European ERM services market to surpass $33 million by 2004, says IDC

AMSTERDAM — According to the latest research from IDC, demand for enterprise resource management (ERM) services picked up again from the second quarter of 2000 after a drop, due to the date-change, in the second semester of 1999. IDC predicts that this market will grow from over $12 million in 1999 to almost $34 million in 2004, representing a compound annual growth rate of 22.7% for the forecast period. Despite this solid growth, ERM services spending growth is not expected to reach the levels experienced in the years prior to 1999.

The three largest ERM services markets are Germany, the UK, and France, making up almost 60% of Western European ERM services spending. Given their predominance, it is unlikely that the rest of Western Europe will catch up in terms of spending. Likewise, the largest vertical markets are financial services, manufacturing, and government, accounting for 65% of total ERM services spending in both 1999 and 2004.

The market for ERM services is currently driven by three factors:

* Second wave ERM services – Second wave services encompass both ERM system fine-tuning, report creation, improved training as well as the implementation of additional modules and functionality, such as human resource and production planning.

* eBusiness – The emergence of new packaged applications-based solutions like customer relationship management, supply chain management and ecommerce is driving ERM adoption. As end-user companies plan their ebusiness strategy, they come to realize they must first invest in their ERM backbone to make the most of their ebusiness strategy.

* New forms of alliances – As a result of ERM services spending growth slowdown, the market for ERM services has become increasingly competitive.

Players in the ERM services space find themselves forced to compete and to differentiate their service offerings. Many new alliances are being formed among medium-sized companies in order to overcome any competitive barriers.

ERM Services: Creating the eBusiness Backbone (IDC#PS05G) analyses the main drivers and inhibitors of ERM services. It offers market sizing and forecast information for ERM services from 1999-2004, split by country and vertical markets. Furthermore a competitive assessment of the top 10 ERM service providers in Western Europe is provided and key success factors among providers of ERM services are discussed. This report is available to purchase from your local IDC office.

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