Vendors Moving to Aerospace and Defense Markets
Jakovljevic - February 21st, 2000
According to new strategic research conducted by Frost & Sullivan, "North American
Aerospace and Defense Enterprise Software and Service Markets,' total market
revenues totaled $1.33 billion this year, an increase of 7 percent over 1998.
As the Aerospace and Defense industry redefines business dynamics, enterprise
resource software and service markets are projected to experience strong growth.
While legacy system replacement will further warrant ERP implementation; system
expense, coupled with Y2K expenditures, are expected to inhibit market growth
in the short term. Hence, ERP companies are setting their sights on SCM markets,
adapting to Aerospace and Defense requirements, and improving systems' return
on investment (ROI)."
technology trends such as the Internet, electronic data interchange (EDI), and
extensible markup language (XML) are prompting enterprise software and service
companies to optimize process control applications and focus on manufacturing
and maintenance, repair, and overhaul (MRO),'' says Sermin Taber, an industry
analyst at Frost & Sullivan. "As aerospace and defense companies examine best
practices and re-engineer business processes, incorporation of new technology
will be imperative. By focusing on issues such as cost, maintenance, and obsolescence,
aerospace and defense companies hope to increase their overall competitiveness.
While ERP process control applications attempt to meet these needs, lack of
technical support and reluctance to adopt new systems still hinder market expansion.
Additionally, lack of qualified personnel and automated installation continue
to impede revenue growth. Important opportunities exist for companies that improve
their system and service ROI and institute technologically advanced protocols."
& Sullivan has identified the following companies as some of the participants
in the North American aerospace and defense Enterprise Software and services
market for the purpose of this study:
Access International Group
American Software Inc
Aspect Development Inc.
Cincom Systems Inc.
Computer Sciences Corporation
Dynamics Research Corporation
Ernst & Young LLP
Enhanced Systems & Services
Epicor Software Corporation
The Fredrick Group Inc.
Glovia International LLC
Hewlett Packard (Services & Solutions)
I2 Technologies Inc.
IBM (Global Services)
Intuitive Manufacturing Systems
J.D. Edwards & Co.
Lilly Software Associates Inc.
LPA Software Inc
PS Industry Inc.
Relevant Business Systems Inc.
SAP America Inc.
ShopPro Software Inc.
Smart Shop Software
Synergistic Computer Solutions LLC
TRW Inc. (Integrated Supply Chain Solutions)
TTW Solutions LTD
Western Data Systems
Xdata solutions Inc.
While this is certainly good news for sales starved vendors, they will also
have their work cut out for them. Those who can deliver solutions that satisfy
the exacting, stringent requirements of some vertical markets are in the driver's
seat to capture that market segment. As an illustration in this particular case,
A&D producers are typically high-tech or electronic manufacturers, and must
handle complex production processes and large, complex supplier networks. Sophisticated
customer order management applications are typically not required. Instead,
customer service needs are more oriented toward contract management and cost
reporting. Additional tracking and reporting requirements are another big issue,
to name but a few.
the Aerospace and Defense industries' dynamic needs will require ERP and SCM
vendors to improve ease of installation, ROI, interoperability, and service
support networks. Moreover, escalating competition in the aerospace and defense
markets will definitely make price a critical competitive factor.
The importance of a thorough, well-structured ERP software selection process
can never be over emphasized. Neglecting any of TEC's six parent ERP market
evaluation criteria (Product Functionality, Product Technology, Product Cost,
Corporate Service and Support, Corporate Viability, Corporate Strategy) can
result in a selection with disastrous consequences.
organizations currently initiating an ERP software selection are advised to
research the major ERP players in this niche, seek assistance in the selection
process from unbiased service providers, and base their decisions only on existing
functionality that the vendors are able to demonstrate during scripted scenario
sessions. 'Bolt-ons' should be selected only from official business partners
of the primary ERP vendor, after making sure that partnership is not a mere