TEC Research Analyst Roundtable: Predictions for 2011

  • Written By: TEC Staff
  • Published: December 16 2010

It’s that time of year again for TEC’s analysts to polish their crystal balls and spread their tarot cards to gaze on the future of enterprise software for 2011.

Aleksey Osintsev, Research Analyst—Enterprise Resource Planning

The growing interest of businesses of all sizes in so-called cloud technologies in general and in on-demand—cloud or software as a service (SaaS)—enterprise applications is the current reality, and this trend will escalate. To be honest, manufacturing and distribution C-level and information technology (IT) managers and decision makers are turning to this software delivery model much more rapidly than I expected a year ago. More and more manufacturing and distribution software vendors offer SaaS, cloud, or combined versions of existing products to their customers, and this is a good thing. Increased competition will stimulate unfussy and well-defined deal conditions, and SaaS-based software utilization good practices may become standard. Lesser ambiguity and fewer hidden expenses in cloud-based options will surely be appreciated by businesses. One potential SaaS concern: Another IT-related bubble, with everybody rushing for the cloud for its obvious benefits but without understanding the inevitable kinks of this software delivery method for any particular business.

Being a firm proponent of the lean model of manufacturing, or in any business area, I can’t ignore it in my predictions. Aiming for more efficient paradigms for operations, all nature of businesses are arriving at the same answer and beginning to seriously accept lean principles across the spectrum of their day-to-day activities. This year will see the relationship between the lean business approach and enterprise software models further develop, especially in view of SaaS and cloud computing expansion. Having declared that lean standards are embedded in their software applications, many enterprise resource planning (ERP) software vendors did not in fact go beyond kanban, and few other lean technique functionalities are included in their offerings. True lean-compatible enterprise software would require many traditional business processes to be revised, for example, using material requirements planning (MRP) as a planning tool or lean accounting for managing finances and costs. The lean prediction: A wider acceptance of a true lean model by more businesses and, consequently, a wider selection of smarter lean-based enterprise software offerings on the market.

Gabriel Gheorghiu, Research Analyst—Customer Relationship Management, Enterprise Resource Planning, Enterprise Asset Management

I see 2011 as a year of transition, not only because one of the worst financial crises in history is not yet over, but also because we have experienced over the last few years an explosion of new technologies and it will take us some time to incorporate them into our day-to-day lives.

In customer relationship management (CRM), cloud, mobile, and social media will continue to be the main trends. Social CRM is still young and perceived by many as just another channel by which to hunt for customers, not as a strategy for improving relationships with them. For traditional CRM: The new version of Microsoft Dynamics, with options like cloud development, online solutions catalog, and contextual document management, seems to be a lot different from anything Microsoft has offered before. Worth following in social CRM: Nimble and Xeesm.

In the ERP space, Plex will probably still dominate the SaaS segment for manufacturers. Epicor will surely have an important impact on the market with its version 9, but probably more as an on-premise solution, unless its cloud issues are fixed. Vendors like Workday are trying to build a new type of ERP, which is basically built around human resources and financials—though not targeting manufacturers or distributors, this type of solution may be a good competitor for traditional ERP for services vendors.

For enterprise asset management (EAM), companies seem to better understand the importance of maintenance management, mainly because the financial crisis showed that cost-related issues should not be taken lightly. This is why software vendors are going beyond traditional EAM functionality and offering performance management to help companies not only manage but also predict the cost of their assets and adapt to fluctuations in their activity. Watch: Vendors like Meridium and Ivara.

An across-the-board trend: Vendors will increasingly create products for specific requirement that are not well covered by existing vendors. For instance, Avature offers a mix of recruiting and CRM, Kana offers service experience management. We’ll see more of this as companies try to fill in the gaps created by the large vendors.

Jorge García, Research Analyst—Business Intelligence, Business Performance Management

In 2011, the business intelligence (BI) space will be fully immersed in moving to the cloud. Many software providers who do not already have SaaS BI solutions available will be offering this new option to its customers. Many customers will be seriously evaluating the possibility of migrating their BI applications to the cloud, as vendors improve their SaaS applications and service level agreement (SLA) companies rely more on SaaS BI providers to analyze their information.

The growing mobile BI trend: The deployment of BI solutions with mobile functionality features, which will be an additional impetus for using BI solutions. Expect strong collaborative functionality features and specific capabilities for analyzing unstructured content and data coming from social media sources. Collaboration, mobility, and self-service capabilities will promote the individualization of BI applications.

Fierce competition in big data analysis: Software companies will vie for bigger market segments, whether by using new technology frameworks acquired from other companies or by improving their already existing products in terms of performance and usability. BI applications will continue to be more user-centric and less technical.

