Rising Costs Driving Asia Pacific Firms to Invest in Enterprise Resource Management

While spending for traditional Enterprise Resource Management (ERM) applications will remain strong through 2015, especially for areas that enable faster ROI, International Data Corporation (IDC) believes organisations will start looking beyond traditional ERM functionalities and delivery models, and will explore the adjacent areas that will help them drive real value to their business.

 

In an increasingly competitive market, organisations are faced with the need to respond to market and competitive moves very rapidly. "The need to streamline business processes and proactively manage human capital and assets will lead to increased Human Capital Management (HCM) and Enterprise Asset Management (EAM) investments in AEPJ. organisations not able to boost their productivity levels while keeping their cost down will fail to succeed in this challenging market. In line with this, we are seeing companies becoming more aware of the need to get a better understanding of their business performance, which will drive more attention to Financial Performance and Strategy Management (FPSM) applications," says Daniel Zoe Jimenez, Program Manager for Enterprise Applications and Information Management at IDC Asia/Pacific.

 

In addition, IDC expects sizable application modernization activity in the region -- especially in the most mature markets -- since areas like HCM and EAM were not sufficiently covered by legacy Enterprise Resource Planning (ERP) applications. Many organisations in APEJ implemented their first ERM systems to deal with Y2K glitches, and these systems are now being replaced or updated in order to support business expansion and deal with new business requirements. 

 

"Older ERM applications might succeed at getting daily routine processing tasks done, but they will most certainly fail to efficiently support the required process changes and deliver business transparency. Clearly, upgrading to the latest version of a core enterprise application (e.g. ERP) should be a prerequisite for organisations willing to mitigate risks, control maintenance costs, reduce complexity, and standardize corporate governance activities," Jimenez adds.

 

Game-changing technologies like cloud computing, socialytics, and mobility are transforming the enterprise applications market, and will have a direct effect on ERM spending. These technologies are increasingly used by organisations in the region as facilitators to compete more efficiently.  

 

"For example, organisations are starting to embrace social media tools in order to improve its customer, partner, and supplier relationships and internally, as a way to empower collaborative work," concludes Jimenez.

 

IDC expects the overall Asia Pacific excluding Japan (APEJ) Enterprise Resource Management (ERM) market to grow by 14.7% in 2011, reaching $2.83 billion. We anticipate this positive momentum to continue through the forecast period generating a 9.8% five-year CAGR though 2015, since organisations will keep focusing on improving operational efficiencies and agility, which will lead to new ERM investments. In addition, the People's Republic of China (PRC) will be the largest contributor to ERM spending during the forecast period, with a share of 32.8% of the APEJ ERM market in 2011, and 35.3% in 2015, followed by Australia and India. 
 
 

MORE ARTICLES ON IT SPENDING

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern