/CRM class there is no ready-made import-substituted fully functional solution. At the same time, we have a lack of experience in creating systems that include several products from several vendors, especially if we talk about the integration of domestic products.

Customers and integrators have a completely different understanding of how to conduct such projects. And each import substitution project usually turns into a large program, within the framework of which individual projects are carried out according to different methodologies. And so far it is quite difficult to negotiate with customers in order to come to an understanding of how to do all this, stated the general director of IBS Group.

There are risks that, trying to integrate sets of domestic solutions, in a few years a huge number of different designers will be created, which will be difficult to support and almost impossible to develop, said Grigory Kocharov. Plus, there is a problem of staff shortages: in this segment it is estimated at about 10-20 thousand trained specialists.

In order to answer these challenges, a working group was created at the ERP/CRM CDC, which tried to set the task of restoring the ecosystem that has been successfully created over the past 20 years. Working with this group at IBS is seen in five directions. They are shown in the slide below, and they are already being worked on.

Grigory Kocharov stressed that this is an absolutely open program for participation: "we will be happy to see both all vendors and integrators there." Commercial training and staff development centres are also eagerly anticipated.

As for the first direction - the creation of an integrated solution that can replace the products of SAP, Oracle and others familiar to Russian customers, the first step was the development of architecture for two industries - industry and banks. As a basic product for this, the product "1C" was taken, which was "grown up" with the products of several vendors.

A laboratory was created, which is a testing center for these products. Each product module is tested in three areas: load characteristics, interface capabilities and opportunities for implementing complex business processes.

One of the problems faced in the working group when they tried to enter the market for the first time large corporate customers with products adapted for the middle market is there are difficulties in implementing complex business processes, with visualization. Therefore, now all modules pass the above checks. At the same time, end-to-end testing scenarios have been developed, and a number of the first processes have already passed through end-to-end tests.

As a result, the working group receives requirements for software manufacturers - for each specific module by its compliance or non-compliance with the needs of corporate customers. A requirement matrix was formed, but the final one for the software has yet to be formed.

In the near future, the same architecture will be created for the power, agro and oil segments.

Easy access to the laboratory is provided - any vendor can come and supply their software if they comply with certain rules set out in the declaration of partnership. And any integrator can come and help this program with organizing and testing end-to-end processes.

In the field of software developers, it is extremely important for the working group to ensure coordination between the work of distributed development centers of different vendors for the coming years. We need rules for the unity of release, release policy, requirements for information security, etc. Given that the comprehensive system will include products from 5-7 companies, I would like to see interaction between them in terms of coordinating their development centers, says Grigory Kocharov. Therefore, now the working group holds meetings with software manufacturers, at the same time forms end-to-end process chains and discusses with vendors the positioning of each of the products.

In the near future, it is planned to expand the participants from the point of view of software developers and develop requirements for software quality and testing procedures.

As for the direction of integrators, here the working group is moving towards ensuring that customers and integrators have a common understanding of how to manage such projects. The role of the customer is extremely important, said Grigory Kocharov. Draft documents have already been developed - a standard for managing the program and projects, as well as a standard for professional training and certification of management. Drafts of these documents will be forwarded to the community for discussion and adjustment to arrive at their final version.

One of the problems is a completely different understanding of the functionality and requirements of customers and integrators. The position of customers is quite simple: "I want it as on SAP, but faster and better." And the position of integrators most often sounds like the opposite: "I only have this, and we need to take it, because it will end soon." Therefore, it is necessary to gradually approach an agreed understanding of what to offer to the market in the end.

Today, all these processes are organized within the framework of the ERP/CRM CDC and industry industrial competence centers (ICCs): requirements from customers are formed, and at the same time - requirements or opportunities from the CDC.

Regarding the direction of training and development, thousands of qualified specialists are needed here. Import substitution projects are very time-consuming, especially considering that the hand on such projects is not yet very well packed. The teams that are now being formed include hundreds of specialists, sometimes several hundred each.

To date, profiles of key specialists have been developed - project managers, architects, heads of functional areas, sets of training programs have been identified. On the basis of the Innopolis University, a single operator of the entire employee training and certification system will be formed.

О TAdviser SummIT

The TAdviser SummIT conference, held on November 29, 2022, became one of the largest in the history of its holding: in total, more than 1,000 delegates attended the event. Also at the exhibition within the framework of the summit, the most extensive exhibition of IT solutions in the history of the event was presented: suppliers of products and services deployed more than 40 stands. The conference was attended by the Minister of Digital Development, Communications and Mass Media Maksut Shadayev, who answered the acute questions of the IT industry. In total, about 90 reports were presented in the plenary part and five parallel sectoral sessions.

1C told how the Russian market will be taken from SAP

Due to the departure of SAP from Russia and the increased need of Russian organizations to switch to domestic solutions, 1C is expanding its partner network, retraining SAP specialists for its technologies, and is also preparing new solutions for customers to replace some products of the German vendor. Representatives of 1C spoke about this at a business forum on October 28.

One of the areas of work is the creation of joint partnerships from SAP specialists and former SAP partners. It is due to the fact that many large customers are now considering the transition to 1C from foreign systems. These are complex clients, their services are very demanding. And 1C creates new partner enterprises from SAP specialists and former partners, to which corporate customers are accustomed, who are well aware of the corporate market and the processes of their customers.

1C has joined the ranks of new multi-vendor companies, previously engaged only in SAP and other imported systems. Due to this, it became possible to transfer the "best practices from SAP" to the "1C" platform and replenish the ecosystem with the best specialists in solutions of the German vendor. Now they need to be trained "1C," says the founder of "1C" Boris Nuraliev.

As of the end of October, joint ventures such as:

• 1C-Perspective. Formed from former top SAP managers and consultants who have a good knowledge of Western technologies and a wealth of experience in complex projects. Tasks: support of current solutions at the time of the transition, development of a transition strategy, participation of SAP experts in the implementation of projects for the transition to 1C, implementation of 1C according to the SAP methodology familiar to customers, general in a row of large projects.
• 1C-Business Transformation - consulting services in the field of business process transformation. Complex automation projects based on 1C solutions. The team led by Kirill Sidorenko was formed from former specialists of the Big Four.
• 1C-Premium - providing premium support services in the corporate market. Services for planning, project support and the operation of complex landscapes, developing customer expertise and building a model of constant interaction between customers and the vendor.

Marina Slesarenko, Deputy Director of 1C for Work with Corporate Clients, noted in a conversation with TAdviser, that the dynamics of projects on the transition from foreign to Russian ERPs is expectedly fast - "the corporate market harnesses for a long time," large enterprises have complex processes and a large number of jobs. At the same time, if earlier customers discussed mainly in the subjunctive mood that it would be necessary to switch to the Russian system, now they discuss more real projects, study approaches, form functional requirements.

1C already has very large projects, for example, a project in the Russian Post, but in general, the company now has to work more systematically with the segment of the largest customers. Such customers are accustomed to very detailed services from SAP, complex and expensive. We can say that they are spoiled for service in a good way, notes Marina Slesarenko.

1C expects that when switching to Russian ERP, SAP specialists joining the 1C ecosystem, working according to Western standards, who have industry competencies and a good knowledge of business logic and processes, will help provide these clients with the usual level of services. At the same time, services of the required level of complexity and scale - both for implementation and support - are likely to be more expensive than now the average for the 1C market.

To speed up the retraining of SAP specialists under "1C," give them the necessary technical and methodological competencies, the company organized a preferential training program for them. A system of retraining courses has been developed in various areas, introductory video courses on 1C technologies are provided to specialists free of charge.

As for new products, at the business forum on October 28, 1C announced a new solution - 1C: HR Boris Nuraliev told TAdviser that this product has already been developed for some time, but it was announced for the first time. It is intended to replace SAP SuccessFactors, an SAP solution for managing training, personnel selection, adaptation, talent acquisition, etc.

1C already has the 1C: Salary and Human Resources product. It solves complex tasks for automation of all processes - from recruitment to formation of calculation sheets. It has a lot of related functionality, not quite HR, but close to this: for example, labor protection, voluntary insurance, etc. This product will continue to develop.

"1C: HR" somewhat duplicates the functions of "1C: Salary and Human Resources," but, as the developers say, it, by analogy with SAP SuccessFactors, more covers what is called talent management.

The product is declared as a web-oriented application for use on almost any device, a tool for a recruiter, HR manager, HR director. The developers promise in it a lightweight, focused on the main design, as well as integration with a number of external platforms and interaction with recruiting sites.

On the same day, 1C spoke about the concluded strategic partnership with the Bidzaar trading platform (Bidzaar), designed for the purchase of private companies. In the 1st quarter of 2023, this site should be integrated with 1C:ERP and 1C: Holding Management in order to provide SAP customers with service to replace SAP Ariba.

SAP Ariba leaves the market, and this is a service that is supposed to replace it, "Boris Nuraliev explained at a business forum.

Bidzaar was founded in October 2019. Bidzaar Deputy General Director Mikhail Potapenko explained to TAdviser that SAP Ariba includes two large blocks - internal customer business processes related to procurement, and the second block - an interface for interaction with suppliers and bidding. Bidzaar is a supplier interface in the cloud, where a large number of suppliers gather, and where customers make their requests.

And ERP is about the internal processes of the customer, and everyone has their own. From ERP, information about the required purchase goes to the trading platform, where bidding takes place and where suppliers fight for the order, and then, when the result is obtained, it is again transferred to the customer's internal ERP system. There is already the formation of final orders, an agreement is concluded, interaction with the supplier is underway. Integration with Bidzaar from 2023 will be part of the ERP.

As of the end of October, according to Bidzaar, more than 60 thousand suppliers are present on its platform, and these are all "live suppliers," says Mikhail Potapenko.

18% of SAP users in Russia decided to abandon its use

In April, against the backdrop of a military operation, it To Ukraine SAP announced a halt in sales in, and in Russia early June it became known that the company plans to completely curtail its business in the country by the end of 2022. The SAP ecosystem is tens of thousands of consultants, architects and developers working in about 2 thousand companies. For customers, SAP solutions are the digital core of the business, and for many IT companies, the main product or specialized services on which the business is built. The prospects for the further development of SAP solutions and import substitution are of concern to many and have been actively discussed recently. In this regard, the professional portal SAPland conducted a study "Prospects for the development of SAP systems in Russia" based on a survey of those inside this ecosystem, and exclusively shared the results with. TAdviser

The survey sample included representatives of companies that use systems of different generations of SAP ERP: managers, consultants and developers. Special questionnaires were prepared for each of these three categories, but most of the questions were identical in content.

A total of 617 respondents participated in the survey, including:

• 95 managers (CIO, as well as heads of departments, SAP practices and competence centers),
• 360 consultants (including architects and business analysts),
• 109 developers.

Companies are in no hurry to abandon SAP

The managers were asked the question "Does your company plan to completely abandon the use of SAP systems in the near future?" 60% said they would continue to use SAP.

In the next 10 years, SAP will remain. There is nowhere to go: billions of rubles have been spent on this software in companies, and they will not just throw it out and rush to change something on the go, according to one of the integrators working with SAP solutions.

At the same time, 18% of respondents confirmed that their company had decided to stop using SAP systems, and 22% had not yet decided on a decision.

Among the companies that are actively working on the transition from SAP to domestic ERP are Russian Railways. On its basis, a national competence center for import substitution of ERP systems was created . Russian Railways took care of this issue long before the military operation. And in June, at the SPIEF, for example, the heads of Rosseti and Rusagro also spoke about the search for alternatives to SAP.

Current tasks

On the agenda of the SAP competence centers are the most pressing issues (in descending order): support and development of current SAP solutions, search for ways to update SAP software, as well as issues of retaining a team of SAP specialists.

The authors of the study note that among the respondents there is a significant share of companies that put the issue of replacing the used cloud services in the first place: their share is 23%. Nevertheless, in the overall standings, this issue turned out to be the least popular.

If you choose between the tasks of developing new functionality and supporting current decisions, managers tend to pay more attention to the development of new functionality.

To the question "What is the most important task for you at the moment: supporting current SAP solutions or developing new functionality?," The answers were distributed on a scale as follows:

What to switch to from SAP?

Respondents were asked "What systems do you see as an alternative/complement to SAP solutions?" (In the executive questionnaire, the question is worded as follows: "If today you had to replace SAP ERP in whole or in part with other systems, what solutions would you consider?").

The vast majority of respondents (64%) see 1C ERP as a system that can partially or completely replace SAP if necessary. 13% of responses mention other domestic systems, such as Galaxy, Sail, Turbo, Atlas, M-3, etc. And 11% of respondents say that there are currently no analogues to SAP systems on the Russian market.

