There used to be only a couple of ERP vendors who mostly targeted the largest of companies on a worldwide basis with their CRM applications and other customer relationship planning software, enterprise resource planning applications, human resource workflow management and more. As the market for ERP applications emerged as viable and growing, more ERP vendors entered the market with competitive ERP products and challenged the established ERP vendors’ market dominance.
As everyone knows, after a market is established, competition entering the marketplace is a good thing. Such was the case with the increasing amount of ERP vendors. The ERP vendors both existing and new to the market had to offer superior CRM applications and ERP enterprise systems, and the very presence of more ERP vendors added validity to the market. So for many years, there were mostly behemoth ERP vendors competing around the globe, and there was plenty of business for all of them as ERP software clearly made corporations more efficient and profitable.
Even better for the ERP market was when third party companies began creating products that were compatible with the large vendors’ ERP software. A software company, for example, may offer accounts payable, accounts receivable, or payroll systems that plug right into an Oracle or SAP or PeopleSoft ERP system with little or no system integration efforts. Another independent software vendor may offer manufacturing or shipping management software that plugs into particular ERP vendors’ systems. In addition, value-added resellers, who are independent companies that sell software typically for defined functions or industries, also provide services to integrate front- and back-office applications with specific customer relationship management applications and ERP vendor software. All these other companies providing add-on products further validate and expands the market for ERP systems.
For years, the ERP systems market was dominated by very large players. This is changing in the ERP marketplace. The latest trend with ERP vendors is that smaller ERP vendors are starting to enter the market. The reason is, now that ERP systems have proven viable solutions for increasing efficiencies and augmenting profits, more medium-sized companies are looking into ERP systems than ever before. The huge, multi-million dollar ERP systems provided by the large ERP vendors are not cost-efficient for these medium-sized companies. In addition, the large ERP vendors need to basically have a different marketing department, and offer different ERP applications, in order to compete in this market profitably. Trying to sell their large systems to medium or small corporations is a huge waste of time and resources and unless they offer highly scalable ERP products that are also scalable in the price tag, it will be a waste of time and resources for the sales staff of a large ERP vendor.
The good news for buyers: there are now many ERP systems vendors selling software that will be suitable to the largest, and the smallest, of corporations.