ERP manufacturers roundtable discussion
Software Advice, a website that reviews software for manufacturers, recently hosted a roundtable discussion on the state of the manufacturing ERP software industry. They teamed up with four ERP industry insiders to report on activity in the software as a service (SaaS) market, how vendors are adjusting prices to compensate for the economy, how offshoring influences spending and whether manufacturers are implementing integrated enterprise resource planning (ERP) systems or best-of-breed applications. Here is an overview of their findings:
- SaaS solutions are gaining momentum. Activity in the SaaS market is up among small- and medium-sized enterprises (SMEs). The main driver is the low barrier to implement web-based solutions. SMEs don’t have the same IT resources that their larger counterparts do.
- Software Vendors Adjust Prices to Compensate for the Recession. The recession created pent-up demand as many manufacturers delayed their ERP projects. This has placed pressure on software vendors’ revenues, which has prompted many to drop their prices. Additionally, most manufacturers have tighter IT budgets, so vendors are competing on a cost basis and are reducing both license and maintenance fees.
- Manufacturers Seek Integration Across Offshore Facilities. With more manufacturers looking to move facilities offshore, integration is becoming a greater – and often requisite – driver of ERP software acquisition. In some cases, small and medium-sized manufacturers are even acquiring ERP software just to make a business case for offshoring.
- More First-Time ERP Buyers Seek Integrated Suites. As the functional gaps between integrated and best-of-breed offerings narrows, most first-time ERP buyers are looking towards integrated suites rather than a best-of-breed system. This can be attributed to ERP vendors enhancing functionality of their modules and adding vertical depth by acquiring best-of-breed applications into their ERP suites. As Jonathan Gross points out, “deciding between ERP and best-of-breed applications is no longer an issue that involves a balancing of clear tradeoffs.”
To continue reading the rest of the report, visit: 2010 Manufacturing Software State of the Industry Roundtable – Part Two.