The ERP market will grow at 37% over the next five years, soaring to $52bn by 2002, AMR Research claims in a new report. The study, Enterprise Resource Planning Software Report, 1997-2002, said market growth would be driven by three main factors: additional functionality in the packages, the spread of their use to wider industries and selling more user licenses to existing customers. Traditionally, ERP vendors have concentrated on manufacturing, human resources, finance and logistics applications, but now they are expanding their offerings to include supply-chain management, sales force automation and customer support capabilities, the report said. ERP application usage is also spreading to a much wider variety of industries. They used to be the exclusive domain of manufacturing companies but now retail, utilities, the public sector and health care organizations are all adopting ERP software suites as a way of managing their business operations. Aware of this trend, the report says ERP vendors are starting to offer more and more customized solutions, tailored for individual industries. The leading ERP vendor, SAP, for example has identified 15 different markets for which it either sells, or is developing, customized versions of its R/3 software suite. The vendors will also try to boost growth by selling licenses into their installed base. The report found the percentage of employees currently using the ERP system within individual companies was only around 10% to 20%. But this figure is expected to grow to between 40% and 60% within the next five years, AMR said.
