Study: Tier II ERP solutions work well for manufacturers and distributors
Second tier ERP suppliers consistently meet complex industry requirements.
Sidney Hill -- Manufacturing Business Technology, 6/17/2009 9:08:30 AM
Tier II ERP suppliers are maintaining a strong presence in the manufacturing and distribution industries by consistently offering solutions that meet customers' complex business requirements, according to a recent study by Panorama Consulting Group.
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The study was based on online polling data and focus group interviews involving 670 individuals from manufacturing and distribution companies that have implemented ERP within the past three years.
The study confirmed that SAP is the leading supplier of ERP software, commanding 35 percent of manufacturing and distribution market, followed by Oracle, which controls 24 percent of the sector. However, it also revealed that Tier II suppliers have 27 percent of this market, which is even greater than the 23 percent share these vendors control in other industries.
"The study reveals that large Tier I ERP solutions are not the only viable options for manufacturers and distributors," says Eric Kimberling, president and founder of Panorama Consulting Group. "There are plenty of Tier II and industry-focused software vendors that can meet the complex requirements of manufacturing and distribution companies, especially those in the small- to mid-size space."
There are a large number of Tier II ERP suppliers. Some most well-known names in this group are:
• Infor;
• Epicor;
• QAD; and
• IFS;
The Panorama Consulting Group study also includes details about manufacturing and distribution ERP implementations.
"The average implementation duration for manufacturing and distribution companies is 19 months, compared with 20 months in other industries," Kimberling says. "These companies take an average of 4 months to conduct their evaluation and selection process, and an average of 15 months to complete the processes of fully implementing their ERP solutions."
The study also shows that manufacturers and distributors experience an average total cost of ownership of $8.2 million, or 8.6 percent annual revenue. Companies spend almost 23 percent of their total implementation budget on business implementation costs, including third-party consulting fees.
"In today's evolving business environment, manufacturers and distributors have a great deal of opportunity to leverage ERP to enhance revenue, productivity, and overall effectiveness," Kimberling adds. "ERP solutions can help companies increase operational efficiency, coordinate global supply chains, and modernize their warehouse and logistics functions."
This study also includes insight into implementation variables and common pitfalls of ERP selection and implementation.
More details from the study are available on the Panorama Consulting Group Web site.
