2011 ERP Slowdown. Will PLM Gain Benefits?

2011 ERP Slowdown. Will PLM Gain Benefits?

I read the article in Yahoo News – ERP investments to slow in 2011. According to the Forrester research, many companies are holding back their plans to run ERP implementation. Also, many companies are running ERP systems that two releases back from the current release. Here are few interesting quotes:

The number of companies planning to invest in their ERP (enterprise resource planning) systems will drop slightly this year, according to a Forrester Research report, even as IT spending overall is expected to rise.

Roughly half of ERP customers are running product releases that are two versions behind the current one, according to the report. But expiring support windows and related price increases will spur more upgrades over time.

I found it interesting. My hunch, customers are reluctant to make huge investments and big implementation plans. They are more interested in what Enterprise 2.0 and multiple Web Technologies and Social initiatives can bring. The time for huge ERP programs is going to end. Therefore, the appearance of Oracle Fusion Apps this year will be specially promising. Will it be able to pump a new air into ERP implementations?

At the time ERP can be troubled, what will happen to PLM mind share vendors?  Vendors like Dassault, PTC are rolling out huge programs with new releases and features. At the same time, customers are getting “cold feet” when thinking about a grandiose move to platforms like V6 (Daimler case).

What is my conclusion? My view is that customers are stopping believing in big programs and multi-year investment in enterprise programs. ERP is associated with such a level of programs. End of the story, in my view. The new way of business making a-la salesforce.com is coming. So, it reflected in customer decisions. In the past, PLM vendors got to think about taking some market from ERP folks. It sounds like time is coming. What is your view?

Best, Oleg


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