Of the large companies that have recently publicly said that 1C in its current form is not fully suitable for their business scale, are the Magnit chain of stores and the aforementioned Rusagro and Rosseti.

No more than 6% of respondents will prefer their own development, including on open source platforms. And another 6% did not decide on the answer, because they were not looking for alternatives.

It is worth noting that managers and developers agreed on almost all points. The deviation is observed in consultants who prefer 1C to a greater extent (67% versus 59% for managers and developers) and less often mention their own developments (6% versus 10% for managers and developers).

Speed of transition to other systems

Regardless of the answers to the question about the availability of alternatives, respondents were asked to present the situation and assess the time required by the company to completely replace SAP systems. 58% of managers believe that a complete transition to other solutions is possible in 5-10 years.

The share of "optimists" who expect to meet the deadline of 1-3 years is quite large - 40%, but the authors of the study note that their overwhelming number is among those companies that have not yet decided to abandon SAP systems. And, on the contrary, among respondents who have already decided to abandon SAP, the prevailing opinion is that they will be able to completely replace SAP no faster than in 5-7 years (68% of respondents).

SAP licenses purchased, what to do with them?

Continuing to model hypothetical situations, managers were asked two more questions: "If your company had purchased licenses for new SAP products, what would you do with them?" and "If today SAP resumed selling new products, would you purchase them?"

42% of respondents would continue implementation projects (answers "rather yes" and "exactly yes"), no matter what, and 45% of respondents would purchase licenses if sales resume.

Further fate of the market

In answers to the question of what worries consultants and developers to a greater extent, 79% of answers fall on the following three topics:

• What next for the SAP market? (30%)
• Do I change my specialization and in what direction? (27%)
• How do I build my SAP career now? (22%)

The relevance of the third question is due to the fact that the overwhelming majority of consultants and developers (81%) believe that Russian companies in the bulk will not refuse to use SAP systems in the near future, or will partially replace individual functional blocks, and therefore the demand for specialists in this area will remain.

As for the reasons for this mood of SAP customers, they are primarily related to the idea of ​ ​ the lack of alternatives to SAP systems and the high cost of switching to other systems.

Investment in training remains relevant

Do you consider it important in the current environment to invest in the training and development of your/your employees? This question was asked to all survey participants. The overwhelming majority of respondents consider it important in the current environment to invest in training and advanced training (their own and their employees), including managers - 74%, consultants - 68% and developers - 65%. At the same time, 34% of respondents consider this issue very important, and only 4% admitted that this is not important for them.

The greatest commitment to training is seen in counselors, who were 6.7 times more likely to give positive responses than negative ones.

The most popular topics of training were (in descending order): the integration of SAP systems with other systems, the study of products of other vendors and the deepening of knowledge of the functionality already used. Relatively high scores among consultants also received topics related to setting up new SAP functionality, developing soft skills and programming on ABAP.

Unlike consultants, developers less chose soft skills and development on ABAP, but prioritized learning other programming languages ​ ​ (25%) and integrating SAP with third-party systems (23%).

In addition, consultants and developers were offered a personal question about specific courses for themselves that they would like to take at present. The answers were distributed as follows:

• 40% - topics directly related to SAP, mainly programming on ABAP, in-depth study of HANA, analytics tools, functionality of individual SAP systems, as well as the development of FIORI interfaces;
• 11% - programming and development not related to SAP. Basically, we are talking about the development of programming languages ​ ​ JS, Python, C++, C#, as well as DevOps, low code/no code;
• 10% - study of other (non-SAP) systems, the vast majority are referred to as "1C";
• 7% - System integration, most often in the context of SAP integration with other systems
• 3% - data analysis, machine learning and data science;
• 2% - IT management and project management;
• 9% - other topics; Non-IT business areas soft skills; foreign languages; blockchain;
• 17% - have not decided on the answer.

What will happen to the personnel?

Managers, consultants and developers unanimously agreed (48%) that in the near future an influx of highly qualified specialists can be expected on the market due to the shutdown of a number of projects. 27% of those surveyed, who are more common among executives, disagree with this statement.

A similar consensus can be observed in the opinion that SAP specialists will soon be massively retrained to work with other systems. 46% of respondents consider this prospect the most likely. In contrast, 30% expressed the opposite opinion, and again the leaders of such answers turned out to be more than the consultants and developers.

Nevertheless, the opposite picture in the answers to the personal question "How likely will YOU change your specialization in the near future?" 50% of respondents do not plan to change their specialization, and only 21% admitted otherwise.

As for the geography of the job search, opinions are divided. More consultants are open to job offers in other countries (47%). Similar indicators for managers and developers are noticeably lower - 31% and 38%, respectively.

2021: Russian ERP market growth forecast by 10-12%

On July 20, 2021, Edith Pro shared its forecast for the Russian ERP market in 2021.

After the pandemic, the costs of large companies for ERP began to grow rapidly, mainly due to upgrades, software updates, as well as integration with systems such as BPM, RPA and Big Data. The Edith Pro group of companies predicts the growth of the Russian ERP market by the end of 2021 by 10-12%.

In 2021, IT spending worldwide will increase by 8.4% and reach $4.1 trillion, Gartner predicts. For comparison, in 2019, the volume of the global IT market grew by only 0.5%.

The pandemic, lockdown mode and the transition to remote mode of operation forced business leaders to conduct digital transformation projects faster. A majority of big company executives surveyed by McKinsey analysts acknowledged that technology is a critical component of the business, not just a tool to improve the cost-effectiveness of the enterprise.

Moreover, the main focus is on core applications, in particular, ERP. Companies have accelerated the digitization of internal operations and supply chain management by three to four years, according to a McKinsey global survey. In a pandemic and remote work, organizations are shifting their focus to providing a more flexible environment for employees.

In addition, due to economic instability, managers are concerned about the issue of transparency of business processes. They realize that it is ERP that creates the basis for the further digitalization of large business.

In Russia, the situation is similar to global. Thus, at the end of 2020, SAP and 1C, key vendors of ERP solutions in the domestic market, took high positions in the corporate software segment in the country.

ERP systems are still the most in demand in the field of production - Russian manufacturers provide more than a third of all implementations. ERPs are also popular in segments, information technology professional financial and services, wholesale and retail. trade

Moreover, most companies have already implemented ERP in one form or another, and as of July 2021 is engaged in scaling, updating systems, migrating to clouds and replacing foreign systems with Russian software. The latest trend is related to the current import substitution policy.

In addition, many customers are trying to increase the functionality of their existing IT infrastructure without fully reinstalling it. To do this, they integrate ERP installed in the company with tools for managing business processes, robotization and big data analysis. This allows the business to save on expensive and long-term ERP systems modernization projects.

Dmitry Kichko, General Director of Edit Pro Group of Companies, believes that, despite the economic downturn, the ERP systems market will show steady growth over the next few years.

2020

IDC: Market leading players

According to IDC, in 2020, the share of the largest functional market - enterprise resource management solutions (ERM) - increased.

The leading positions in the market are occupied by SAP and 1C - in terms of the share of the domestic market for business automation software in monetary terms, the latter lags behind SAP by 3.2 percentage points. Over the year, the Russian company increased its market share, which was facilitated by the policy chosen by the state on import substitution in IT.

In general, market shares at the end of 2020 were distributed as follows:

• 42,4% — SAP
• 39.2% - "1C" (versus 36.7% in 2019)
• 7,4% — Microsoft
• 4,8% — Oracle
• 3.6% - "Galaxy"

According to the head of 1C Boris Nuraliev, the price of a license from a Russian company is much lower than that of SAP, therefore, in the number of automated jobs annually, the share of 1C exceeded 80% (as of June 2020). At the same time, 300 thousand are programmed in the 1C language. IT professionals.

TAdviser survey

Market Health Assessments

The sharp change in the economic situation associated with the Covid-19 pandemic has forced many companies to rethink development plans, including in the IT direction. Companies from different industries and segments approached this in different ways. As a result, the opinions of the experts who collected TAdviser are noticeably different.

Alexander Niznik, CEO of Novardis, notes that none of the ERP projects known to him and that began before the pandemic were stopped. On the contrary, companies took advantage of the forced lull in business to accelerate and complete projects already underway.

In addition, some companies, he said, seriously thought about how much ERP systems that work for them allow them to answer pressing business questions: quickly provide detailed analytical information for decision-making, serve as a reliable support for transforming logistics processes, for bringing new products to market, as well as for further improving the efficiency of planning processes.

Thus, in our opinion, the value of ERP solutions for business has not lost its relevance - on the contrary, it has grown in the current situation, the expert says.

Despite the pandemic and its consequences, Mikhail Ponomarev, head of the ERP division of Navicon, does not note a drop in demand for ERP solutions.

On the contrary, turbulence is a kind of driver: this is a good time to upgrade systems and implement previously conceived projects. For example, together with some customers, this year we finished automating the processes necessary for remote work - although we originally planned to work in this direction for a little longer. Other companies have integrated electronic document management with the ERP system - this year this has also become an urgent task, "he says.

Sergei Osipov, vice president of GMCS, says that in the first half of 2020, amid restrictive measures and the suspension of many businesses, a number of ERP projects were suspended or postponed. However, in the following months, the situation leveled off: businesses gradually adapted to the changed conditions and were able to resume work on the implementation or modernization of their ERP systems.

It is worth noting that by reducing the number of active IT projects or suspending large digital initiatives, some companies have shifted their focus to ERP, since this is the necessary digital foundation for corporate governance, especially in conditions of instability, he said.

Yulia Katkova, Deputy Head of Commercial Projects for Corporate Clients at Gandalf, notes the demand for ERP among large companies.

All year there was a demand, even during the season of self-isolation there were requests for implementations. Apparently, being at a remote location, companies tried to conduct research on proposals and start work to the maximum. This trend continued until the end of the year. And, most likely, in the next three years there will be only growth, - she notes.

At the same time, Andrei Filatov, General Director of SAP CIS, adds that most large enterprises in Russia currently already have ERP systems and develop and refine them in various ways.

It was such systems that helped many companies quickly rebuild in the crisis year, and someone even become more effective, he explains.

As for medium-sized businesses, experts' assessments vary here. For example, SAP CIS CEO Andrei Filatov records a clearly noticeable increase in the introduction of ERP systems in this segment, especially in the field of production and logistics. According to him, the drivers here are complex supply chains, multi-transfer production, expansion of the product range, understanding of end-to-end cost and actual costs and effective management of them.

The representative of Gandalf, Julia Katkova (Gandalf is the center of competence for 1C ERP solutions), on the contrary, notes a decrease in the activity of this segment.

Almost all medium-sized companies have suspended their interests in switching to ERP systems and postponed, at best, until early 2021. This is the segment that is as unsure as possible about the future and prefers to either simply save finances or invest them in resources with fast liquidity, says Yulia Katkova.

Market drivers

The main consumers of ERP solutions remain enterprises of the production sector and retail companies. According to Yuri Vostrikov, commercial director of Norbit (part of the Lanit group), the former continue to introduce new technologies in order to improve production efficiency and safety, the latter are adjusting their business models to the growing volume of online sales.

Evgeny Gribkov, head of the Razdolye shopping center, adds that for enterprises that work with government orders, especially when it comes to enterprises of the Russian defense industry, one of the main goals of automation is to receive operational reports on the targeted use of public funds.

Since 2014, the state has been consistently increasing the requirements for detailing such reports - first it was about the procedure for calculating costs for products, then there were special accounts for the money received and accounting for them, now this is a strict order accounting of all financial and economic operations. You cannot keep this record manually on paper or in Excel. The task of automating these accounting processes appears. Since the reporting on GOZs is comprehensive, the solution should be comprehensive - we are talking about the introduction of an ERP system, - explains Evgeny Gribkov.

For commercial enterprises, he said, there are two stimulating factors. Firstly, this is a protracted economic crisis that forces planning for the limited resources of the enterprise. Secondly, the emergence of requirements from the state on the mandatory use of state systems for marking and accounting of commodity flows according to the Mercury GIS type.

E-commerce stands out separately, growing at a staggering pace over the past few years. As well as increasing the needs of companies to reduce supply chain time, establish direct business relations with customers, improve and personalize interaction with end users.

Many companies have realized that traditional interactions with buyers are no longer working and the planning process needs to be revised. At the same time, not everyone fully understood what and how best to rebuild and came to us with these questions. Many of these projects cannot be carried out without applications and a digital kernel. This creates a new potential for the development of ERP systems, - says Andrey Filatov.

Another driver is import substitution, which provides the Russian market with new ERP projects.

Fueled by the import substitution policy, the demand for domestic ERP solutions is growing. In the period from 2018 to 2020. several players actively developed and came out in this segment with offers relevant for the market. Based on this, GMCS this year entered into partnerships with several Russian vendors offering comprehensive solutions for automation, "says Sergey Osipov.

