Enterprise Resource Planning
Outlook, 4th Quarter, 2003
To understand how to buy or invest in the ERP market in the late
2003, you need to be aware of four things:
- The products are commoditized. Even though there are
significant differences in design and ability to deliver value
among the 100 or so ERP software products, these are almost
impossible for an intelligent buyer to detect. Decisions,
therefore, will be for other reasons besides product quality or
- Current users are underpenetrated. Even people who have
paid for company-wide licenses for their products have still not
fully implemented their systems. This means that most ERP companies
can make money and deliver value simply by selling into their
installed base. There is little incentive for innovation,
therefore, and not much for improving the product.
- People have yet to realize value. Bottom line, many
users of ERP feel that they have not gotten their money's worth.
Say the word, "business case," to the typical ERP'ed CFO, and
you'll get a snort of derision. The potential for value is still
there; now, CIOs who want to keep their job are spending most of
their cycles on extracting the potential that is there.
- The products are aging. Most ERP products were designed
originally to replace COBOL main-frame systems with 4GL-based
client-server products. The 4GL model for managing business
processes was always particularly strong at tracking transactions
and reporting on them, but much weaker at supporting more fluid
business processes or supporting decision making. New ways of
managing information have emerged, but for the most part, the ERP
products are only pretending to use those new ways.
How should you invest in ERP companies and products, given the
current environment? Cautiously.
B2B Analysts, Inc., can help you make more informed decisions.
We have a large library of research on ERP products and companies
that is available only to customers. Our staff has been tracking
ERP companies for 10 years, and we have somebody on staff with good
practical knowledge of each of the major vendors' products.
Among the titles that were most popular in 2003 were SAP
Netweaver: a Review and JD Edwards Fades Away, one of
many pieces we issued on the mergers and acquisitions in the
In 2004, our research calendar contains at least one and
possibly more items on each of the following companies: SAP,
PeopleSoft, SSA, QAD, and Lawson.
If you are interested in getting more information or becoming a
research client, please contact us.