Baan South Africa achieved a 40% growth during 1998, but expects as little as a 5% to 15% increase in the overall market in 1999, says Gary Lawrence, MD of the company.
This is in line with international expectations, where analysts are predicting a slow-down in overall ERP sales in 1999, partly due to enterprises setting aside all their IT resources to plug the year-2000 holes.
Globally, poor financial results and falling share prices, due to tangled finances and acquisitions, are also damaging sales. It's not only Baan that has suffered losses. Supply-chain automation vendor Manugistics has announced it will restructure and cut staff with the hope of stopping the mounting losses of the past few quarters. Even the biggest ERP vendor SAP reported 1998 results that were below expectations, while both SAP and PeopleSoft have seen their stock prices tumble.
Lawrence believes 1999 will be aberrant because of the Y2K problem. "Many organisations have missed the boat in terms of changing systems and will now patch their existing systems, " he says. "They will take a wait and see approach to Y2K and move in 2001. As a result, I think 2001 will once again see our market space showing significant growth with the extended enterprise concept, the Internet and e-commerce driving growth."
Baan will be restructuring in a bid to become a multi-product provider, after several niche software company acquisitions during the past year. Offerings include supply chain, e-commerce, corporate finance and remote services.
ERP is very much alive, however. "Front office, supply chain tools, etc, are certainly sexy and sizzling, and promise significant benefits to the customer. However, these benefits are only possible on the back of an ERP system," says Lawrence. "I think ERP has and will continue to provide phenomenal benefits for those customers that get it right and is key to most organisations` strategies in meeting tomorrow`s challenges."
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