Andrei Zhilin, project manager of the ERP systems department of FORCE - Development Center (FORCE Group FORS GROUP), adds several more drivers to the already announced import substitution. These are, in particular, the modernization and customization of existing systems, the transition to new software versions, the migration of existing systems to the cloud, integration with Big Data and BPM systems, as well as the general trend associated with the transition to remote work.

The commercial director of Norbit, Yuri Vostrikov, calls competition one of the drivers. He explains that the business is always in a competitive environment, and therefore is looking for various ways to reduce costs and optimize processes.

According to Vladimir Egorov, head of the TURBO department at Consyst Business Group, on the one hand, obvious drivers are measures to support the state, on the other hand, the pandemic has highlighted the vulnerabilities of automation, and this is also an impetus to change the ERP landscape.

Yulia Katkova among the driving factors of the market names various forms of reorganization and transformation of enterprises.

Large and strong companies buy small ones, and while there is a restructuring of processes in new organizations, it's time to immediately implement ERP systems, she says.

Market barriers

Experts attribute to the barriers of the domestic ERP market primarily the economic decline and depreciation of the ruble, low growth rates of industrial production and the real sector, as well as the saturation of the ERP systems market itself.

The head of the All-Russian Center "Razdolye" Yevgeny Gribkov adds a number of restraining factors, dividing them into external and internal. The external barrier, in his opinion, is most often the same - the lack of free funds for the introduction of a new system. The internal barriers of each enterprise are different. Among the most significant, he calls the problem of a lack of understanding of the scale of the ERP system implementation project and the problem of the lack of an understandable customer for such a project at enterprises.

What this is expressed in - the client, when he orders a project for the implementation of an ERP system, most often assumes that the finished program will solve all his internal organizational problems with some magical images itself. That is, one should only install "1C:ERP" on the computer and the computer itself will begin to take care of the accuracy and timeliness of entering data into the program, he himself will agree with computers from other departments on who should do what work, etc. But in fact, any, even the best ERP system itself is just a tool in human hands - a complex tool. If we try to use this tool without agreeing on the rules of the game, most likely we will only aggravate the organization's problems, so the previous manual work in Excel will be remembered with nostalgia, "he says.

The ERP system implementation project is a project whose success by more than 50 percent depends not on technical solutions, but on what organizational work was carried out, how the procedures for working in the system were worked out, how responsibly the employees were responsible for the study, Yevgeny Gribkov believes.

As for the absence of a customer, this problem follows from the previous one.

Quite often it is believed that we are simply introducing another IT system, something like advanced Windows, and this work can be safely entrusted to the enterprise's IT specialists, and, for example, the head of the IT department - or even a programmer - will be appointed project manager. What we have in the end - when it turns out that for the successful implementation of the ERP system it is necessary to make significant organizational changes at the enterprise, then the appointed employee does not have the necessary powers to perform this work - he cannot "put pressure" on dissenters, order, punish, motivate. And he often does not have a comprehensive understanding of the situation - he is still an IT specialist, not a director of an enterprise. In the best case, he will reduce all this to the previous state - and it turns out that they have implemented the latest ERP system, but there is no effect, "explains the expert of the Razdolye Exhibition Center.

For a successful implementation, in his opinion, you need to understand that without active constant participation in the project of the company's management at the level of the executive or general director, it is better not to enter such a project.

Even a CFO or chief accountant often does not have the necessary powers to force other directors of an enterprise to do something that do not obey him. And it turns out again - they introduced like an ERP system, and at the output they received an advanced accounting system, the expert concludes.

2019: Market's biggest players

The rating of companies by revenue from ERP projects, prepared by TAdviser at the end of 2019, included 16 participants. First of all, these are system integrators. The leader of the rating was the Borlas Group, its revenue from ERP projects at the end of 2019 increased by almost 4% and reached 2.9 billion rubles. The second line of the rating with a slight lag was taken by the company "1C-Rarus," in the third position - "Lanit." The total revenue of all participants in the rating amounted to 16.5 billion rubles.

The top 10 participants in the Russian ERP market can be found in the infographic below. The full rating is posted in a separate material.

2017. IDC: Market Size $819.27 Million (+ 29.6 %)

July 10, 2018 IDC presented the results of a study of the Russian market for software enterprise management information systems (software). ICPS According to the announced data, the volume of the Russian ISUP software market grew in US dollars in 2017 by 29.6% and amounted to $819.27 million. In ruble terms, compared to the previous year, the corporate application software market increased by 12.8%.

The market leaders are still SAP and 1C, which account for more than 80% of organizations' expenses on ISUP software. At the same time, SAP completed 2017 with the best performance in Russia over the past five years. At the end of the year, SAP revenue growth amounted to 33.2% in US dollars and 16% in ruble terms. 1C sales grew by 30% and 13.2%, respectively.

The main consumers of solutions in the field of ISUP software, according to IDC, remain enterprises of the production sector and retail companies. The former continue to introduce new technologies in order to improve efficiency and safety of production, the latter adjust their business models to the growing volume of online sales.

Enterprise Resource Management solutions are not only the largest segment of the ISUP software market, but also the most dynamic in 2017. The second fastest growing segment was the customer relationship management applications segment, while the business intelligence applications segment retained its second position in terms of sales.

The growth rate of the ISUP software market was significantly higher than analysts' expectations in 2017, largely due to the strengthening of the ruble against the US dollar, the ongoing digital transformation within large organizations, as well as the impressive growth in sales volume of SAP, which successfully adjusted its business to the current economic reality, - said IDC senior analyst Agapov Vasily. - For Russian suppliers, last year also turned out to be successful against the background of import substitution policy and ongoing automation of enterprises.

2016

TAdviser: market volume 119 billion rubles (+ 10 %)

The volume of the Russian ERP systems market (sale of licenses, implementation and maintenance services, cloud services) in 2016, according to TAdviser, grew by 10% and reached about 119 billion rubles.

In 2016, the market was dominated by projects for the modernization and replication of ERP systems. A number of participants noted the emergence of large-scale projects, the main influence of which will manifest itself in the coming years.

The forecast for 2017-2018 is positive. According to TAdviser, in 2017, market growth may reach 12-15%, i.e. increase in the amount of up to 133-137 billion rubles. At the same time, some experts - representatives of vendors and integrators of ERP systems - expect positive dynamics of up to 30%.

Roman Konovalov, CEO of ID Management Technology, agrees with TAdviser in assessing the market.

At the end of 2016, the domestic ERP market can be estimated at approximately 120 billion rubles. Analysts of our company estimate the annual growth of the market in ruble terms at 7-10%, - he said.

Yuri Vostrikov, commercial director of Norbit, estimates the market volume at 130 billion rubles. At the same time, in 2017, he expects an increase in ERP projects by at least 30%.

Sergei Petrov, a member of the board of Galactica Corporation, notes that in 2016 the growth dynamics of the Russian ERP systems market was comparable to the level of actual inflation. The main growth, in his opinion, should be expected for 2018 and subsequent years, but 2017 may well give growth from 15% to 20% due to some stabilization of the economic situation in the country and the results of the first wave of digitalization of the economy.

Artem Padeisky, director of strategic marketing at Prof-IT Group, believes that in 2016 the market grew in the range of 10-13%. At the end of 2017, according to his forecasts, growth may be 10-15%.

According to Semyon Danilov, director of the corporate solutions department, in IBS 2016 the ERP market grew by 15%, and in 2017 it is predicted to grow by 20%.

Denis Kosenkov, vice president of consulting at Columbus Russia & CIS, estimates the volume of the ERP market in 2016 at 50 billion rubles in the absence of growth.

In 2017, in terms of ERP, it is similar, in terms of related products (analytics, forecasting, etc.), in my opinion, growth can be about 10-15%, - said Kosenkov.

Dmitry Potapov, partner, director of the ERP block of AT Consulting, believes that in 2016 the market trampled on the spot.

Alexander Niznik, CEO of Novardis, gives an estimate of the growth rate of his company's business - more than 30% according to forecasts for 2017.

Ivan Fedorov, director of the ERP department of Korus Consulting Group, notes that the direction of ERP at Korus Consulting is growing faster than the industry data published by the main analytical agencies.

We feel that the number of clients has decreased, but they come with more specific and mature tasks, which ultimately leads to a larger number of projects that have begun. In the public sector and large corporations, there is clearly a tendency to import substitution, many projects were initiated only because of the change of systems to domestic analogues, he said.

Revenue of participants in the Russian ERP market

The leader of the domestic ERP systems market in 2016 is still SAP. According to TAdviser, the revenue of this company from ERP projects in Russia reached 20.8 billion rubles. Next are 1C and Microsoft with results of 14 and 3.7 billion rubles, respectively.

The top five leaders also included two Russian integrators - Borlas and IBS. Among the implementers, "Borlas" has been in first place for several years. As the president of the group Alexei Ananyin notes, it is possible to achieve growth in the mature market by expanding the product portfolio, which the company did by supplementing the Oracle line and its developments with ERP-solutions 1C, Galactica and SAP.

The full rating is posted in a separate material.

Which projects prevailed in 2016

According to market participants, in 2016, most often projects were implemented to modernize and replicate previously implemented solutions. Another popular destination is support. Market participants talk about "clean" implementations much less often.

In our opinion, the most popular projects in 2016 were projects for refinement and replication of solutions. A wave of new implementations is already coming down, and the need to switch to a new platform has not yet formed. Therefore, now a certain intermediate version of improvements and scaling of current customer solutions prevails, "explains Andrey Li, Director of Human Resources Systems at I-Teco

Ivan Fedorov, director of the ERP department of Korus Consulting Group, adds that modernization is now popular - projects aimed not just at correcting old errors in systems or optimizing processes, but at working with completely new processes and solutions - advanced supply chain management, forecasting, detailed analytics, etc.

The President Borlas"," Alexey Ananyin says that in addition to projects to refine functions and migrate to new versions, the volume of which is stable, the company's customers are striving to effectively use the information already accumulated in ERP:

There is a whole class of analytical solutions that allow you to gain additional value from already used data sets simply by deeper and more meaningful processing of them.

Also, he said, companies are interested in deeper automation. For example, in-depth planning of operating activities is in great demand.

Ekaterina Voropaeva, President of GMCS, notes that a significant part of the company's revenue in the ERP direction in 2016-2017 was technical support services. A separate line is the development and modification of information systems, including adaptation to new legislative requirements.

The latter resulted in the development of several new solutions. For example, we have released a solution for integrating ERP with IP "Vetis," because enterprises that fall under the new requirements of legislation in the field of veterinary control needed to quickly and painlessly establish the preparation of electronic veterinary accompanying documents, adds the president of Maykor-GMCS.

Dmitry Potapov, partner, director of the ERP block of AT Consulting, also believes that support and development were a priority.

I think that most of the money in the ERP market in 2016 was earned through the support and development of already implemented solutions. Of course, there were new implementation projects, but I don't think this was the main source of income, "he says.

Some market participants notice a decrease in the number of new implementations.

Roman Konovalov, CEO of ID Management Technology, speaks of a sharp drop in the need for companies to implement new ERP solutions from scratch.

Most large enterprises have already implemented and use ERP, and for SMB companies such projects are unnecessarily expensive and do not pay for themselves. Therefore, projects for supporting ERP systems, scaling (mainly horizontal expansion - connecting new branches of enterprises to the system) and their integration with external applications, for example, CRM, are popular for monitoring the work of field forces and better sales analysis. Vendors are moving in the same direction: for example, since 2016, Microsoft has been releasing ERP solutions only as business applications as part of the Dynamics 365 complex stack, "he says.

A number of experts note the tendency to automate individual business processes

A curious trend that we also noticed in 2016 is the introduction of ERP modules for managing specific production or business tasks. For example, recently we have recorded an increase in interest in automation of MR (maintenance and repair of equipment) at large enterprises with a large range of production equipment and equipment - the ID Management Technology company implemented many such projects in 2016-17, - notes Roman Konovalov, General Director of ID Management Technology.

Andrei Li from "I-Teco" says the same.

For several years, the automation of individual business processes that were not covered earlier has been actively ongoing. In terms of HR, for example, these are solutions for talent management and labor protection, - he explains.

Some respondents talk about customer requests for resuscitation of previously suspended projects in which the launch of systems into industrial operation did not take place for one reason or another. This, in particular, is mentioned by Evgeny Zavyalov, head of the financial and CPM systems department at CROC.

Nevertheless, some market participants record the predominance of projects for new implementations, including migrations from other systems.

