New IDC Survey Reveals Front-Office Enterprise Solutions Are Most Active Market for New Purchases in Latin America

FRAMINGHAM, Mass., July 21, 1999 — Sales of front-office solutions such as customer relationship management (CRM) and sales force automation are leading the enterprise application market in growth in Latin America, according to a new study published by International Data Corporation (IDC). Back-office enterprise solutions of accounting/finance, HR/payroll, and order management/inventory control are the most mature enterprise application markets in Latin America. This study, based on a survey of more than 580 IT decision makers in Argentina, Brazil, and Mexico on various activities related to enterprise applications solutions areas and supply-chain management solutions, reveals the greatest percentage of new enterprise application purchases are occurring in the front-office followed closely by industry-specific (vertical) solutions.

"The strongest enterprise application growth in Latin America will occur in the customer relationship management and sales force automation market as organizations move from only back-office transaction management (accounting/finance and human resources) to front-office customer management," said Alex Manfrediz, an analyst with IDC Latin America. "Our results show back-office solutions have an average installed base of nearly two years and are in a replacement or expansion/upgrade phase as Y2K approaches."

Additional key findings from the enterprise application usage in Latin America section of IDC's study reveal customization requirements for enterprise applications vary. An overwhelming percentage of respondents (80% +) indicated they employed at least some degree of customization on their enterprise application solutions. Software investments represent the single largest portion of the total implementation budget; however, hardware and external services also represent significant portions. In addition, the survey shows Windows NT is the most frequently used operating system platform for all enterprise applications, followed by Unix, NetWare, and AS/400.

According to the results regarding supply-chain management (S-CM), more than half of all respondents either were not considering a S-CM solution or were unaware of its function or capability. Three-year growth prospects for the S-CM market in Latin America vary by country. Mexico respondents indicated the highest interest in adopting S-CM in the next 12 months (post Y2K) while Brazil's growth spurt appears to be two or more years away, and Argentina's remains relatively flat over the next three years.

Buyer preference across all industries, company sizes, and S-CM types (product or services) is for integrated solutions that automate both the planning and transaction processing while a significant portion of respondents indicated a preference for a S-CM planning-only solution.

Latin America's Technology Integration Panel Study (TIPS) ( http://www.idc.com/Data/LatinAmerica/factsheets/LATIPS.htm) is a demand-side research effort developed to understand major IT trends affecting small, medium, large, and very-large businesses in Latin America. On a quarterly basis, IDC Latin America interviews CIOs, MIS directors, and decision-making professionals in Latin America via a Web-based survey.

The current survey was conducted during the first quarter of 1999 and sampled a total of 587 companies in Latin America's three largest IT markets: Argentina, Brazil, and Mexico. This study, Latin America Enterprise Applications and Supply-Chain Management Solutions, 1999 (Volume 1 IDC #B19307; Volume 2 IDC #B19308) provides an analysis of enterprise applications and supply-chain management activities (application acquisitions, implementation budgets, and customization activity) from the TIPS survey. Results are shown by company size and industry.

The study is available for purchase by contacting Daniel Cardamone at 305-267-2616 or dcardamone@idc.com. For more information about IDC's Latin America Research programs, please contact either Beth Freedman or Lisa Bloom at 508-872-8200.

With a network of six country offices in Latin America and two regional offices – in Silicon Valley, Calif. and Miami – IDC provides full market coverage of PCs, mainframes, Unix systems and workstations, servers, desktop printers, professional services, local area networks, the Internet, telecom, RDBMS software, distribution channels, NT, and IT spending patterns in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. IDC also conducts primary research in Peru, Ecuador, Central America, and the Caribbean. International Data Corporation is the leading supplier of IT market information on Latin America.

About IDC

International Data Corporation is the information technology industry's most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world's leading IT suppliers as well as IS professionals in finance, insurance, entertainment, advertising, consumer goods, and publishing. IDC's research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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