Monday, January 14, 2002		Article

ERP vendors emerging as major e-business enablers, says IDC
Tribune News Service

THE ERP software market has been estimated to be of the tune of Rs. 321 crore in the year 2000-01 and is expected to reach Rs.507.5 crores by 2005-06, exhibiting a compounded annual growth rate (CAGR) of 9.6 per cent. This has been revealed in a recent report published by IDC (India) titled 'ERP Market in India, 2001'. The report projects the outlook for ERP applications market for the period 2000-01 to 2005-06 and is based on a survey conducted in 1731 organisations of the top 8 cities of India segmented on the basis of organisation size and 11 vertical segments. In addition to this, the leading ERP vendors were also contacted for the survey.

Key players in the ERP applications market have been found employing a two-pronged strategy to cater to both mature market of large organisations as well as the high potential market of the SME segment. With the market players positioning themselves as e-business solution providers, they cater to the large organisations that are driven by strategic business need of automating their processes and Web orienting their activities. On the other hand, players are offering easy-to-use and easy-to-deploy functional solutions which can be easily extended and have Web enablement features.

"ERP" i.e. Enterprise resource planning has been defined by IDC as multi-user integrated enterprise applications. As can be seen from the table, a sizeable number of the large organisations have already implemented the ERP solution or planning to do so. The current requirement according to the report, is for enhancing their existing solutions to incorporate front office solutions (CRM) and supply chain solutions (SCM) and having the solutions Internet-enabled to move towards e-business.

Another noticeable trend according the table is the fact that over 5 per cent mid-sized organisations are planning to implement ERP, which when translated into absolute numbers mean volume business. IDC believes that the current requirement for this segment would be point solutions to cater to their functional needs.

Hence, at present, the mid-sized organisations would fuel the sales of point solutions whereas the adoption of front office and extended back office applications is going to be either an extension to the already implemented ERP solution or as a standalone point solution or an integrated e-business solutions in the large organisations.

This has resulted in the need for new type of partnerships for the ERP vendors. With the CRM and SCM markets expected to grow rapidly, ERP vendors are going for product enhancements, either inhouse or through partnerships with other application vendors, a phenomenon which is happening at a global level. On the local front they are looking at partners who would increase their market reach.

IDC (India) Limited was formed in 1987 as an affiliate of IDC (International Data Corporation) that is based in Framingham, Mass., USA. IDC provides IT market research and consulting to more than 3,900 high-technology customers around the world.