Notable Shift: Enterprise Customer Interest in ERP Gaining Some Steam at Mid-Year

Last fall, a Forrester Research study found that most had no interest in investing in ERP. New information, however, is showing a renewed enthusiasm for ERP.

By Todd R. Weiss
Mon, June 27, 2011

CIO — For ERP vendors and users, the sluggish Enterprise Resource Planning marketplace of the last two years is finally gaining a bit of enthusiasm again.

Maybe it's due to the slightly more optimistic economic news that occasionally trickles into the national news feed. Maybe it's the improving corporate earnings reports that are showing new promise for more and more companies each week. Or maybe it's just that business leaders are cautiously allowing themselves to think positively about ramping up again after the stubborn and tiring recession of 2007 to 2009.

Whatever it is, businesses are again starting to at least take a look at how improving their critical ERP systems can bolster their operations and that's notable, according to China Martens, an enterprise applications analyst with Cambridge, Mass.-based Forrester Research Inc. (FORR)

That's a small but positive shift from early last month, when Forrester released a new study, "The State of ERP in 2011." Back then, most enterprises were reporting that they were standing pat on their ERP investments for 2011 and wouldn't be increasing their spending, according to an IDG News Service story. But since the data for that study was actually collected last fall, things have started changing a bit.

"I think we're in a period of evolving," says Martens, who co-authored the study with fellow Forrester analyst Paul D. Hamerman. Last fall, when client interviews were being conducted for the study, they had somewhat less optimistic views about their ERP plans going into 2011, she reports.

"New information from clients today who are actively looking for upgrades or who are looking to jump into ERP appears pretty healthy today," Martens says. "The ERP waters are diverse — some people are poised to dive in and there are others who are dipping their feet in and trying to decide if it's time to make a move."

One other big change in the ERP mood of clients since last fall, she says, is that nowadays more of them are discussing interest in ERP Software-as-a-Service (SaaS), which hadn't been such a big attention-getter in the past. "It's something that they're maybe not actively considering, but they are at least looking at it."

That means that vendors who offer old-world, on-premises ERP are paying more attention, Martens says. "The impact of SaaS on on-premises vendors has forced them to look again at the economics of the times" and consider whether they need to include a SaaS ERP product to be competitive in the marketplace.

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