MUMBAI, INDIA: The need and degree of integration for enterprise applications in South Asia (India and Sri Lanka) and the Middle East and North Africa (MENA) region including the U.A.E, Saudi Arabia and Egypt, varies according to the nature the demand.

Some countries demand a high degree of customization for their applications and want localized product, whereas end-users in other countries are more global in nature and demand less customization/ packaged products.

However, diversity of all these markets is guided by nearly the same market factors and hence prospects for the enterprise application (EA) software market look upbeat as companies are increasingly deploying these robust technologies to improve customer service and expedite business operations, said a press release.

The enhanced need for creating competitive advantages, such as optimization of capacity, reduction of lead-time and cost as well as increased profit through IT implementation is a major factor propelling the market forward. As scalability of IT systems is a priority, companies are seeking business solutions that can grow in tandem with the organization. Chief technology officers (CTOs) and chief information officers (CIOs) are demanding domain-/user-specific functionalities in sync with business requirements.

New analysis from Frost & Sullivan, Enterprise Application Software Market Overview and Trends, finds that the market earned revenues of over $715.9 million in 2008 and estimates this to reach $3802.0 million in 2015.

The study deals with the challenges and issues faced by market participants in South Asia as well as the MENA region, dealing with these software solutions: enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM).

“The on-premise model is still the preferred choice over the on-demand model, but organizations are analyzing the benefits of moving large-scale software expenses from their capital budget to their operating budget,” said Santosh Kumar Sinha, industry analyst, Frost & Sullivan.

“Awareness about the on-demand/hosted model is spreading and more vendors are planning to provide applications on the hosted model.”

The pessimistic global outlook is exerting pressure on organizations to do more with less. Conservative approaches toward IT spending have slowed the pace of EA adoption, but markets are slated to witness increasing growth with varied extent from 2010.

In the Indian EA software market, organizations that are directly dependant on the international market have displayed a cautious attitude while those operating within the domestic space were able to cash in on the demand upswing for EA. Increasing focus on small and medium businesses (SMBs) has translated into ERP vendor focus on more verticals such as insurance, power, and food and beverage.

The market has been monopolized by the ERP solution segment, which is expected to grow at a compound annual growth rate (CAGR) of 27.2 per cent.

However, companies are not opting for ERP systems with the full range of modules. They utilize only a few modules initially, hoping to install the entire package over time as business expands and needs intensify, said the report.

“Organizations are displaying a preference for an integrated CRM and SCM solutions with ERP especially in SMB sector. However, pure play CRM and SCM solutions are likely to gain traction as companies grow.” added Sinha.

The customer-centric approach adopted by organizations is a major force pushing CRM software uptake.

According to Frost & Sullivan, CRM would continue on its growth trajectory in the near future, as even the manufacturing sector is demanding entry-level CRM.

The IT/ITES vertical will contribute significantly to the growth of this sector. Going forward, end users are likely to become more value sensitive, and price will not be a strong differentiating factor as mainstream vendors are also providing solutions at competitive price points.