The
occurring of events raises the question whether the
enterprise software market is reaching the maturity
stage. Indeed, this market is nearing the maturity stage.
The enterprise software sector is highly fragmented,
with both big and small players. The small players only
provide software products for particular functions while
the large players namely, SAP, Oracle and others provide
a whole suite of enterprise software products. The revenues
of the bigger players like SAP and PeopleSoft and that
of the smaller players like I2 have all decreased over
the last few years. Giga Information Group, a market
research company based in US has also predicted that
this sector will grow only 4.8% annually through 2006.
With a sluggish growth and companies experiencing a
fall in profit margins, players are jockeying to gain
market share. Towards that players today are trying
to consolidate their positions through mergers and acquisitions.
The present situation is due to the boom, which took
place in the 1990s.
In
the 1990s, ERP was considered as the biggest enhancement
in business software. Managers thought that ERP would
change the way their organizations worked as it was
designed to integrate every back-office function of
their companies into a single integrated system. This
would enable the managers to have all types of information,
be it sales or inventory or financial at their finger
tips because ERP would allow them to control everything
from sourcing of raw materials through production and
distribution. As a result, large corporations adopted
ERP. They installed ERP systems for each function, one
for accounting, another for sales, and even for human
resources from different suppliers. Upbeat by the benefits
of ERP applications, technology managers of many companies
persuaded their Chief Information Officers (CIOs) to
implement ERP systems in their companies. According
to AMR Research, a US-based market research company,
between 1997 and 2000, major companies had spent between
$250 mn for ERP systems. |
