Cost Estimate and Accounting in ERP
February 12, 2025
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During 1990, ERP market was dominated by few vendors namely SAP, BaaN, Oracle, People Soft and JD Edwards, who were also known as big five of ERP market. The market was, then, was growing at compound rate of approximately 35%. Fortune 500 companies were the major customers.
Key focus of ERP vendors, during that period, was to expand functional scope of their product and provide sharper vertical focus. Manufacturing made up for the largest segment of ERP spending.
IT spending as a whole slumped after the collapse of internet bubble and 9/11 terrorist attack,. Market for ERP also saturated for fortune 500 companies. ERP vendors started to face financial difficulties. ERP market went into an upheaval and following trend emerges:
SSA Global was later merged with Infor, which was supported by a large private equity company. J. D. Edwards was merged People Soft which in tern was taken over by Oracle through a hostile takeover.
The market thus got segmented into tier 1 (large organization), Tier 2 (medium organizations) and tier 3 (small organization).
Major ERP vendors started offering products for lower end of the market either through extension/rationalization of their products or through acquisition.
ERP vendors were also diversifying their product to different verticals. Whereas, manufacturing provided the major chunk of their revenue, the focus area turned to retail, public sector, utility, financial sector, and telecom.
The explosive development of internet made possible seamless web based collaboration by organizations with their vendors and customers, such as “mySap.com” solution from SAP and e-business suite from Oracle.
R/3 software gives an option of around 1000 pre-configured business processes. This solution is available in all major currencies and languages and can be hosted on several Operating Systems and Databases.
As mid market option, SAP has brought out, Business All in One, a solution with industry tailored configurations. SAP offering for smaller organization is SAP Business One. SAP offers a hosted solution, namely SAP Business by Design, for organizations lacking IT resources.
It is the first to implement internet computing model for developing and deploying its product.
Oracle also took over various ERP solution providers during 2000 such as People Soft, JD Edwards, Retek (retail industry solution), and Siebel (customer relationship management software). It has taken up project Fusion (based on Service Oriented Architecture) to integrate various products, outcome of which is keenly awaited.
Its acquisition of SSA global during 2006 made it a forerunner as ERP solution provider.
SSA global had two strong product lines, BPCS and BaaN. SSA also made a number of other acquisitions, such as MAPICS, Lily Software Associate and GEAC. SSA is focused on building, buying and integrating best of breed solutions.
Microsoft is much dependent on channel partners, not only for sales and consulting but also for add on development. Their solutions are closely integrated with their office suit.
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