A glimpse at the enterprise application landscape
Last year, AIIM, which now refers to itself as the “enterprise content management association,” commissioned Gartner to perform its invaluable annual worldwide industry study, the results of which were released to the press on May 1. Gartner surveyed 1,014 users of enterprise applications and 236 suppliers, from independent software vendors to service firms.
Gartner identified the enterprise applications as customer relationship management (CRM), enterprise resource planning (ERP), records management/archiving (RM/A), accounts payable/accounts receivable (AP/AR) and human resource management. Most of the companies interviewed (48%) were large, with more than 1,000 employees, while a third were medium-sized (100 to 999 employees) and 19% had fewer than 100 employees.
It’s worth noting that the survey was conducted in December, when the economic outlook was a bit brighter. Nevertheless, the conclusions are statistically valid. Gartner estimates the enterprise application market to double from $11 billion last year to $22.5 billion in 2004, with a compound annual growth rate of 19%. Gartner sees CRM growing the fastest rate (26%), with midsized companies growing at an even faster rate. It projects a robust 2001 for CRM vendors and believes enterprise CRM budgets will double this year over last. Gartner expects CRM vendor consolidations to continue, with larger companies looking to fill in market niches.
ERP is projected to grow at the slowest rate (15%) of the five enterprise applications. From its origins two decades ago, ERP is progressing into what Gartner calls ERP II, “which enables and optimizes enterprise and inter-enterprise collaborative, operational and financial processes,” the study states. Consolidation will continue, and vendors failing to embrace ERP II will be left in the dust, Gartner believes.
Gartner says the surveyed companies apparently don’t have a good grasp of pure RM/A because they tend to see it as including computer output to laser disc, imaging, document management, databases and paper storage. Nonetheless, 60% of them say they have a RM/A initiative in place, with another 23% expecting to implement one by the end of the year. Again, consolidation is anticipated, with document management vendors seeking to round out their offerings.
Gartner notes that 80% of the companies studied had an AP/AR system in place, either as part of an ERP initiative or installed independently. Another 5% are expected to have one by the end of the year. Forty-three percent of the small companies have stand-alone AP/AR applications; just 23% of large enterprises have one that is not part of an ERP implementation.
While 56% of the companies have installed a human resource management solution (32% as an ERP component) and another 10% plan to have one by the end of the year, a somewhat surprising 26% don’t plan to install one at all, Gartner finds, assuming the results can be attributed to HRM being performed at a central location. It further discovered that the full advantage of HRM has yet to be employed, but technology, including collaborative initiatives, are being developed to create an entirely new environment for human resource applications and practices.