Need To Promote Business Efficacy Drives Enterprise App Software Market

The need and degree of integration for enterprise applications in South Asia (India and Sri Lanka) and the Middle East and North Africa (MENA) region including the UAE, Saudi Arabia and Egypt, varies according to the nature the demand. Some countries demand a high degree of customisation for their applications and want localised products, whereas end-users in other countries are more global in nature and demand less customisation/ packaged products. However, diversity of all these markets is guided by nearly the same market factors and hence, prospects for the enterprise application (EA) software market look upbeat as companies are increasingly deploying these robust technologies to improve customer service and expedite business operations.

The enhanced need for creating competitive advantages, such as optimisation of capacity, reduction of lead-time and cost as well as increased profit through IT implementation is a major factor propelling the market forward. As scalability of IT systems is a priority, companies are seeking business solutions that can grow in tandem with the organisation. Chief technology officers (CTOs) and chief information officers (CIOs) are demanding domain-/ user-specific functionalities in sync with business requirements.

New analysis from Frost & Sullivan, Enterprise Application Software Market Overview & Trends, finds that the market earned revenues of over $715.9 million in 2008 and estimates this to reach $3802.0 million in 2015. The study deals with the challenges and issues faced by market participants in South Asia as well as the MENA region, dealing with these software solutions: enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM).

“The on-premise model is still the preferred choice over the on-demand model but organisations are analysing the benefits of moving large-scale software expenses from their capital budget to their operating budget,” says Frost & Sullivan Industry Analyst Santosh Kumar Sinha. “Awareness about the on-demand/ hosted model is spreading and more vendors are planning to provide applications on the hosted model.”

The pessimistic global outlook is exerting pressure on organisations to do more with less. Conservative approaches toward IT spending have slowed the pace of EA adoption, but markets are slated to witness increasing growth with varied extent from 2010.

India Market

In the Indian EA software market, organisations that are directly dependent on the international market have displayed a cautious attitude while those operating within the domestic space were able to cash in on the demand upswing for EA. Increasing focus on small and medium enterprises (SMEs) has translated into ERP vendor focus on more verticals such as insurance, power, and food and beverages.

Application Categories

The market has been monopolised by the ERP solution segment, which is expected to grow at a CAGR of 27.2 percent. However, companies are not opting for ERP systems with the full range of modules. They utilise only a few modules initially, hoping to install the entire package over time as business expands and needs intensify.

“Organisations are displaying a preference for integrated CRM and SCM solutions with ERP especially in the SME sector,” says Sinha. “However, pure play CRM and SCM solutions are likely to gain traction as companies grow.”

The customer-centric approach adopted by organisations is a major force pushing CRM software uptake. CRM will continue on its growth trajectory in the near future, as even the manufacturing sector is demanding entry-level CRM. The IT/ ITeS vertical will contribute significantly to the growth of this sector. Going forward, end users are likely to become more value sensitive, and price will not be a strong differentiating factor as mainstream vendors are also providing solutions at competitive price points.