Roman Dzvinko, Executive Director of BusinessAutomation SPC, divides most of the company's projects into 3 components:

• Migration from implemented products from SAP, Oracle and IBM to the Vizari AIS base;
• Implementation of enterprise solutions based on AIS "Visari" with a full or private transition from 1C;
• Systematization and comprehensive consulting within the framework of the company's work with the aim of comprehensive automation of enterprises from scratch.

Market drivers

The main drivers of the Russian ERP market in 2016-2017 are the ongoing import substitution process, as well as the deferred demand for projects for the implementation and modernization of systems. In addition, the market is spurred by new technologies, for example, BigData.

Import substitution

Thanks to the sanctions and harsh rhetoric of our Western partners in relation to Russia, domestic companies and states. corporations seek to abandon foreign software in favor of open solutions or solutions developed by domestic developers, - says Roman Dzvinko, executive director of SPC BusinessAutomation.

Import substitution of software for Russian state organizations is called the main driver of the ERP market in 2016 by Roman Konovalov, General Director of ID Management Technology. According to him, the support of domestic software from the state and the transition of state organizations to domestic IT solutions forces enterprises of the oil and gas, mining industry, the fuel and energy complex to think about migration from imported software to Russian-made systems. And this spurs integrators and developers to create their own solutions, for example, based on open source code.

Import substitution policy and sanctions lists stimulate the development of domestic ERP systems. Increasing competition is forcing companies to seriously think about improving efficiency, the success of ERP implementation projects is becoming a matter of survival, "says Denis Kosenkov, vice president of consulting at Columbus Russia & CIS.

Dmitry Potapov, partner, director of the ERP block of AT Consulting, is confident that the impetus for import substitution projects is given by the desire of the state to achieve digital sovereignty.

Pent-up demand for ERP implementation and lifecycle completion

Semyon Danilov, Director of the Department of Corporate Solutions, IBS calls the main driver the gradual implementation of deferred demand for projects for the implementation, transformation and deep modernization of ERP solutions.

Dmitry Potapov from AT Consulting, calls the life cycle of the ERP system another market driver.

From time to time you need to switch to a new version, which most often means a full-fledged translation. As a rule, this is 7-10 years, - he explains.

New technologies

Andrey Li, Director of Human Resources Systems at I-Teco, believes that the main driver for ERP products and the Russian ERP market is the development of new technologies in the BigData field.

Customers who want to keep up with the times and maintain a competitive advantage in their market segment should use modern storage and processing solutions, he said. This means updating your ERP systems, connecting new functions, products that will significantly improve the quality of the system, making management decisions and the benefits.

Large SAP customers are moving their ERPs to the HANA platform and gaining new capabilities in dealing with large amounts of data: building complex business models, predictive real-time analytics, he adds.

Natalya Semichastnova, Deputy General Director of Korus Consulting Group of Companies and Director of the SAP Department, also sees among the market drivers a reorientation to increase the efficiency of ERP solutions and completely new technologies that are no longer perceived as technologies of the future, but are moving into the category of tools to which the market is used to.

Transition to Micro-Service ERP Architecture

Yuri Vostrikov, commercial director of Norbit, sees the main driver as a transition to a micro-service architecture of ERP solutions and, due to this, a transition to small and not expensive projects. And this is generally consistent with the IT strategies of large customers, he said.

Corporate M&A

Dmitry Potapov, partner, director of the ERP block of AT Consulting, in addition to the drivers he has already named (import substitution and completion of the ERP life cycle), names the process of corporate M&A as the driving force of the market - transactions on mergers/acquisitions, change of ownership.

In Russia, many more industries are on the move, their enlargement is underway, the TOP-10 of players turns into TOP-5, then into TOP-3. All these movements are accompanied by the need to integrate processes and data. It's all bread for ERP consultants, "he says.

Market barriers

The main obstacles to the market are such factors as a lack of qualified specialists, distrust of Russian decisions and a reverent attitude towards data.

Shortage of specialists

In the previous 3-4 years, many integrators, given the uncertain market situation, unstable demand, did not seriously invest in the development of personnel, preferring to recruit already experienced specialists for projects.

As a result, the potential shortage of qualified implementation specialists may turn out to be a certain barrier to the rapid growth of the market in subsequent years, believes Semyon Danilov, director of the IBS corporate solutions department.

Approximately the same opinion is shared by Natalya Semichastnova from Korus Consulting:

They interfere with the development of the ERP market, mainly the difficulties associated with economic instability in the country, as well as the lack of truly professional specialists, the difficulty of finding and retaining them.

Skeptical of Russian decisions

Some experts notice a certain psychological factor that also affects the customer when choosing a vendor.

The problem is that domestic ERP systems and manufacturers are perceived quite skeptically by many customers due to their ignorance. Although, after demonstrating their capabilities, they understand that domestic solutions are often much better, - says Roman Dzvinko, executive director of SPC BusinessAutomatics.

Quivering Data Attitude

According to Dmitry Potapov from AT Consulting, the main barrier is the unwillingness of companies to part with their data.

Unlike American and European companies, Russian enterprises are reluctant to go into the clouds and to the process outsourcing model due to fears of losing the confidentiality of their data, he notes.

A similar opinion is shared by Andrey Lee, Director of Human Resources Systems at I-Teco.

The unwillingness of Russian companies to transfer their systems to the cloud remains a deterrent to the development of cloud products. Until now - even if the developer of a cloud product has the necessary certificates - this is considered unsafe due to insufficient security of data transmission channels, the risk of leaks, cyber attacks, he notes.

Lower costs

The need to reduce costs can also serve as a barrier to the development of the ERP market, says Evgeny Zavyalov, head of financial and CPM systems at CROC.

Under the slogan of economy, the customer is often forced to choose a partner who offered the minimum cost for the project, even if he does not have the necessary technologies and competencies. The procurement system works properly, and the importance of price criteria when choosing a contractor is higher than ever. This trend, however, is not new. In a number of projects, we see the results that the choice of an "inexpensive contractor" led to - the money has been spent, business goals have not been achieved, and the customer's dissatisfaction is growing, often spread to both the internal IT service and the ERP vendor, he says.

Factors and events affecting the market

Among the events that took place in 2016-2017, there are several main ones that have or will have a significant impact on the Russian ERP market in the near future.

Updating Key ERP Systems

The main vendors of the Russian ERP market have carried out large-scale updates of their systems. 1C has another version of the flagship ERP with a large number of additional functions. In addition, a new version of Microsoft's ERP has been released - Dynamics 365, fully deployed in the cloud.

This is a completely new campaign, unlike on premieses, and this will definitely have a strong impact on the market, "says Ivan Fedorov, director of the ERP department of Korus Consulting Group.

Roman Konovalov, CEO of ID Management Technology, compares the release of Microsoft Dynamics 365 with the new ideology of the "post-ERP" era: "integrating" everything with everything, "connecting ready-made modules" on demand "instead of long implementations and delivering software from the cloud to the end user."

Start of mass implementation of S4/HANA

The second important point is the start of the mass implementation of S4/HANA - the latest generation ERP solutions from SAP.

This leads to the fact that many companies are already planning steps to switch to a new version of the software, - said Alexander Niznik, CEO of Novardis.

Semyon Danilov, Director of Corporate Solutions, IBS adds that the latest generation SAP ERP system S/4HANA is based on a high-performance in-memory platform. SAP HANA This made it possible to repeatedly increase the performance of analytical and calculated tasks, up to the possibility of solving such problems in real time.

Growing interest in domestic ERPs

Another event that many market participants talk about is a noticeable increase in interest in Russian ERP-class products.

The vector for import substitution leads companies towards Russian ERPs. Products such as Mirapolis, Galaxy, 1C have recently been gaining momentum and attracting new customers to their products, competing with Western counterparts, "said Andrey Li, Director of Human Resources Systems at I-Teco.

If we talk about large corporate customers, then in 2016-2017 we noted a significant increase in interest in domestic solutions, especially in 1C systems, - adds Evgeny Zavyalov, head of financial and CPM systems at CROC.

Yuri Vostrikov, commercial director of Norbit, notes that almost all large integrators include 1C solutions in their portfolios.

Dmitry Potapov, partner, director of the ERP block of AT Consulting, knows about several large state customers who abandoned plans to implement Western systems and declared their intention to implement Russian solutions.

A new impetus to import substitution was given by the President's Address to the Federal Assembly at the end of 2016, when the IT industry was named a priority area of ​ ​ development for the first time at the state level, explains Potapov.

In addition, in his opinion, "Galactica" came out of the shadow of SAP and Oracle and declared itself as a serious player in the "major league" of corporate ERP in Russia.

Semyon Danilov, director of the IBS corporate solutions department, also sees that as part of the import substitution program, the demand for solutions based on 1C and other domestic technologies has sharply increased. At the same time, he adds that the Russian ERP market has two leaders - SAP and 1C.

Having practice in both SAP and 1C, we see that each of these products is good for different tasks, which differ primarily in organizational scale and functional coverage, "Danilov explains.

Sergei Petrov, a member of the board of Galactica Corporation, believes that he has strengthened the direction to eliminate the dependence of Russian companies on foreign information technologies by adopting the doctrine of information security.

Developing intelligent tools for ERP

In addition to the events listed above and the changes mentioned by the majority of respondents, there are several other equally important factors, but so far only individual participants in the TAdviser survey speak about them.

Thus, Roman Konovalov, CEO of ID Management Technology, in addition to the release of a new system from Microsoft, calls the development of tools for creating a "smart" business based on predictive analytics, machine learning and neural networks a key innovation that has changed the market.

ERP has historically collected gigantic amounts of business data - and the integration of systems with external data sources such as IoT sensors has only contributed to the growth of processed information. However, until recently, the data was used mainly "after the fact" in order to analyze how many and what breakdowns occurred at the enterprise, why there was a delay in the delivery of the product and who is responsible for all this. The concept of post-ERP implies that big data needs to be used not only for management, but also to predict the onset of the probability of events - we are entering the era of "predictive" ERP, he says.

According to Konovalov, in an ideal "intellectual" future, cognitive mechanisms will be built directly into ERP systems.

For example, the largest ERP provider, the global SAP Corporation, has just announced a new version of the SAP S/4HANA ERP system. The standard ERP solution has been expanded with SAP Fiori applications (helps you plan for contract expiration dates, consumer expiration dates, and other factors), SAP Predictive Analytics (predicts contract expiration right in the application and automatically updates the forecast model as soon as new inputs are received into the system), he explains.

These events, in his opinion, will determine the development of the ERP market in the next few years.

Integrators, partners of vendors, will also participate in the process of building the ERP ecosystem of the future, for example, by creating their own modules for vendor platforms and the ability to sell these modules in a cloud store, like the AppStore or Google Play, he concludes.

Approval of the Digital Economy program

Sergey Petrov, a member of the board of Galactica Corporation, a key event that will become the main driver of the development of the Russian ERP market, calls the Digital Economy of the Russian Federation program approved by order No. 1632-r.

According to him, the digitalization of the Russian economy is becoming an important source of the country's long-term economic growth, and the potential effect of its implementation for GDP by 2025 could reach from 4 to 9 trillion rubles.

An important place among the sources of GDP growth due to digitalization is occupied by: increasing the efficiency of the labor market, optimizing production and logistics operations, increasing equipment productivity, increasing the efficiency of R&D and product development. The ERP system is the link between a digital enterprise, so it must a priori have a system for automating management and accounting tasks, he notes.

How the Russian ERP market will change over the next 5 years

TAdviser learned the opinion of domestic experts of the ERP market about what will happen in this area in the next 5 years. In general, it can be noted that respondents positively assess the prospects of the market, predicting the development of current trends, without any obvious revolutionary ideas and a period of restructuring of the systems of the main vendors. However, some experts still count on the total penetration into ERP of innovative technologies, for example, neural interfaces.

We present the answers of respondents to the question "How will the Russian ERP market change over the next 5 years?"

{{quote 'author
'= Roman Dzvinko, Executive Director SPC BusinessAutomation' | In the near future, the market will strive for a tight classification into industry solutions. ERP solutions for construction, production, banks and other industries will appear, which will go into an increasing decomposition of the tasks solved within each of the implementations, because with the growth of competence and automation, companies are striving to cover an increasing number of tasks solved within one solution.

It is worth noting that the very concept of ERP in the next 5 years will be rather blurred. At the very least, the concept of ERP will be blurred towards an integrated enterprise management system, which includes a complete end-to-end integration of processes related to the management of human resources, reporting, sales, all technological processes, management of relationships with suppliers and contractors, management of related business processes, and so on.

