The ERP market in the manufacturing sector is forecast to rebound over the next five years and grow from $9 billion in 2002 to $12 billion by 2007, according to an updated study by ARC Advisory Group.
General market uncertainty and persistently weak global economic trends had a negative impact on the ERP applications market in 2002 as annual revenues declined -0.6 per cent from 2001. Despite the slow, challenging market, many manufacturers regard the current business climate as a good opportunity to take decisive steps aimed at revamping their operations and making them more cost effective.
According to ARC Analyst Steve Clouther, ‘The world economy remains difficult and the geopolitical environment is still unpredictable. The biggest difference between the situation a couple of years ago and now is that companies are investing almost exclusively in order to generate greater cost effectiveness. In late 1999, there was a huge surge in ERP implementations as businesses around the world prepared for the Y2K situation. Now, four years later, the motivation is for the manufacturers to replace or upgrading their ERP solutions.’ Suppliers are now developing and offering pre-packaged solutions for the small and medium size businesses with pre-defined set costs and implementation schedules. Packaged solutions are preconfigured software and services that let users take a modular approach to technology investment, as well as a phased approach to implementing a complex business solution. These address the business’s most pressing problems first, with predictable schedules and time to ROI.