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24 Chapter 1 • Introduction to Enterprise Systems for Management

outsourcing for a number of years, small and medium-size companies have only recently come to
rely on outsourcing partners for a majority of their IT support. Globalization has impacted ERP
systems in many ways. First, a majority of ERP vendors are global. SAP, Oracle, Microsoft, and
others have support offices and development teams spread around the globe. Second, large ERP
implementation consultants have global offices and staffs to help clients in ERP implementation
projects all over the world; several consultants are emerging from countries like India. Finally,
software leasing or Software as a Service (SaaS) is an emerging model for outsourcing for many
companies that do not want to invest large amounts of money on in-house ERP implementations.
Ethics and security are other areas that have attracted a lot of attention. There has been a wide-
spread increase in corporate white-collar crimes such as unscrupulous accounting and marketing
practices, privacy violations, unauthorized data sharing, spam mail, viruses, snooping, phishing, and
identity theft. All these unethical practices have indirectly impacted ERP systems due to their
centrality in organization and direct integration with the database. Compliance management due to
such regulations as the Sarbanes–Oxley (SOX) Act and the Health Insurance Portability and
Accountability Act (HIPAA) are fast-growing software support areas, and several ERP vendors have
started providing software modules or tools to support compliance management.
Along with additional modules, organizations are implementing security services to manage
access and control in ERP systems, and they are developing awareness programs across their
organizations to help staff and management understand the seriousness of security breaches within
an ERP; however, security unfortunately remains an afterthought. The seamless integration of ERP
software only increases the risk of both hackers who break through perimeter security and insiders
who abuse system privileges to misappropriate assets through acts of fraud. The ERP world
requires a new way of thinking about security, namely, about business transactions that inflict
financial losses from systems-based fraud, abuse, and errors, and not just the bits and bytes of
network traffic.

ERP VENDORS
The ERP software market has experienced tremendous growth in the last decade, even after analysts
7
had predicted its early demise in 1990s. The Global Industry Analysts, Inc., analyzed ERP software
market worldwide (North America, Europe, Latin America, Asia, and rest of world) by revenue and
application type. They predict that world market for ERP software will reach $67.8 billion by the year
2015, dominated by North America and Europe, from the $36 billion in 2008. Tight budget amid the
global economic crisis forces the enterprises to remain more accountable toward spending on business
process and applications. The focus has now shifted toward reducing the operating costs, implemen-
tation time, and the cost of maintenance of the ERP system. In turn, the vendors too are concentrating
on the smaller projects that result in quick returns, rather than on longer ones with higher implemen-
tation periods and delayed payments. In turn, the enterprises are now opting for single application
systems over multiple systems, in order to save on costs and bring in more functional efficiencies.
Key players dominating the global ERP software market include ABAS Software AG,
CDC Software Inc., Consona Corporation, Epicor Software Corporation, Industrial and
Financial Systems AB, Microsoft, NetSuite Inc., Oracle Corporation, Plex Systems, Inc., QAD
Inc., Ramco Systems, The Sage Group plc, SAP AG, Unit 4 Agresso NV, and Visma AS, among
others. This vast market can be grouped into three tiers as shown in Table 1-2 below. Tier I

7 Global Industry Analysts. (April 2010). ERP Software: A Global Strategic Business Report. www.StrategyR.com, 562.