Many companies are already striving to move from patchwork automation and complex integration to implementing a single enterprise solution. }}

The market will definitely survive the transformation, the system will decompose into directions to solve specific areas of both functional and industry segments. From a complex solution, ERP will become a modular product with a set of services, which will make it easier to read ROI. 'Sergey Petrov, Member of the Board of Galactica Corporation

{{quote 'author
'= Roman Konovalov, CEO of "ID Management Technology"' | The market is changing in two directions: in terms of management and in terms of technology itself.

From the point of view of management, the approach to organizing IT in enterprises is changing: business leaders come to the understanding that automation of tasks of individual departments and departments of the company does not ultimately lead to an increase in its efficiency. Cogs in the "clock mechanism" must spin in one direction - and this is possible only with end-to-end automation of the enterprise, when the activities of all departments are harmonized and subject to a single strategic goal of the organization. Some enterprises are already building their own comprehensive IT ecosystem, including equipment (sensors, sensors), and management, accounting and analytical systems to not only consolidate data, but also use it to improve the efficiency of existing business processes. The ERP system becomes in such an infrastructure a "digital core," the "nerve center" of business, as defined by SAP. In the end, in my opinion, Industry 5.0 awaits us, when at enterprises all devices and systems will be combined by a single network, and control of any process, at each stage of product release and implementation, at the company level, will be carried out from a single center - the "core" of the IT ecosystem.

From the point of view of technology, of course, we will see the total penetration of innovative technologies into the ERP industry. In 5-10 years, in my opinion, the ERP architecture will be completely built on neural interfaces, which will allow you to achieve system flexibility and be able to adapt them to the needs of a specific business without increasing the cost of owning an IT solution. }}

{{quote 'author
= Dmitry Potapov, partner, ERP unit director of AT Consulting | Large implementations will appear entirely on Russian solutions. All over the world, corporate systems were created and developed at the expense of government customers of their countries and the largest commercial clients. I hope that redirecting the flow of Russian money towards domestic ERP suppliers will bring their decisions to the level of market leaders.

The life cycle of the ERP system version is 7-10 years. In the next 5 years, SAP and Oracle customers in Russia will have to start projects for the transition to new versions of systems - Oracle Fusion and S/4HANA. I think that this will give another impetus for the Russian ERP market.

ERP solutions will step beyond one enterprise. Initially, ERP systems emerged as a single integrated environment for running end-to-end business processes within a single company. The future of ERP lies in expanding the coverage area to the entire chain of production cooperation, including suppliers of several levels. Instead of manually replicating orders and invoices from paper media into the system, we will move to end-to-end processes for planning and monitoring the execution of production tasks passing through several levels of contractors.

One of the participants in the end-to-end integration of ERP processes outside the company will be the state. I think that part of the company's interaction with the state, for example, tax accounting, will go into the figure within the framework of the "big ERP."

Introduction of Industry 4.0 components at enterprises: Internet of Things, machine learning, blockchain. }}

{{quote 'author
= Denis Kosenkov, vice president of consulting at Columbus Russia & CIS | Current trends will continue and intensify: the transition from accounting tasks to planning, analytics and digitalization of the main activities of companies, the further departure of solutions into the clouds and the service model. The level of maturity and exactingness of customer companies will increase. Projects to implement ERP in its pure form will be met less and less, hybrid solutions "ERP + cloud services + analytics" will become more in demand. }}

{{quote 'author
= Semyon Danilov, Director of IBS Corporate Solutions Department | Many current ERP systems were implemented in the zero years. Over the past dozen years, these systems, for the most part, have become technologically outdated. The architectural, functional and technological client improvements accumulated over the years in specific implementations of ERP systems make such systems more complex and unstable, as a result, the business is increasingly faced with the required system changes that are either impossible to implement at all, or the timing of such changes is unacceptably long.

On the other hand, manufacturers are constantly developing and improving their ERP systems, releasing new versions that are increasingly moving away from current client installations in their development. On the third hand, despite the difficult economic situation, healthy business activity in Russia as a whole is increasing. As a result, in the next 5 years we expect a large number of projects to transform ERP systems. And not just technical migrations to new software versions, which practically do not allow to get rid of the accumulated customization, but namely, transformations that will seriously transform the business processes of companies taking into account the latest technological capabilities of ERP systems. }}

{{quote 'author
= Ivan Fedorov, Director of the ERP Department of Korus Consulting GC | In my opinion, the consolidation of partners who offer services for the implementation of ERP systems will continue. However, success awaits only those who offer the market new solutions - such as forecasting, in-depth analytics and others. The reason is the complication of systems, architectures, constant changes in technologies - in order to get a comprehensive effective information system, a deep examination of a strong team is needed, which the solution will implement and will support and develop it.

At the same time, I believe that in five years in each industry there will be a set of solutions that must be implemented in companies that have reached a certain size. As now happens with ERP, without which the work of a large business is not possible, these are analytical CRMs, products for optimizing inventory, labor and other narrow-profile systems. }}

{{quote 'author
= Natalia Semichastnova, Deputy General Director of Korus Consulting Group and Director of SAP Department | In our opinion, the ERP market will soon develop at a very fast pace due to the transition to the cloud model. The difficult economic situation and the need to constantly improve efficiency and implement Solution SaaS that can integrate with the already installed corporate system, or allow you to build a completely cloud ERP. }}

{{quote 'author
= Artem Padeysky, Director of Strategic Marketing, Prof-IT Group |

• ERP systems will move towards SaaS cloud technology.
• Tight integration with solutions that support Big Data technology.
• Development of the concept "Digital Factory."
• Development of the concept of the "Internet of Things."

}}

{{quote 'by
= Andrey Li, Director, Human Resources at I-Teco | We predict an increase in the number of clients of Russian software, which will also push the development of domestic ERP systems themselves. Russian companies will look and develop towards the subscription service model (SaaS), as SAP now practices, for example.

In fact, Russian developers will follow the path of their Western colleagues in order to be a full-fledged competitor in the ERP product market, but to have an advantage due to Russian legislation that restrains the growth of the share of foreign software. Thus, the volumes of the local market will gradually increase. }}

{{quote 'author =
Yuri Vostrikov, commercial director of Norbit |

• We are waiting in the near future, the translation of solutions from the main vendors (MS, SAP and 1C).
• We do not observe and do not expect a trend of mass transition from one vendor to another.
• We expect an increase in the number of Western ERP solutions introduced due to reduced risks of geopolitical uncertainty, the electoral cycle in the Russian Federation and a new trend for product exports.
• We expect a decrease in the impact of the import substitution trend and the development of a new digital economy trend.
• We expect in the coming years the de-hoax of the term "Digital Economy" and the transition to real projects.

}}

{{quote 'by =
Alexander Niznik, CEO of Novardis | There will be a change in generations of ERP solutions (including forced, due to the imminent completion of the support cycle for outdated versions of solutions). Consultants must master new generation products, while those companies that miss the technological revolution to switch to in-memory solutions will leave the market. }}

IDC: Market size $632.7 million (-1.1%) and 8.8% growth in roubles

According to IDC, in 2016 the market volume decreased by 1.1% to 632.72 million dollars. At the same time, in ruble terms, the market volume grew by 8.8%. There were no changes in the top five suppliers of ISUP software, and Russian suppliers managed to slightly improve their positions. In 2016, two-thirds of the market was still accounted for by enterprise resource management and business intelligence applications.

The largest consumers of ISUP software remain enterprises of continuous production and retail trade. Their combined market share was about 44%. In 2016, discrete production was also included in the top five; agriculture, construction and mining; power.

2015

TAdviser: Market volume 108 billion rubles (+ 9 %)

The volume of the domestic ERP market (sale of licenses, implementation and maintenance services, cloud services) according to TAdviser in 2015 amounted to 108 billion rubles, an increase of about 9% over the year.

The forecast for 2016-2017 is moderately optimistic. Increased business activity, import substitution processes, as well as new legislative initiatives aimed at supporting Russian goods and services will have a positive effect on the positions of Russian developers of ERP systems.

The situation of foreign vendors will become somewhat complicated, however, no sharp changes will have to be expected in the near future. Most large customers who have already implemented foreign products will continue to use them and invest in their support and modernization.

ERP market participants assess the prospects for its development in different ways, but the overall mood is positive.

Maxim Andreev, Business Applications Director at CROC, sees subdued growth and expects results comparable to 2015 by the end of 2016 (according to the results of 2015, the company's revenue from ERP projects increased by 13%, - note TAdviser).

Vladimir Trofimov, financial director of Gandalf Group, estimates the Russian ERP market, taking into account only software sales, at 40-45 billion rubles. According to him, the market volume as a whole in 2015 increased by 10-11%, while the 1C direction in this segment increased even more - by 17%.

According to my forecast, in 2016 the ERP systems market as a whole will grow by 12-15% and in the 1C direction - by 20-30%, but the growth rate depends on 3 factors: the speed of recovery of our economy, the sequence of the import substitution rate and the readiness of firms implementing ERP systems for active development, - says Trofimov.

Alexey Deryabin, Development Director of EnergoDat, notes that in 2014, against the background of a reduction in state investment programs, the dynamics of the Russian ERP systems market in monetary terms in relation to 2013 was negative at the level of "-5%." At the same time, the volume of work practically remained at the level of 2013, that is, the cost of services was corrected. In 2015, compared to 2014, the ERP market showed positive dynamics of about 10%. In 2016, the EnergyDate expert expects market growth at 15%.

According to Dmitry Moroshkin, head of the sales department of the 1C: Franchising department of SoftBalance Group, before the 2014 crisis, the automation industry showed annual growth of 15-20%, and in 2014 and 2015 there was a decline. "Now business activity is increasing, respectively, it is possible to predict 10-15% growth in 2016," Moroshkin believes.

Oleg Sofyin, Head of Practice at BI Partner (I-Teco Group of Companies), describes 2015 as a period of decline in the decline outlined a year earlier. For 2016, the expert's forecasts are moderately optimistic: "For solutions on platform 1C, we expect a return to gradual growth."

Revenue of participants in the Russian ERP market

At the end of 2015, SAP became the leader among the participants in the domestic ERP market. The top five also included: 1C, Microsoft, Borlas and Oracle.

Most of the participants in the rating showed positive revenue dynamics. The largest growth in 2015 was recorded at Korus Consulting and Informcontact - 32.9% and 25.8%, respectively. Negative dynamics was noted in three rating companies.

The full rating is posted in a separate material.

Dependence of the Russian ERP market on currency fluctuations

In order to find out whether the Russian ERP market depends on changes in the exchange rate of foreign currencies, TAdviser interviewed Russian integrators and vendors.

Below are the respondents' answers to the question "How much does the Russian ERP market depend on currency fluctuations?"

ERP projects have two components: licenses and services. The main players recorded the cost of licenses. For example, this is what SAP did. 1C recently raised by 30-50%, but these prices will again be fixed for the coming years. Thus, the cost of licenses does not directly depend on the course. The cost of services is determined by domestic integrators, is put up in rubles, and now there is not such a situation on the market to raise prices. That is, the cost of services does not depend on the course either. It turns out that basically, our ERP market does not depend on exchange rate fluctuations. 'Oleg Saidov-Lebedinsky, Director of Pre-Project Consulting, Business Applications Department, Borlas Group '

The jump in the exchange rate led to a significant increase in the price of licenses of foreign suppliers of ERP systems. The sharp rise in the cost of projects for the implementation and development of existing foreign ERP systems makes you think about the economic effectiveness of using foreign software even the largest companies. The Russian IT market can offer such companies proven years of development in the field of ERP, which for a long time remained in the shadow of foreign software. This means that IT market players who have expertise, experience and decent experience to successfully solve production problems will receive a new impetus for development. Thus, Galactica Corporation has been engaged in import-sorting for the past 15 years. And today we are ready to go to a new level and provide import substitution. 'Dmitry Chernykh, Chairman of the Board of Galactica Corporation '

If we are talking about services for the implementation of systems, then the ERP market does not strongly depend on fluctuations in the exchange rate. If we are talking about the sale of licenses, then the dependence is significant. But it should be noted that Western vendors in one form or another recorded courses two years ago, so in 2015 the changes were not critical. ' Ivan Fedorov, Director of the ERP Department of Korus Consulting GC

Almost independent. The fact is that currency contracts for the implementation of ERP are very rare. Almost all foreign software manufacturers have switched to rubles in one form or another, and those who have not switched compensate for fluctuations in the exchange rate with discounts. ' Maxim Andreev, Business Applications Director at CROC

Sharp depreciation of the ruble against the dollar and the euro played in favor of 1C partners, because a sharp increase in the cost of licenses in ruble terms forced to revise the IT strategies of even companies with Western capital. The impact of the ongoing fluctuations to this day is difficult to assess. ' Oleg Sofyin, Practice Manager of BI Partner (I-Teco Group of Companies) '

Currency fluctuations, especially in the direction of the dollar's growth, carry several clearly traced trends. Firstly, they lead to instability in the market, and customers often become in a wait-and-see position (postpone large investment projects, including IT, reduce purchases, strive to minimize service costs). Secondly, there is a reverse process. Unstable times impose increased demands on management decisions, for the adoption of which it is necessary to quickly receive complete data on the state of the enterprise. This cannot be done without a modern automated system, because the demand for ERP is increasing. True, the requirements for the speed of implementation are also increasing. Thirdly, which is now important, the growth of the exchange rate leads to an increase in the cost of foreign programs, which is why potential users pay more attention to domestic solutions that not only fully reflect our legislation, but also significantly lower in value. ' Vladimir Trofimov, CFO of Gandalf GC '

Of course, the market depends on the cost of Western platforms and industrial databases, on which most domestic solutions are built. The trend of switching to open source software, in particular, to free database servers, is associated not so much with import substitution as with the desire to reduce the increasing costs of proprietary software. 'Alexey Ivanov, Commercial Director of Informcontact

Not much, since the cost of consulting and licenses of most vendors is considered in rubles. 'Alexey Zherikov, Microsoft Dynamics AX Department Director Norbitol"" '

The weakening of the ruble leads to an even greater gap in the cost of licenses. Accordingly, many large corporations are beginning to look at Russian software in order to reduce the cost of maintaining and scaling systems. ' Dmitry Moroshkin, Head of Sales Department "1C: Franchising" GC "SoftBalance" "

Change in demand for ERP in Russia in 2015-2016

The opinions of participants in the Russian ERP market about the demand for systems of this class in 2015-2016 were divided. A number of experts note a decrease in demand for ERP systems as a whole and the priority of companies on projects to finalize already implemented systems. Some specialists notice an increase in the demand for enterprise resource planning systems, including through the implementation of import substitution programs.

