ERP industry recovers as more companies discover its benefits

6/28/2011 at 5:37 pm by The Sage ERP Team

Earlier this year, Cambridge, Massachusetts-based market analysis firm Forrester Research released a report entitled, "The State of ERP in 2011." The report was compiled from research and surveys completed at the very end of 2010 and made many predictions about the coming state of enterprise resource planning. The report concluded that enterprise resource planning adoption was stagnating and that most enterprise executives were going to keep the old systems that they already had.

However, because the report drew on information that dated from last year, NetworkWorld.com thought it prudent to check in with Forrester Research. The website spoke to China Martens and Paul D. Hamerman, who wrote the report. Interestingly, they now believe that the ERP market is improving and that with growth will come greater innovation and ultimately superior products and services for enterprises everywhere. Given the change of heart that the Forrester analysts seem to have had, here are some of the reasons why ERP is thriving, compared to predictions made less than a year ago.

The recession is over
Many company executives, especially those in industries that use enterprise resource planning, were still regaining their balance after the great recession of 2007 to 2009. Though the economy isn't on fire at the moment, it has made vast improvements. It is possible that the quality of ERP software systems has remained constant, but with an official recession so close in the memory of enterprise managers, an innovative new technology seemed like a dangerous risk.

The cloud has arrived
As of the publication date of Forrester's report, the cloud, or Software as a Service (SaaS) had not reached widespread availability. As a result, ERP service that can be remotely hosted on multiple computers has piqued the interest of many companies and reinvigorated the sluggish ERP market. While not all businesses will choose to migrate to the cloud right away, enough will to drive investment in ERP systems. That investment will hopefully result in a competitive market and a great deal of innovation.

ERP is now the standard
There is an argument to be made that companies have simply acclimated themselves to the idea of a unified computer system that manages all their assets and resources. While ERP has existed in one form or another for well over a decade, it may be that 2011 is the year of ERP. Whereas at the end of 2010, enterprise resource planning seemed frivolous. Managers may now have come to terms with the fact that ERP is necessary and here to stay.