ERP Industry

Bad Economy is a Good Selling Point for the ERP Industry

In the economic slowdown organizations are racing to carve out the fat from their IT spending budgets and the ERP industry is jumping through hoops to meet the demands of special requests, decreasing licensing and yearly maintenance fees and offering special financing arrangements for new and existing consumers. More importantly, the ERP industry is publicizing more than ever the cost saving benefits and ROI on their products.

In these get down to basics market environment, new product offerings are being developed with the focus on features that are adding very visible, tangible benefits to a company's bottom line or top line. This emphasis is also on restructuring the software pricing models for the ERP industry around the globe. The ERP industry in general have always focused on offering applications that deliver valuable solutions to organizations, however, in today 's market economy, organizations need to see direct, quantifiable benefits immediately.

ERP vendors that do not show clear short term returns on capital expenditures, or positive impacts to the P&L are feeling the strong pressure to lower pricing or offering creative financing options face losing valuable market share and customers. Collaboration software is an example of and enterprise solution that may make it easier for employees to communicate with each other and in the long run positively impact the company's profitability. However, the difficultly in detailing and articulating what the short term benefits to profitability are is making it difficult in this business climate close the deal.

The marketing and sales campaigns the ERP industry is touting today are showing organizations in clear detail how, where and when their ERP applications will into where to save money, optimize resources to do more for less and bring in incremental revenues by focusing sales resources on the highest return customers and products. Cool features that were hot only a year ago are just nice extras this year such as a more user friendly email apps or ERP systems that makes things go a little faster won't be enough to meet current business requirements.

This environment is driving the ERP industry, particularly the large ERP vendors, to offer solutions that are more flexible, modular or pay as you go pricing models to ease the sticker shock of an expensive full scale ERP enterprise application. Many of the large on-premise ERP giants are offering the "pay as you go" model with many of their modular solutions and with web based, SaaS or software as a service, applications that have been getting incredible demand over the last five years.

ERP industry experts believe that the business climate, although it is painful, will lead to improved applications and technologies for businesses. The IT market and tech people are resourceful, and as we saw in the last recession, the layoffs forced many IT entrepreneurs to focus on their innovative ideas to build a better solution.

Written by :

aniseo