According to Dmitry Chernykh, Chairman of the Board of the Galaxy Corporation, in general, demand for ERP is falling. Many organizations today are developing in the so-called concept of digital enterprises, that is, they are more interested in systems that allow them to comprehensively automate and take control of the entire life cycle of production. For SMB companies in the current crisis conditions, ERP is definitely not a key product. At the same time, solutions are relevant for them that help to control the dynamics of income and expenses in order to remain in the plus.

In the short term, there is no need to expect significant changes in the ERP market. The SMB segment will be busy looking for new niches and sources of income to ensure its survival. Most large enterprises are using the crisis to optimize IT budgets, and are also looking for ways to refine existing IT infrastructures in order to improve efficiency, Chernykh notes.

Oleg Saidov-Lebedinsky from Borlas is sure that on the horizon of 2-3 years Russia he will not make friends with the West, so the political economic situation Russia will not change much. In this regard, sectors that benefit from this situation, such as the agricultural complex, will develop. Given that the degree of penetration of ERP there is low, they will ensure an increase in demand. The rest will live as in 2015: the demand for systems will not change, the priority will be projects for refinement and migration, the expert believes.

Alexey Nesterov, director of ERP solutions at 1C, notes that the trends in various segments of the economy are multidirectional.

It is more difficult for small and medium-sized businesses to allocate budgets for comprehensive automation projects in crisis conditions. They often implement ERP solutions in stages, primarily in the most critical areas. Big business is rethinking the use of foreign systems, increasingly paying attention to domestic products, choosing them for large-scale projects. In general, of course, the crisis forces business to pay attention to more affordable, quickly implemented fully functional domestic solutions, - said Nesterov.

According to Yuri Prikhodko, head of the Implementation and Consulting Projects Department of Gandalf Group of Companies, ERPs are no longer being implemented in order to increase capitalization or simply master money. Currently, projects are being launched to actually increase the profitability of the enterprise, and sometimes to save the business.

Demand for ERP is a kind of identifier for the development of large business. In a crisis, the demand for ERP solutions decreases, because important investment projects are curtailed, the number of companies is reduced, production is developing more slowly. If, on the contrary, big business is developing, GDP is growing, new production enterprises are opening, new products are being developed - the demand for ERP is increasing. Currently, the demand for ERP systems is not growing in number, but a qualitative approach to automation of enterprises is changing. If earlier the introduction of ERP for holdings and corporations was a "tick," today real managers - CEOs and CFOs - are involved in the implementation of these systems, says Prikhodko.

A number of experts notice the stability of demand for ERP. According to Alexei Deryabin, in 2015 the demand for ERP systems remained stable with the trend of revising development programs towards domestic software. In 2016, demand will grow due to the massive implementation of import substitution programs, he is sure.

Oleg Sofyin noticed an increase in interest in ERP systems from large businesses and corporations in 2015. In 2016, according to BI Partner's estimates, growth will be observed in all segments, including among medium and small businesses.

Korus Consulting also believes that there is demand in the market, and it is growing. Ivan Fedorov, director of the ERP department, notes that now customers more carefully count budgets, optimize costs, and conduct tenders at a price. In 2016, the trend, he said, persists.

How are the shares of domestic and foreign ERP solutions distributed in Russia? Market Participant Estimates

According to TAdviser estimates, Western ERP solutions occupy a significant market share if assessed in monetary terms. However, if we count the number of automated jobs, then the share of Russian companies and Russian solutions will prevail.

According to Oleg Saidov-Lebedinsky, director of pre-project consulting at the business applications department of the Borlas group, the corporate segment, where it is important to have a world-class system, is dominated by SAP and, and Oracle domestic systems are used limited. 1C Foreign solutions are crowded in the market of medium-sized enterprises, while domestic solutions have a share of more than 70%. A separate situation in the public sector, where domestic suppliers are now actively "entering" and, obviously, that they have priority.

Assessing the distribution of market shares between foreign and domestic decisions in monetary terms does not give a complete picture, says Dmitry Chernykh, chairman of the board of Galactica Corporation. In his opinion, if you evaluate the market by the number of customers or projects, the leadership data will be completely different.

According to our estimates, taking into account this criterion, the share of Galaktika ERP is at least 25% of the market, respectively, SAP indicators are significantly lower. For example, in 2015, SAP and 1C were undeniable market leaders, but an important point should be taken into account here. The ratings are based on the companies' revenue, but the valuation of the licenses sold is not taken into account. SAP sold only 20% of the licenses, the remaining 80% came from Russian suppliers. But due to the high cost of software and the difference in exchange rates, SAP indicators are higher, although in fact the share of Russian companies in the ERP market is gradually becoming more noticeable, says Chernykh.

According to Maxim Andreev, director of business applications at CROC, when assessing shares, it should be taken into account that the market does not have accurate data. In addition, a certain kind of manipulation of numbers is often used to show the market the direction in the parties necessary for the manufacturer.

If we take into account the number of companies where the decision is actually used, the number of specialists in the market, as well as the number of starts of new projects, 1C definitely dominates, and it dominates so that the rest of the decisions simply do not make sense to take into account. If you look at the cost of licenses sold and technical support, then the share of Western software is significant and, according to various estimates, occupies up to half of the market, - Andreev believes

Vladimir Trofimov, financial director of Gandalf Group, recalls that according to IDC, domestic developers own about 40% of the ERP market, of which 1C is the lion's share - 33%.

True, here we are talking about money. I believe that a more accurate estimate is the number of jobs automated on the basis of a particular solution. Since the cost of one workplace in the 1C program is an order of magnitude lower than in foreign counterparts, 1C accounts for about 83% of the total number of automated seats, and this figure crossed the 5 million mark last year, says a Gandalf representative.

In 1C itself, an estimate of the share of 83% (in AWS) was given for 2013, when the currency exchange rate was stable and the dollar prices of licenses of foreign vendors were stable and understandable. The company does not make similar estimates for 2014-2015 due to the fact that during this time the exchange rate has almost doubled, and some vendors at some point switched to the domestic rate. However, 1C believes that the company's share in AWS in 2015 did not decrease.

Oleg Sofyin, head of practice at BI Partner (I-Teco Group of Companies), estimates the share of domestic ERP solutions in ruble terms at 70%.

Dmitry Moroshkin, Head of Sales Department of 1C: Franchising Department of SoftBalance Group, notes the annual growth in ERP systems implementations from 1C.

According to my subjective assessment, if we estimate the market share in the number of automated jobs, then the share of Russian systems will be higher, if we talk about monetary expression - then Western. I believe that gradually the segment of Western systems will be inferior to Russian ones, - adds Moroshkin.

Market drivers

A large number of factors influence the domestic market of ERP systems. Among those that spur the development of this market, several can be distinguished. Firstly, this is a process of import substitution, which, with the help of the state, sets the direction of development. Secondly, the economic situation forcing companies to work to improve the efficiency of their activities. And thirdly - new technologies, which are still to a lesser extent, but still already have an impact on the market.

According to Dmitry Chernykh, chairman of the board of the Galactica corporation, it is the state policy in the field of import substitution that is the main driver of growth in the ERP market. This factor affects the growing interest in domestic IT development by state corporations and large companies, the expert believes.

Many enterprises were included in the sanctions lists. State corporations and enterprises of the military-industrial complex, among other things, are forced to reckon with risks in the field of information security. And in terms of financial efficiency, Russian systems, of course, are much cheaper to maintain and support. All of the above factors open the way for companies ready for modern challenges and tasks, says Dmitry Chernykh.

Maxim Andreev from CROC says that companies that fall under programs with government funding experience a significant need to restore order in planning and accounting processes, which is difficult to ensure without using ERP solutions. And since money, first of all, goes to the military-industrial complex, whose enterprises, with rare exceptions, do not have modern and effective ERP solutions, they are drivers of demand in the market.

Ivan Fedorov, Director of the ERP Department of KORUS Consulting Group, in addition to the emerging demand for cloud and mobile versions of ERP systems, as well as the import substitution process, calls the emergence of a large number of new projects in retail and production among the main growth drivers of the Russian ERP market, which, in turn, positively affects the needs for boxed ERP solutions.

Alexey Deryabin from EnergoDate identifies three main drivers of the ERP market. The first is the reorientation of the market to increase the efficiency of the used ERP solutions, the second is the import substitution trend, and the third is "new" IT technologies, which, from the category of potential and innovative, go into the status of widespread use.

Alexey Ivanov, Commercial Director of Informcontact, one of the drivers calls the growing need for companies in systems to support the management of enterprise activities, allowing them to respond to changes in real time, including operational management of labor processes.

To maintain profitability and competitiveness in the context of financial, political and personnel crises, some enterprises come to understand the need for expanded automation, but not everyone is yet ready for such changes, "explains the commercial director of Informcontact.

Dmitry Moroshkin from SoftBalance Group of Companies calls the ERP market driver the financial crisis, which, in his opinion, led to an increase in the level of concentration of firms in various industries.

Smaller companies were forced to close, and their more successful competitors got the opportunity to expand the business. The growth of the company requires an effective business management tool. Therefore, starting from mid-2015, you can observe an increase in business activity in the corporate market, which continues at the moment, - notes Moroshkin.

Yuri Prikhodko, head of the Implementation and Consulting Projects Department of Gandalf Group, agrees with the opinion that it is the crisis that is the market driver. According to him, there are enterprises that manage to increase productivity, sales and successfully build a business in the current conditions. It is important for them that the business continues to develop, and therefore the issue of effective management of basic resources is especially acute: personnel, finances, materials, suppliers, customers, etc.

If in the pre-crisis period the market allowed itself to be produced without regard to resources (with a lack of funds from the enterprise, it was possible to take a loan, with a shortage of materials - to borrow them from another company, even distributors offered payment after sales), now everything happens with 100% prepayment. This, on the one hand, pushes large corporations and private entrepreneurs to save money, and on the other hand, to rational production, says Prikhodko.

Oleg Saidov-Lebedinsky, Director for Pre-Project Consulting of the Business Applications Department of the Borlas Group, before talking about trends and drivers, suggests recalling the ERP concept, which initially implied that enterprise planning will be integrated, taking into account the maximum number of external and internal aspects. However, this concept has not been fully implemented in any software product, the representative of Borlas believes.

ERP systems, which were supposed to connect all planning factors into one, did not do this or did it piecemeal. For example, modern ERP systems do not implement joint planning of material and financial flows. This means that when planning production or procurement, factors such as advance contracts or the cost of loans are not taken into account. When planning material flows, there is no joint planning of human and production resources. For example, planning material flows may show the need to introduce a third shift to fulfill the production plan, but at the same time does not take into account the cost of training and hiring personnel, not to mention the more complex aspects of working with personnel, says Saidov-Lebedinsky.

At the same time, for Western companies living in stable conditions of bank financing, where the cost of money is low, these all factors are not so important, they can be neglected or considered according to a very simple formula, the Borlas expert believes. Therefore, today, he continues, world-class systems - SAP and Oracle - differ from the domestic 1With the wealth of functionality and the power of architecture, but they do not offer comprehensive material and financial planning.

