|
|
|
|
|
IDG Connect-Sage report sees Mideast SMEs waking up to ERP’s potential
Published Sep 9, 2014
|
Demand for enterprise resource planning (ERP) software among small and medium enterprises (SMEs) will likely account for a significant portion of the projected US$4.3 billion software investment in the Middle East by 2016, according to the latest survey conducted by IDG Connect, a subdivision of research, technology media and venture capital firm IDG, on behalf of Sage Group, a multinational enterprise software company.
The forecast comes as more and more organisations in the region recognise the benefits that business management solutions bring to their bottom-line growth. Outlook has been relatively bullish as the report reveals that 77% of Middle East respondents expect to deploy ERP solutions within nine months, compared with an average ERP implementation duration of 17.8 months in the United States (based on an independent Panama Consulting Solutions survey published in February 2013).
“ERP solutions have traditionally been seen as the premise of large companies, but many SMEs are beginning to identify specific tools and applications which may help them streamline their commercial operations,” said Keith Fenner, Senior Vice President Sales – Sage ERP Africa and Head of Sage Middle East.
As a result, many ERP vendors are now actively targeting the SME segment by offering more cost effective, modular software packages that provide the opportunity to buy in basic ERP functionality then add extra tools and features as the business grows and/or through the use of cloud based, on demand software licenses, Keith Fenner added.
Micro, small and medium enterprises (MSMEs) are considered the backbone of the Middle East and North African (MENA) economy. The International Finance Corporation (IFC) estimates that majority of enterprises in the region are MSMEs at around 19-23 million (both formal and informal) in number and comprise about 80-90% of total businesses in most countries.
“These figures alone speak of the huge potential that this segment has to offer in boosting ERP solutions adoption rate in the wider MENA region,” Keith Fenner said.
ERP has the ability to improve overall productivity and task management by reducing potential errors, offering faster access to data and speed up everyday business transactions through automated workflows. Its usage incorporates all areas of business, spanning not only horizontal departmental roles (finance, sales and marketing, human resources, supply chain and operations), but also a host of vertical industries – traditionally focused on manufacturing, distribution, retail and professional services.
In recent years, ERP has also expanded to encompass aerospace and defence, government and public sector, education, healthcare, transportation, utilities, construction, hospitality, mining and agriculture as ERP suppliers sought to custom-fit their packages for more specialist markets.
MIDDLE EAST ERP VENDOR LANDSCAPE
The IDG Connect-Sage report collected responses from IT managers based in Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the UAE – around 35% of these managers represent the SME sector or companies with 100-250 employees.
The survey reveals that the Middle East has its own unique ERP vendor landscape and uses a wider range of applications compared with broader global market trends.
“This diversity is illustrated by other ERP applications adopted amongst mainly SME respondents besides Oracle, Microsoft, SAP, Sage, Focus Softnet and Infor including Ramco, Pioneer Business Systems, Pegasus Opera 3 and Amthal Optimum,” the report noted.
Around 14% of companies also rely on purpose built or in-house ERP systems as well as bespoke solutions that may be built or tailored to run on specific software platforms from third party vendors (IBM for example), or have no ERP system at all (6%). The finding highlights the extent of the nascent sales opportunity for dedicated ERP vendors able to prove the value and applicability of specialised ERP applications to organisations of all sizes in the region.
The report indicated that most departments in the region already have a high usage rate of ERP software, as shown by 88% of accounting and finance, 77% of procurement and inventory, 65% of sales and marketing and 63% of operations, reflecting corporate perspective on embracing ERP as mission critical systems in their core business function.
Ease of use and an intuitive interface that matches individual roles or specific task within the business function has been rated the single most important feature of an ERP suite by respondents, with training and support materials also scoring highly.
“These factors are especially true for smaller companies who may be making their first investment in commercial ERP software during upgrades from spreadsheets or in-house solutions, with second time buyers tending to place more importance on support and documentation resources,” the report noted.
Overall, the survey highlights the fact that ERP can no longer afford to be complacent, said Keith Fenner.
“The competitive commercial landscape of the Middle East, combined with the rapidly evolving IT market, demands constant adaptation and innovation in the fight for market share. This is especially true as ERP and cloud computing steadily revolutionise the way businesses operate.”
Posted by
VMD - [Virtual Marketing Department]
|
|
|