Kurt Chen, Research Analyst—Product Lifecycle Management

The year 2010 in the product lifecycle management (PLM) space has seen some exciting undertakings: social product development, computer-aided design (CAD) interoperability enhancements, PLM moving closer to the cloud, better supports for design and engineering decision making, and more. Although there were various approaches behind this year’s events, connectivity is a common thread, and it will become an even stronger theme in 2011.

Connectivity among processes: PLM will become a more powerful platform, serving as a hub for various parties and allowing a broader range of business processes to connect to each other. Ideation, portfolio management, manufacturing process management, and supply chain collaboration will have increasing priority in PLM adoption.

Connectivity among disciplines: The growing adoption of system engineering (as well as improved software functionality) will help mechanical, electronic, and software engineers work more closely together in the conception phase. In the area of detailed design, 2011 will likely see more collaboration between mechanical CAD and electronic design automation (EDA) vendors.

Connectivity among people: We may continue to hear negative opinions against PLM’s ability to incorporate social aspects—for example, when massive social input isn’t well handled or issues related to intellectual property are not properly addressed. However, people connectivity is undoubtedly the way to go, and I’m expecting to see new and innovative tools that help link PLM users.

Sherry Fox, Research Analyst—Human Capital Management

In the area of human resources management (HRM), my prediction is that more software vendors in this space will begin to offer SaaS models than ever before. With the issues of data security diminishing (through improved product capabilities), more organizations will be looking toward adopting the SaaS model of HRM in the coming year. Regarding human resource outsourcing (HRO), as more and more businesses are expanding their operations globally, many organizations are accelerating their software buying initiatives around a multi-country payroll outsourcing (MCPO) model. The bottom line: More companies in 2011 will put faith in vendors and service providers to directly deliver their HRM needs, allowing them to focus on their core responsibilities.

In the area of learning management (LM), I believe mobile learning is going to be the biggest thing in 2011—right alongside social learning through the use of new media. With new mobile applications hitting the App Store daily, everything from learning your ABCs to understanding the intricacies of the human brain—and everything between—will be available for download. Collaboration tools such as Adobe ConnectNow, MobileActive.org, Google Docs, Twitter, Facebook, and internal company wikis, as well as portable digital devices such as Android, Blackberry, and iPhone smartphones, are becoming more readily available to and affordable for the mainstream. Google Apps for Education alone is used by more than 10 million students worldwide. Microblogging and text messaging, conducting research, and analyzing trends are just a few of the things that we can do today with these tools and devices. This rapid access to data, available wherever and whenever questions arise, is changing our learning landscape and altering the way we solve problems. The bottom line: Mobile and collaborative learning devices and tools will open up a whole new world of opportunities for people to learn in a highly effective and efficient manner.

P.J. Jakovljevic, TEC Principal Analyst

I concur with the cloud/SaaS deployment, mobility, social media, and consumerization of IT themes stated in this post. SaaS will increasingly defy the misconception that it only covers fringe departmental functions or smaller enterprises. Companies/products such as Plex Online, SAP Business ByDesign, Epicor Express, NetSuite, etc. will increasingly sell into larger organizations (which salesforce.com and SuccessFactors have long been doing departmentally) as we see complete ERP replacements for true multi-facility, multinational organizations will increase in the SaaS model.

Users' instant gratification, i.e., zero training and quick payback, will continue to be emphasized. The public cloud vs. private cloud debate and hybrid apps (on-demand and on-premises software coexistence) will continue as well. IBM acquiring Cast Iron Systems and Dell acquiring Boomi testify to the latter point.

Considering quote-to-order (Q2O) e-commerce vendors, their next frontier is verticalization and much of their functionality is likely to be subsumed by ERP, CRM and/or PLM vendors. However Q2O vendors may extend their staying power by harnessing business intelligence (BI) and predictive analytics to discern, for example, which product variants/options are the most profitable, what sells (and will sell) best in which demographic segments, rationalization of stock-keeping units (SKUs), components, etc.

On the retail SCM side, it will be important to watch whether shelf-level SKU forecasting and pricing optimization (promotions) can more positively be extended to multi-echelon upstream supply chains inventory optimization (IO).

Finally, it will be interesting to watch Microsoft in 2011, since it finally (and strangely) looks like an underdog vs. Google, Facebook, Apple, and Salesforce.com. It will also be interesting to watch how Oracle, IBM, HP, Dell, and SAP will also position themselves along the lines of major infrastructure (platform) providers.

Your Predictions

Are the TEC analysts far off the mark? What do you think is the trend to watch next year? Share your thoughts on where you think enterprise software is going in 2011!
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