Mixed-mode ERP Selection Projects: Who’s Buying?

The busiest knowledge bases in our Web site are those that contain information on enterprise resource planning (ERP) systems.

I analyzed the profile of business users who visit our Web site to create mixed-mode ERP selection projects, and examined how that profile has changed over time (much along the lines of my colleague Kurt Chen’s PLM landscape report).

I took the 2007 and 2008 calendar years into consideration for this analysis (2009 will be the subject of a separate analysis once the calendar year is complete, but the economic downturn and significant fall in ERP-related activities of business have of course skewed the numbers dramatically).

Mixed-mode ERP selection projects performed on our Web site are a good indicator of market requirements and future trends. Now, obviously there are certain limitations to this method, and the raw data needs to be analyzed in depth, but this approach does provide solid indications of what we can expect the buyer landscape to look like down the road.

Mixed-mode ERP Buyer Profile
From the ERP software point of view, we consider mixed-mode manufacturing to be a combination of discrete and process types of production, with business users drawn from industries where both types of manufacturing appear. Figure 1 shows the top six growth industries for online mixed-mode ERP selection projects (2008 compared to 2007).
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Figure 1. Mixed-mode ERP selection projects: top six growth industries

The picture of the annual revenue numbers for mixed-mode companies shows that small businesses are increasingly interested in ERP systems. This has been an ongoing trend, and 2008 is no exception (see Figure 2). Companies with less than $25 million in annual revenue demonstrate a significantly higher level of interest in this type of business software (with the number of selection projects being 17.2% higher in 2008). The second group, with revenue between $25 and $200 million, shows declining demand, but this fluctuation is tolerated by the margin of error for this graph. Demand is fairly stable for the upper segments—medium businesses and large enterprises increased demand by 7.9% and 2.0% respectively.
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Figure 2. Mixed-mode ERP selection projects by annual revenue

Figure 3 confirms this trend: small businesses are certainly demanding more attention from vendors. Indeed, companies with fewer than 201 employees showed a 14% increase in selection projects. The other segments are relatively steady, and fluctuate within statistical margins of error.
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Figure 3. Mixed-mode ERP selection projects by number of employees

Figure 4 shows mixed-mode ERP interest broken down by region.

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Figure 4. Mixed-mode ERP selection projects by region

In 2008, interest in mixed-mode ERP systems gravitated toward Asia (+25%) and Africa (+19%). The number of mixed-mode ERP selection projects in Asia exceeded the number of projects in North America.

I believe these statistics are good food for thought for mixed-mode manufacturing ERP vendors and for those who keep their eyes on the ERP market. Stay tuned for other buyer profile reports—and if you’ve got any questions, please leave a comment below.
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