Risk Management, Compliance Drive Adoption of Accounting Software in Asia
The financial accounting applications market in the Asia/Pacific region (APEJ), excluding Japan, is forecast to grow at a five-year compound annual growth rate (CAGR) of 10.6%, rising from US$979.9 million in 2010 to US$1.46 billion by 2014, according to IDC’s Asia/Pacific Semiannual Enterprise Applications Tracker.
IDC says that the growth is fueled by the demand from SMBs to automate their accounting processes, as well as large enterprises wanting to upgrade their accounting system to scale up to meet their business growth. "With the increase awareness in governance, risk and compliance, more companies are also adopting these practices to reduce their risk exposure and increase their transparency," says Alan Tong, Senior Research Manager of IDC’s Asia/Pacific Applications and Services Practice Group.
China leads the financial accounting market in APEJ with an estimated market share of 42% or US$408.5 million in 2010. Looking ahead, the financial accounting market in China is expected to reach US$600.9 million by 2014, representing a five-year CAGR of 9.5%.
The strong demand is expected to come from SMBs as they automate their manual accounting processes, such as account payables, general/ledger, fixed asset accounting and financial reporting to improve their business efficiency in the organization.
Demand for such software in the enterprise segment is driven by the need for automation in the consolidation of accounts, greater transparency to meet financial regulation compliance such as International Financial Reporting Standard (IFRS), and the adoption of industry best practices to increase their industrial operational efficiency.
The other leading countries in financial accounting adoptions are Australia and India, counting for approximately 20% and 10% of the total market share in APEJ, respectively. Overall, these three key countries contribute close to 72% of the entire APEJ market.