WHAT PERCENTAGE OF ERP SOFTWARE SALES ARE GOING TO SOFTWARE AS A SERVICE?
According to data collected for by analyst firm Aberdeen and released in a 2008 report titled ERP in Manufacturing, 117 of 527 companies based in North America are considering an on-demand ERP solution. Of these North American companies considering a SaaS ERP solution, 26% are increasing their budget for ERP by more than 10% in the upcoming year. 23% are increasing the budget 1%-10% over the next 12 months. In fact, nearly half (43%) of North American respondents indicated that they will be replacing the current ERP with a different package in the next 12-36 months. The need for additional functionality was identified as the top driver (56%) for North American companies considering a SaaS model.
114 survey respondents were from the EMEA (Europe, Middle East and Asia) market. Of this number, 33 companies are considering a switch to an on-demand ERP solution. 24% are increasing the budget for ERP by more than 10% in the next fiscal year; 27% are increasing the budget by 1%-10%. However, in the EMEA market, the shift towards new ERP vendors looks to be a slow one. For example, 30% of respondents plan to replace their current ERP provider within the next three years. Only 9% have plans to replace their current provider by Q1 2009.
WHAT THE MOST COMMON REASONS FOR SAAS ERP ADOPTION?
According to the survey of over 800 respondents for the Aberdeen ERP in Manufacturing benchmark update, 29% of respondents will consider a SaaS model for ERP. 76% of the respondents indicated that the lower total cost of ownership (TCO) was a top factor influencing the decision to utilize a SaaS ERP software solution. The ability for a SaaS delivery model to reduce the cost and effort of upgrades (58%) and limited IT resources (45%) were also top factors influencing companies to consider a SaaS ERP software solutions. Finally, 31% of respondents believe a SaaS delivery model is perceived as a lower risk compared to an on-premise solution.
For those respondents who are hesitant to consider a SaaS ERP solution, 60% cited security concerns as a main deterrent. Forty-eight percent (48%) of respondents want to control the upgrade process and 42% believe that ERP is too strategic to running the business to consider a SaaS model. Finally, 39% of respondents believe that the risk of significant downtime poses a concern for predictable SaaS performance.
WHAT THE MOST COMMON INDUSTRIES ADOPTING SAAS ERP SOFTWARE SOLUTIONS?
Enterprise Resource Planning software adoption is extremely broad based for both on-premise software systems and software as a service ERP systems. However, some 2008 industry data reveals that the top ten industries accounting for ERP software revenues include the following:
General manufacturing
Automotive
Industrial equipment manufacturing
Consumer packaged goods (CPG)
Business services; including professional services
Transportation, Distribution and supply chain enterprises
Technology; primarily software technology and bio-technology
Aerospace and defense
Financial services
Government and public sector
ERP Software FAQs
Please direct any ERP software questions to faqs[at]erp.asia.
FAQs are categorized according to business application software type.
WHAT PERCENTAGE OF ERP SOFTWARE SALES ARE GOING TO SOFTWARE AS A SERVICE?
