ERP investments to slow in 2011

But ERP vendors will continue making significant product innovations, Forrester Research says

The number of companies planning to invest in their ERP (enterprise resource planning) systems will drop slightly this year, according to a Forrester Research report, even as IT spending overall is expected to rise.

25 per cent of the roughly 900 companies surveyed by Forrester plan to upgrade, expand or implement an ERP system, down from 29 per cent in a study last year, according to the report by analyst Paul Hamerman.

But 72 per cent are "in a holding pattern for 2011, with plans to stand pat or no specific plans to invest in ERP," Hamerman wrote.

Roughly half of ERP customers are running product releases that are two versions behind the current one, according to the report. But expiring support windows and related price increases will spur more upgrades over time.

Still, overall the ERP market has nonetheless rebounded well from its "disastrous" 2009, Hamerman wrote.

Although many customers may not adopt them for some time, ERP vendors will continue to roll out features and functionality. Those trends include cloud-based deployment options, mobile applications and embedded business process modeling, Hamerman said.

One of the most significant ERP product launches in recent memory, Oracle's Fusion Applications, is expected to happen this quarter.

Perhaps with one eye on the economy, Oracle has set modest public expectations for adoption of the long-delayed software, which is supposed to combine the best attributes of its various ERP lines into a next-generation suite.

Fusion Applications will be available in modular fashion and available for deployment both on-premises and in the cloud. Oracle has stressed that customers will be able to adopt Fusion at their own pace.

SAP is also expected to make news this year, with the release of a series of SaaS (software as a service) applications that are meant to be extensions of its on-premise ERP systems, as well as mobile software based on a platform that combines its technology with that acquired through the purchase of Sybase.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Chris Kanaracus

IDG News Service
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