The ERP evolution

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Experts agree that companies are now increasingly ramping up enterprise IT initiatives to take advantage of improving economic conditions.

As post-recession growth gathers pace, market watchers are predicting a bullish future for enterprise software sales.

"In 2010, major software vendors expanded their product portfolios, acquired companies where appropriate to their plans, and reached deeper into emerging markets," said Joanne Correia, managing vice president at Gartner.

"The year represented a return to solid footing as the market recovered and expanded in terms of revenue and geographies."

IDC predicts that the sector will achieve a total market size of $36.2bn this year. The study, IDC Worldwide Semiannual Enterprise Resource Management Applications Tracker, estimates year on year revenue growth of 4.6 per cent in the second half of 2010 against sales of $17.6bn.

The report notes that, of the total of 351 vendors evaluated, five vendors - SAP, Oracle, Microsoft, Sage, and Intuit - earned more than $1bn each in ERM software revenue during 2010.

Investing in automation

"In this post-recession business environment, companies are investing in automation for competitive advantage, and in tools to help them get closer to their customers, partners and suppliers," said Michael Fauscette, IDC group vice president, Software Business Solutions.

"While the overall enterprise resource management market should produce steady growth for some time, we expect spending to increase in vertical-specific applications, applications that increase social collaboration and community, mobile applications, and applications that facilitate both B2B (Business-to-Business) and B2C (Business-to-Consumer) commerce processes."

This view was echoed by Sage senior commercial development manager, Lindsay Boullin: "The financial meltdown has led a lot of businesses to ask ‘what next?' and ‘what will we do about it?'. This has led to a demand in Business Intelligence (BI) and other tools (such as mobile access to business data) that help a business have an up to the minute view of their business, enabling them to take good decisions, quickly."

Focus on cost savings

Boullin added: "Between 2008 and about the end of 2010 we also saw a focus on features that saved costs (for example electronic documentation) but we are now seeing more interest in features that help organisations grow the top line, like sales force and marketing automation (i.e. CRM)."

The newly published Computing white paper, ERP - Building on the Basics agrees that that demand for ERP software changed significantly after the financial meltdown of 2008 - after which there has been a steady return to growth. For the study, Computing surveyed 150 UK business decision makers, two thirds of whom were found to be running some kind of ERP system.