Under Russian conditions, the influence of financial aspects on the main activity of the enterprise is so strong that sometimes it is much more important to take into account financial factors than to plan the main activity optimally. But there are no such solutions. It turns out that both world-class and 1C systems do not give the most important thing - direct automation of integrated planning processes. Therefore, "why pay more?," a representative of Borlas wonders.

In his opinion, the choice in favor of a domestic solution is justified if the enterprise does not need powerful standard functionality developed on the basis of world practices, but coverage of the main processes is enough, or the processes of the enterprise are so non-standard that the functionality of the system must be finalized in any case. In addition, it is possible to choose a Russian product if the enterprise, due to its scale (up to several thousand employees), does not face problems of scaling and productivity, Oleg Saidov-Lebedinsky believes.

Actually, this paradigm explains everything that has been happening in the Russian ERP market in recent years. Global systems have weak positions in the niche of medium-sized enterprises and could not enter the small market, since two factors mentioned above are being implemented in these segments. In the market of large corporations, domestic systems do not play by virtue of non-guaranteed scaling, plus no one in a large company will take responsibility to declare that the enterprise will not need a rich range of functionality for the future. Therefore, a jump from below breaks out into the 1C corporate market by inertia, but it is unlikely to seriously settle there. Import substitution will not change anything here at least in the medium term, - sums up the expert "Borlas."

Market barriers

The main obstacles slowing down the development of the domestic ERP market are financial. These are mainly problems associated with economic instability in the country. Among other barriers, experts call the lack of qualified personnel and frequent changes in legislation, one way or another affecting the development of companies' IT systems.

Dmitry Chernykh believes that one of the possible barriers to the development of the Russian ERP market may be significant investments aimed at maintaining and developing Western ERP systems. This is a kind of financial anchor that holds most large companies and limits their ability to switch to domestic software.

If you look at the ERP market through the eyes of customers, they are always in search of best practices, best practices. And due to the fact that the domestic IT market has developed a weak idea of ​ ​ the capabilities of Russian solutions, customers sometimes believe that Western solutions are more functional. But this is not entirely true, - notes Chernykh.

According to Maxim Andreev, the economic situation in Russia and the policy of the authorities is, on the one hand, a driver of the market, and on the other, its barrier. The general economic situation forces most companies to implement only those solutions that lead to a quick financial return, to which ERP projects are extremely rare, the expert is sure.

Oleg Sofyin from BI Partner believes that in addition to the general economic downturn, instability served as the main barrier to the implementation of complex projects to create ERP systems: the business was not ready to spend money without having confidence in the future.

Nevertheless, the management of companies understanding the role of ERP in improving business efficiency forced many to return to the topic of introducing/reengineering corporate systems after the peak of the crisis, Sofyin notes.

Ivan Fedorov also agrees that economic uncertainty affects IT budgets and new ERP implementation projects. Among other obstacles, he cites frequent changes in legislation that require increased investment in product development from both vendors and customers.

In addition to the barriers associated with the financial crisis, there are equally significant factors that hinder the development of the market. According to Yuri Prikhodko, this is the lack of professional managers who understand the goals of the enterprise and determine how to achieve these goals for themselves and employees, as well as the lack of qualified IT specialists at enterprises. "The implementation and effective use of ERP systems largely depends on them," the expert says.

Alexey Deryabin among the main barriers to the market names the reduction of investment programs in most large companies, a decrease in operating budgets in the public sector, as well as insufficient infrastructure development and an insufficient level of service quality in the Russian ERP market.

IDC: Market Size $639M (-30.6%)

On June 24, 2016, the analytical company IDC presented brief results of a study of the Russian market for software information management systems (ISUP).

According to experts, in 2015, sales of this software in Russia amounted to $639.47 million, which is 30.6% less than a year ago. In ruble terms, the market volume increased by 10.5%.

The largest sales of enterprise management systems were recorded at process production and retail enterprises, which accounted for about 40% of the market in 2015. The five largest consumers of this software also included discrete production, transport companies and power.

According to the results of 2015, two-thirds of the domestic ISUP market was occupied by applications for enterprise resource management (ERM) and business analytics.

The list of the largest manufacturers of ISUP has not changed, but the shares have been redistributed. Thus, SAP and 1C, which lead the market, have improved their positions.

SAP increased its share from 48.4% in 2014 to 48.9% in 2015,

"1C" - from 30.9% to 32.7%.

Shares of Oracle and Microsoft decreased, Oracle - from 4.9% to 4.4%, Microsoft - from 9.4% to 8.7%.

The share of "Galaxy" remained at 2.1%.

The share of other vendors decreased from 4.3% to 3.3%.

According to analysts, 2015 passed in anticipation of a ban on state purchases of foreign software, so many customers tried to implement projects before the entry into force of the relevant law.

The possible extension of this ban to companies with state participation can significantly change the situation in the market of enterprise management information systems, "says IDC Research Manager Zarina Kamytbayeva. - Domestic producers will have the opportunity to significantly strengthen their positions both in individual industries and in the market as a whole.

2014

TAdviser: Market volume 99.2 billion rubles (+ 4 %)

The volume of the Russian ERP systems market (including the sale of licenses, services for the implementation and maintenance of programs, as well as cloud services), according to the TAdviser Report, grew by 4% in 2014, amounting to 99.2 billion rubles.

The forecast for 2015-2016 is negative. Despite the weakening of the national currency, TAdviser Report expects the ERP solutions market to fall by about 20% in rubles.

The slowdown in the Russian economy will have an impact on this segment. Investment budgets in many companies for 2015 were significantly cut. A number of concluded contracts - terminated.

Also, a jump in the exchange rate of foreign currencies led to an increase in the cost of licenses for foreign systems. As a result, large-scale projects for introducing foreign ERPs for end customers have become more expensive.

The decline in oil prices and economic sanctions that have affected some industries - active ERP consumers, will primarily affect the sale of foreign solutions, the sales of which, according to TAdviser Report, may fall by 35% in 2015.

At the same time, the situation with the ruble exchange rate led to the fact that the rates of Russian consultants in foreign currency decreased, therefore, for some enterprises with foreign headquarters/accounting in foreign currency, this is a plus in favor of deciding to start projects, despite the general difficult economic situation.

"We assume that such a" decrease "in the cost of consulting services may partly mitigate the drop in sales," said Oleg Saidov-Lebedinsky, director of pre-project consulting for the Borlas group.

Another supporting factor is the increase in the number of small projects for refinement, migration, and the development of existing ERP systems. Stable demand, according to TAdviser Report observations, remains for technical support services. A good situation in these segments can reduce the overall drop in the ERP market to 20%.

"Previously implemented ERP systems require support, and every 10 years - major modernization or even conversion. Therefore, in the near future the demand for such solutions will not disappear, "says Maxim Andreev, director of business applications CROC

.

To save money and gain economic benefits, enterprises prefer small projects with short implementation times and quick returns. I.e. The market lives not so much in complex projects as in the implementation of separate modules designed to automate narrow industry tasks.

"The market

is following the path of closing individual tasks - there is a tendency to divide large projects into independent functional parts," says Olesya Lachugina, head of marketing at Galaxy Corporation.

Andrey Li, Director of Human Resources Systems at Witte Consulting (Ai-Teko Group I-Teco), also notes that customers continue to reduce costs, so the development of the segment is more likely towards cost optimization through already used solutions.

At the same time, 2015 is not yet indicative, since part of the ERP solutions was made from the 2014 budget. "But the closer the end of the year, the more concern the trend of the fall is," says Konstantin Bukhanov, CEO of Skyrise.

Mark Samoilovich, head of Sage ERP X3Gruppa Energy Consulting practice, believes that if the peak of the crisis passes in the 3rd quarter of 2015 and a good geopolitical situation, the market may expect moderate growth of 2-3%. "In other cases, it is difficult to predict, since the foreign exchange market and the market are generally very volatile, which has a great impact on the cost of foreign software and the mood of owners who are ready to invest in ERP," Samoilovich notes.

ERP Vendor Metrics

Despite slowing growth GDP Russia (+ 0.6% in 2014), the majority of developers and implementers ERP who provided TAdviser data showed more significant revenue growth: on average + 8.9% for 18 companies.

The top five in terms of revenue included Borlas, AT Consulting, GMCS, CROC and Galaxy.

The full rating is posted in a separate material.

As for the share of system integrators, expressed not in monetary terms, but in quantitative terms (by the number of implemented ERP projects in the total volume), here the absolute leadership belongs to the 1C franchisee, which is not surprising, since it is in quantitative terms 1C: Enterprise, according to TAdviser, is the most commonly used ERP platform in Russia.

TAdviser, 2015

According to the own database of TAdviser projects (more than 8 thousand ERP projects), the maximum number of implementations of systems of this class in the entire history of observations was carried out by the companies First BIT, Galaxy (engaged in the implementation of its own ERP platform), 1C-Aviant, Compass (also introduces its own system) and 1C-Rarus. Three of the five companies on this list are 1C franchisees. In 2014, 1C franchisees also headed the list of integrators by the number of ERP projects completed.

Share of suppliers

TAdviser estimates the share of suppliers in the Russian ERP systems market not by revenue, but by the number of implemented implementation projects, data on which are posted in the TAdviser Center database. As of July 2015, this is about 8.3 thousand projects, most of which were implemented in Russia (see more details on the geography of ERP projects).

It is worth saying that not all projects fall into the TAdviser database, but only those about which data are publicly presented. Projects are introduced into the database as vendors and integrators themselves, as well as TAdviser editors based on public information.

If we talk about the number of projects (the penetration of ERP platforms into the Russian market), then here, according to TAdviser estimates, 1C is the absolute leader. For example, only on the 1C platform: Enterprise 8.0 in Russia has implemented more than 11.6 thousand complex projects (when the full functionality of the platform is implemented^[2]. And this is not counting those cases when only the financial and accounting framework was introduced or only the personnel and salary blocks of functions.

In general, the division of ERP systems into blocks introduces considerable difficulties in the assessment of implementation statistics. For example, SAP ERP HCM, an automated human resources management system, belongs to the HRM category in the TAdviser database and is taken into account in the corresponding section of the database, although in essence its implementations are an installation of the SAP ERP platform, but not complete. And so on.

Nevertheless, the accumulated TAdviser statistics allow us to talk about the frequency of use of certain platforms in Russia. By July 2015, in the entire history of observations of the TAdviser Center, the most frequently implemented platforms can be called in addition to 1C: Enterprise 8.0 also Galaktika ERP, Microsoft Dynamics AX, Microsoft Dynamics NAV, SAP ERP.

On April 10, 2014 Olga Uskova , the President NAIRIT addressed a meeting State of the Commission of the Duma of the Russian Federation for the Development of Strategic Information Systems, with an expert assessment of technological risks and the degree of resistance to external influences of information systems used in strategically important areas of life. 83% of states enterprises belonging to strategically important industries use ERP systems based on foreign technology platforms and are in the area of ​ ​ increased risks of direct or delayed external impact.

IDC: $921 million (-14%) market size and 3.4% growth in roubles

In 2014, the Russian ISUP software market reduced its volume by 14.2% to 921.27 million dollars. However, in ruble terms, due to a sharp depreciation of the ruble against the dollar, the market grew by 3.4%. SAP remained the largest supplier of ISUP solutions, but the leading Russian manufacturers - 1C, Galactica and Monolit - significantly strengthened their positions in the market.

The most popular are still applications for enterprise resource management (ERM) - the share of this market segment was 44%. The growth in demand was recorded in the category of applications for customer relationship management and business analytics, which, amid the growing competition, have become especially important.

2013

TAdviser: Market volume 95.4 billion rubles

The Russian market for ERP systems (including the sale of licenses, services for the implementation and maintenance of programs, as well as cloud services) amounted to 95.4 billion rubles in 2013, according to TAdviser.

Nevertheless, TAdviser does not confirm the earlier forecasts of other research companies, according to which the Russian ERP systems market will grow by several percent per year from 2013 onwards (in 2012, IDC predicted a CAGR of 7%, according to the results of 2013 - 3.4% for the next few years).

The forecast for the Russian ERP systems market for 2014-2015 is moderately negative. A serious collapse is brewing in the global economy, supported by a difficult situation in geopolitics. The demand for ERP systems began to decline back in 2012-2013, most Russian companies that wanted to automate resource management have long done so in one volume or another. Basically, projects are being implemented to develop already implemented platforms, especially for large and medium-sized businesses.

