Net Presents ERP Vendors with New Challenges

By Pia Landergren, ITworld |  Opinion

Something is happening in the ERP (enterprise resource planning)
market. ERP vendors have been offering the ability to integrate their
software with related, customer-focused management systems and as a
result, the ERP market is picking up again, according to market

Early indications are that the ERP market is showing double-digit
growth again after a slowdown in the late 1990s. Worldwide license and
maintenance revenue for ERP systems was worth $21.5 billion in 2000,
according to preliminary figures compiled by Andrew Golloboy, ERP
research manager at market research company International Data Corp.
(IDC), who is in the middle of doing the survey. This represents
revenue growth of 13.1 percent from 1999 when the worldwide market was
worth $19 billion. In comparison, IDC's preliminary figures show a
growth of 8.1 percent between 1998 and 1999, when the worldwide market
for sold licenses and maintenance was 17.6 billion.

The update in sales is ascribed by industry insiders to vendor efforts
to link traditional ERP systems with CRM (customer relationship
management) and SCM (supply chain management) software, and allow users
to access the resulting integrated information over the Internet. ERP
systems' integration with various third- party software is far from
seamless, however, and as a result ERP developers still have their work
cut out for them if they want to attract more users and turn what is
just the beginning of an upturn into sustained growth, observers said.

Integrating ERP systems with related software packages from different
vendors -- and letting end users tap into the system over the Internet -
- is not easy, for ERP vendors or for the users implementing the

"I know a number of customers who have tried to do this, but who have
failed," said Joshua Greenbaum, principal of Enterprise Applications
Consulting in Daly City, California.

One vendor that has extended its ERP system recently is Dutch software
developer Baan Co. NV, which announced a move to integrate its ERP,
CRM, and SCM systems with WonderWare's FactorySuite manufacturing
management software at the CeBIT trade show in Hanover, which ended
last week. Baan and WonderWare are affiliated, since WonderWare's
parent, Invensys PLC, bought financially beleaguered Baan last year.

Another vendor, JD Edwards & Co., announced at the CTIA Wireless show
in Las Vegas two weeks ago a deal under which it will support Microsoft
Corp.'s Pocket PC platform for its OneWorld ERP package -- another suit
of integrated software.

Database giant Oracle Corp. is currently marketing its own version of
integrated software, the so-called E-Business suite of products.

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