A Report on Mid-Market ERP

1
A Report on Mid-Market ERP

• October 11, 2001
• MBA 253
• The Pegasus Group
• Mario Rosso
• Phil Randolph

2
Emerging ERP Opportunity

• The potential market for mid-market ERP systems
  has forced major vendors (JBOPS) to reevaluate
  and redesign their systems
• A large number of new vendors have emerged to
  meet the growing demand.

3
Changing Market Trends

• ERP market traditionally confined to fortune 1000
  companies
• 1990s Boom in ERP sales to large Companies
• ERP vendors designed products for this market
• 1998-Present ERP sales in decline
• Factors Preventing Mid-size companies from
  adopting ERP
• Complexity
• Cost
• Lengthy Implementation

4
Mid-Market Customer Profiles

• Gartner Group 200mill -- 1bill rev.
• Marcam 50mill -- 500mill rev.
• PeopleSoft Below 750mill
• Others lower bottom range to 20mill
• Association For Computing Machinery
• Large More than 1,000 employees
• Mid Between 50 and 1,000 employees

5
Mid-Market Vendor Profiles

• Ross Systems Inc.
• Provides ERP and e-business solutions to 3200
  businesses world wide
• http//www2.rossinc.com
• ABACUS Data Sys.
• http//www.abacusdatasystems.com
• Handout

6
Forces Driving Mid-Market Firms to Deploy ERP

• Competition (large and small enterprises)
• Need for real-time info to help speed delivery of
  products and services to customers
• Improved decision making
• ISO requirements and Y2K
• Promote uniformity in business processes

7
Forces Driving ERP Vendors to Market to Mid-Size
Firms

• ERP market for Fortune 1000 firms is saturated
• Declining in North American by 12 per year
• Mid-market ERP demand growing
• Estimates between 32-50 per year through 2003
• Far more midsize companies (30,000 - 70,000)

8
Factors Inhibiting Mid-Size ERP in Past

• High costs
• Installation
• Maintenance
• Training
• Complexity of system
• Necessity of hiring full-time IT support staff

9
Inhibiting Factors Continued

• Fear that system won't keep pace with changing
  nature of organization
• Concern that vendor won't be available for
  long-term support
• Unacceptably long waits for ROI

10
Mid-Market ERP Selection Criteria

• Best-fit for business processes (most important)
• User friendliness
• Scalability
• Support
• Training

11
Selection Criteria Continued

• Ability of system to integrate with legacy and
  future applications
• Price point below 1 million
• Modularity of applications
• Web delivery

12
Emerging Technologies

• Hosting ASP
• Delivered over Internet/VPN, leased-lines
• System installed maintained at vendor
  facilities
• Infrastructure and software issues diminished for
  customer
• Low monthly rate per user

13
Emerging Technologies

• Pay-by-the-drink
• ERP applications offered as modules
• Customer only purchases services they use

14
Thank you for your time
15
(No Transcript)