But if, starting in the fall of 2014, the Russian economy will face more serious shocks, all such projects will be postponed indefinitely, and for 2015 the companies will lay the most modest IT budgets, so that the decline will last at least 18-24 months. According to the results of 2014, depending on the macroeconomic scenarios being implemented, the market for ERP systems in Russia will at best reach the plateau level, and at worst lose up to 5-7% of its volume. Vendors and integrators agree with this position.

An important component of the slowdown in the growth rate of the industry is also played by the fact that the transition from a state where enterprises did not have management tools at all to the fact that everyone has them in one form or another, says Dmitry Chernykh, chairman of the board of the Galactica corporation.

"Having solved the most painful problems, the companies calmed down, and therefore there is no need to wait for explosive growth here. If we talk about the general dynamics, then, of course, it is rather falling, but in our opinion, the critical point has not yet reached. The growth of our income this [2014 - approx.] Year I think will vary from 10 to 15%, "he said TAdviser

. We are confident that the market will not grow, also in the company "iT," in the company "First BIT." Among the respondents, only Epicor noted an increase in demand for IT systems. And Mikhail Aksenov, head of the consulting department of T-Systems Russia, gave the following comment:

"In total, the market is growing, but there is a sharp concentration on several suppliers."

Energy Consulting notes that even during the period of stagnation, there are always about ten percent of companies that purposefully plan implementation projects. Such companies are guided by the fact that the ERP system makes their business flexible and adaptive to any conditions. But in the general mass, favorite economic shocks always cause an outflow of investment in IT.

Market participants expect positive from the Russian ERP systems market only in narrow sectors. For example, many are confident that active implementations will continue in state structures, where, in the wake of bans on the use of foreign technologies, a wave of transition to domestic software may occur in the future for 2-3 years.

Also, the segment of cloud ERP solutions will remain a growth point, especially they will be in demand by small businesses for elementary accounting functions.

"At the same time, you need to understand that the cloud ERP market is still in the stage of finding successful ideas and the first trials and mistakes, so the growth will be hopping and, despite the high% indicators in terms of total volumes in money, small," believes Efim Fish, Director of Business Development MicrosoftDynamics AXTops Consulting (Tops Consulting) (Tops Consulting).

Integrator Performance

Despite the trend towards a decline in the Russian ERP systems in 2013, according to its results, those system integrators who provided TAdviser with data on their income showed their growth compared to 2012 at the level of 10-15% (see table below). According to TAdviser, in the future, inertia from projects already launched earlier will not actively fuel the income of implementers, so that already in 2014 the growth in revenue of such companies from the sale of licenses and services within ERP projects may decrease.

The negative trend is also evidenced by the decrease in ERP projects in the TAdviser database from year to year. In total, there were about 7.6 thousand of them in July 2014, of which 634 projects were completed in 2012, and in 2013 - only 433 (85% of projects in the database were implemented in Russia, see more details. Geography of ERP projects).

The full rating is posted in a separate material.

As for the share of system integrators, expressed not in monetary terms, but in quantitative terms (by the number of implemented ERP projects in the total volume), here the absolute leadership belongs to the 1C franchisee, which is not surprising, since it is in quantitative terms 1C: Enterprise is, according to TAdviser, the most commonly used ERP platform in Russia.

TAdviser, 2014

According to bases TAdviser's own projects, the maximum number of ERP systems implementations in the entire history of observations was carried out by companies (engaged in First BIT Galactica the implementation of its own ERP platform,, (1C-Aviant Compass also introduces its own system) and. Three of the 1C-Rarus five companies on this list are franchisees. In 1C 2013, four franchisee companies and also 1C Galactica were separately included in the top 5 integrators in terms of the number of projects.

IDC: Market size $1.07 billion (+ 5.9 %)

According to IDC - Russia Enterprise Application Software Market 2014-2018 Forecast and 2013 Vendor Shares, the market volume in 2013 grew by 5.9% compared to 2012 and exceeded $1.07 billion. SAP, 1C, Microsoft, Oracle and Galaktika Corporation continue to control most of the ISUP market in the Russian Federation.

Share of suppliers in the Russian ERP/ISUP market by sales in US dollars in 2003-2013,% (IDC data ).

Source: IDC

IDC analysts believe that along with the growth of companies seeking to optimize IT costs and use their existing capacity more efficiently, cloud solutions and highly specialized applications are beginning to gain popularity. Relatively low cost and quite advanced functionality of solutions - what is already offered to users along with rapid implementation, an easy-to-use interface and a high level of scalability.

The largest consumers of ISUP software remain enterprises of process production, wholesale and retail trade. Their combined market share was more than 40%. There is also a growing demand for appropriate solutions from transport companies, public utilities, and government agencies.

According to IDC, the volume of software of the ISUP market of the Russian Federation will increase over the next five years by 3.4% annually, on average. Demand will be supported by enterprises of process production, trade, housing and communal services, transport, the expected increase in interest in these solutions from healthcare, educational and other municipal institutions.

2012: IDC: Market size $1.205 billion (+ 9.5 %)

SAP, 1C, Oracle, Microsoft and Galactica, vendors of enterprise management systems, have been holding more than 95% of the Russian market under control for two years in a row, the volume of which increased by 9.5% compared to the previous year and overcame the $1.205 billion mark. IDC reported in a study of the Russian market for information management systems software ( ПО ИСУП), Russia Enterprise Application Software Market 2013–2017 Forecast and 2012 Vendor Shares. Compared to 2011, the growth rate of the ERP systems market in Russia decreased by 4.5 times.

More than 25% of the total sales of ISUP software in 2012 fell on the process production sector, sales in the retail sector exceeded 20% of the total market volume. Enterprises of discrete production, organization of public utilities and distribution of electricity, financial companies remain the leading consumers of ISUP software.

According to the IDC, the shares of the main players in 2012 were distributed as follows:

• SAP - 49,9%.
• 1C - 29.2%
• Oracle - 8%
• Microsoft Dynamics - 6,8%
• "Galaxy" - 2%
• Others - 4.2%.

IDC predicts the growth of the volume of the Russian market for enterprise management information systems software over the next five years by an average of 7.3% annually. Demand will be supported by process production and retail enterprises, and interest in this software is expected to grow from public sector organizations.

2011. IDC: Market Size $927.05 million (+ 42.8 %)

In 2011, the Russian ERP systems market in the amount of almost reached a billion, dollars and the five largest vendors included two Russian companies - 1C and Galactica, although SAP occupies more than half of the market. 

According to IDC Russia Enterprise Application Software 2012-2016 Forecast and 2011 Vendor Shares, the volume of the Russian market for integrated enterprise management systems (ISUP) in 2011 amounted to $927.05 million, which is 42.8% more than the results of the previous year.

The growth of the market was driven by significant demand for business applications from small and medium-sized businesses. The demand from budgetary organizations, as well as banking companies, has significantly increased. Significant investments in ISUP were made by oil and gas and retail companies.

The shares of the main players in 2011 were distributed as follows:

• SAP - 47,8%
• 1C - 31.6%
• Oracle - 7,5%
• Microsoft Dynamics - 6,9%
• "Galaxy" - 1.8%

Continuous production remained the leading industry for the Russian ISUP market in 2011. The second place, as in the previous year, was for retail. Discrete production remained in third place in the list of the most profitable industries for ISUP suppliers. The banking sector moved to the fourth position, to the fifth - professional services.

As the press service of Galactica commented to TAdviser, projects in the oil and gas industry, as well as projects for new customers in discrete production and a number of ERP projects for universities, became significant for the corporation in 2011. The company also notes the active purchase by medium and small customers of specialized configurations and free software "Galactica Express."

IDC believes that the Russian ISUP market will grow annually by an average of 17.8% in the next five years. The growth will be driven by high demand for business applications among banking, retail, and government companies.

2010. IDC: Market Size $649.4 Million (+ 31.9 %)

According to IDC, the volume of the Russian market for integrated enterprise management systems (ISUP) in 2010 amounted to 649.4 million dollars, which corresponds to an increase of 31.9% compared to the previous year.

The leaders of the Russian ISUP market in 2010 were:

• SAP - 50,5%.
• 1C - 26%
• Oracle - 8,2%
• Microsoft Dynamics - 7,4%
• "Galaxy" - 2.4%.

The growth was driven by strong demand for business intelligence tools and customer relationship management solutions among large companies. The most popular solutions of this kind were among oil and gas companies, banks and retailers. The demand for an extensive range of ISUP solutions among small businesses also grew dynamically.

"Over the years, domestic business has become increasingly aware of the value of business analytics and CRM tools to assess business performance, as well as to improve customer experience," said Petr Gorodetsky, a software markets analyst. "A significant help here was the economic crisis, which forced Russian companies to take a fresh look at these solutions."

2009. IDC: Market Size $492.18 Million (-18.9%)

The ISUP market size is $492.18 million (-18.9%). IDC's first decline in many years is attributed to a reduction in the IT budgets of large customers in the first half of 2009 and, as a result, a significant decrease in the number of new full-scale implementation projects for this class of systems. In addition, according to analysts, the demand for ISUPs in the small and medium-sized business segment has significantly decreased.

The leaders of the Russian ISUP market in 2009 were:

• SAP - 50,1%
• "1C" - 22.3%
• Oracle - 9,6%
• Microsoft Dynamics - 7,1%. The share of this system is given in the study taking into account the adjustment of the income of this supplier for 2008. Microsoft provided IDC with updated information. According to the updated information, Microsoft's share in 2008 was 6.9%.
• "Galaxy" - 3.9%.
• Others - 7%.

The total share of Russian "1C" and "Galaxy" amounted to 26.2% against 22.9% a year earlier.

The segment was helped to avoid falling by more than a third along with the entire IT market in 2009 by an extensive base of customers who have already deployed systems and projects for the implementation of individual functional modules. IDC recorded a significant increase in demand for BI solutions from large corporate customers, which also positively affected the statistics on ISUP.

2008. IDC: Market Size $606.56 million (+ 4.7 %)

According to IDC, the volume of the Russian market for integrated enterprise management systems (ISUP) in 2008 reached $606.56 million, which corresponds to an annual increase of 4.7%. According to IDC forecasts, published in 2008, the Russian ISUP market in the next five years was supposed to increase by an average of 35% annually.

According to the results of 2008, the leader of the Russian ISUP market was:

• SAP 53.9% (+ 4.3% vs 2007)
• 1C - 18.7% (+ 4.3%)
• Oracle - 8,4% (— 6,5%)
• Microsoft Dynamics - 8% (+ 0.2%) (according to updated data, the share is 6.9%).
• Galaxy - 4.1% (-0.6%).

The total share of Russian companies in the top five increased by 3.8% compared to 2007.

2007. IDC: Market Size $579 Million (+ 58.7 %)

According to IDC, in 2007 , the Russian market for integrated enterprise management systems (ISUP) exceeded $579 million, which corresponds to an annual increase of 58.7%. This figure is almost twice the average growth rate of the Russian IT market. Such a high growth of the ISUP market compared to the previous, successful, year is due to the continuing growth of the Russian economy and investment in IT, increased competition in leading industries. In addition to large companies, ISUP solutions have actively introduced small and medium-sized businesses. The growth rate of the Russian ISUP market in 2007 was also positively affected by the efforts of suppliers aimed at expanding the partner network, increasing the share of indirect sales, especially in the regions.

The leader of the ISUP market in terms of supply volumes (in monetary terms) in 2007 was SAP share, which amounted to 49.6 %, the second place was occupied by Oracle (14.9% of the market). The third in the top five, systematically increasing its share, was the Russian "1C " (14.4 %). The top five were closed by Microsoft Dynamics (7.8%) and Galaxy (4.7%). The group of largest suppliers controlled 91.4% of the market, and the total share of Russian companies in this group increased from 18% in 2006 to 19% in 2007. 

Market Segments by System Type

ERP systems presented on the Russian market are divided into three groups. 1) Financial and management systems - for non-production enterprises:

• HansaWorld Enterprise,
• Maconomy ERP,
• Compass,
• ERP Monolith,
• Parus Enterprise,
• CIS Flagship.

2) Medium Integrated Systems - For Enterprise Management medium to large scale:

• 1C: Manufacturing Enterprise Management 8,
• Galaktika ERP,
• CAS "Business Lux,"
• IFS Applications,
• Infor CloudSuite Industrial (ранее ERP SyteLine),
• Infor ERP COM,
• Epicor iScala,
• Epicor 9,
• Microsoft Dynamics AX,
• Microsoft Dynamics NAV,
• Alfa system.

3) Large integrated systems:

• Infor ERP LN (Baan v.6),
• Oracle E-Business Suite,
• SAP Business Suite.

See also

• ERP Overview
• Enterprise Management Systems (Russian ERP Market)
• Geography of ERP projects
• Top ERP systems Market Trends (Russia)

Notes