Enterprise
Resource Planning (ERP) consists of Human Resource (HR),
finance, material management, sales, production planning
and control. Many vendors in the market are providing such
softwares. For instance, SAP-AG in Germany is the market
leader with a market share of around 35%. Other vendors
include Oracle, (including People soft and JD Edwards) and
a few local players.
ERP
is moving beyond the boundaries of the enterprise to form
Extended ERP (EERP). The concept of ERP has been popular
since the last decade; as a result, 70 to 80% of the large
firms are already on the ERP system. Now, many of the multinational
firms are restricting their business to partners who have
the same ERP. For example, a firm in Small and Medium Enterprises
(SMEs) sector, with an annual turnover of Rs. 120 mn and
was planning to implement an ERP system, where they had
to spend Rs. 12.5 mn, i.e., more than 10% of the annual
turnover. The reason being one of the partners had the ERP
package and was asking the other to implement the same.
Now,
with the bigger firms in their net, the future growth of
ERP vendors will depend on the SMEs. In any country, SMEs
are the largest contributors to the economy. This year,
if we see in India, the SMEs have made a huge contribution
to the IT industry. The Business Process Outsourcing (BPO)
industry is a classic example of the success of SMEs. |