Indian ERP market expected to cross Rs 800 crore by 2006: IDC

The ERP market was severely affected by the economic slowdown and grew only marginally in 2002 to reach Rs 569.2 crore. The ERP software market was the worst effected with the a negative growth of 12 percent and total revenues came down to Rs 192 crore in the year 2001 from Rs 217 crore in the year 2000. But it is expected to grow faster than the total market at a CAGR of 10.4 percent during the forecast period 2001-06. SAP continued its dominance in the Indian ERP Software market and improved its share to 59.6 percent in 2001. Oracle improved its share to 6.1 percent in 2001 and
grabbed the second place in terms of software revenues.

In this year, vendors actually got down to addressing the small to medium enterprise sector. Vendors also had to face higher intensity of competition as all the vendors pitched for a relatively smaller number of customers. Many customers also postponed their decisions due to economic uncertainty. At an overall level, the market was driven by a few large deals and remained flat compared to the previous year.

While large enterprises are in the process of further expanding their current installations, the small and medium enterprise are actively trying to understand and evaluate the benefits of these products. Convergence of ERP, CRM and SCM modules is the order of the day. The ERP vendors are rushing to add more sophisticated SCM and CRM functionalities to their ERP products. And the SCM, CRM vendors are also expanding their functionalities, encroaching on the area traditionally inhabited by the ERP vendors. Oracle also recently added a SCM module, and Baan and Peoplesoft both have acquired smaller SCM vendors to integrate into future releases of their ERP products.

According to Dinesh Jindal, Senior Analyst, IDC India "The battle between the best of breed and integrated solution providers will intensify and become increasingly pitched. We expect the integrated solutions to emerge stronger over time since these vendors are rapidly improving their solutions and the gap between them and best of breed solutions is decreasing"

According to an end-user survey conducted among 200 organizations by IDC, the top three factors while selecting an ERP solution were: Industry specific/mission specific functionality, Compatibility with current platforms ie the ability to handle different types of databases and Degree of customization possible.

This augurs well for the ERP market since Indian organizations are now maturing and are beginning to look beyond price when selecting ERP packages for their businesses. 

Cyber News Service

(CNS)