Russian ERP market will show growth

In 2021, IT spending worldwide will increase by 8.4% to reach $ 4.1 trillion, Gartner predicts. For comparison, in 2019 the volume of the global IT market grew by only 0.5%.

The pandemic, lockdown, and the shift to telecommuting have pushed business leaders to pursue digital transformation projects faster. Most of the CEOs of large companies interviewed by McKinsey analysts recognized that technology today is a critical component of business, and not just a tool for increasing the economic efficiency of the enterprise.

Moreover, the main focus is on core applications, in particular, ERP. Companies have accelerated the digitization of internal operations and supply chain management by three to four years, according to a global McKinsey survey. In a pandemic and telecommuting environment, organizations are shifting their focus towards providing a more flexible work environment for employees.

In addition, due to economic instability, managers are concerned about the issue of transparency of business processes. They realize that it is ERP that creates the basis for the further digitalization of large businesses.

In Russia, the situation is similar to the global one. So, at the end of 2020, the leading positions in the corporate software segment in the country were taken by SAP and 1C, the key vendors of ERP solutions in the domestic market.

ERP systems are still the most in demand in the production area – Russian manufacturers provide more than a third of all implementations. ERP is also popular in the segments of information technology, professional and financial services, wholesale and retail trade.

Moreover, most companies have already implemented ERP in one form or another, and now they are scaling, updating systems, migrating to the clouds and replacing foreign systems with Russian software. The latest trend is associated with the current import substitution policy.

In addition, many customers are trying to increase the functionality of an already operating IT infrastructure without completely reinstalling it. To do this, they integrate the ERP installed in the company with tools for business process management, robotization and big data analysis. This allows the business to save on expensive and time-consuming ERP modernization projects.

Dmitry Kichko, General Director of Edith Pro Group of Companies, believes that despite the economic downturn, the ERP systems market will show steady growth in the next few years.

“The pandemic only spurred the digital transformation of many Russian companies. Despite the fact that in the first half of 2020 a number of projects were frozen or postponed due to a lockdown, by the end of the year the demand for enterprise management systems had completely stabilized and returned to pre-crisis indicators. it is estimated that in 2021 the market volume will increase by at least 10-12% in monetary terms, “Dmitry Kichko believes.

At the time of the start of the pandemic, the market was estimated at about 57 billion rubles, but the decline due to the impact of the situation with COVID-19 was quite noticeable. On the other hand, the implementation of ERP is a serious investment project, so the downturn in 2020 is more likely not canceled, but postponed projects, