Old world ERP takes on a new avatar

By : |August 4, 2011 0

Economic woes had a major impact on how companies chose to implement application solutions during the recession. Companies were forced to cut ERP implementation budgets and duration periods, they nonetheless realized significantly more business benefits from their ERP software than they did in 2009.

Gartner predicts, by 2013, 5% of enterprise applications (EA) programs will use leading indicators of business performance to demonstrate EA value. Further Gartner opines, 22% of EA programs will be led from outside the IT organization by the end of 2014. While 20% of organizations will adopt alternative names for the EA discipline, another 20% of organizations will apply an "explore/exploit" style to EA that delivers demonstrable business value. There are strong indications that 90% of organizations will use anchor models as the primary means of communicating enterprise change to business leaders in coming few years.

EA Trends

While it is good that companies are not spending as much on ERP implementations as they have in years past, the bad news is that many companies are cutting corners in their attempts to do more with less. Even though implementation costs and durations decreased, more companies beginning their projects with unrealistic expectations and are blowing away their budgeted time and resources at an alarming rate.

The 2011 witnessed some interesting trends that began last year and continue into this year. The accelerating adoption of SaaS and the increased focus on business case and benefits realization are both trends that aren’t too surprising in this economic environment.

Most companies (over the years) maximized the benefits of offshoring. However, today the client demands more. They wish to innovate and use automation to not just do the work faster, but eliminate some of the steps in the SAP implementation cycle. It is evident that leading system integrators will automate the implementation of SAP in days to come. What is equally encouraging is that there is renewed interest of clients in SAP investments and a decrease in the usage of hybrid environment. Clients are willing to try SAP’s HCM and supply chain management tools, where traditionally PeopleSoft were the favorites.

Gartner has released a forecast that predicts a 16.2 percent increase in SaaS revenue in the enterprise application market from 2010. The SaaS revenue in the enterprise application software market in 2009 was $7.9 Billion and, according to the analyst firm, it is forecast to increase to $9.2 Billion in 2010, a solid 15.7 percent increase from 2009, considering the kind of resistance SaaS has been seeing in the enterprises due to concerns over security and integration issues.

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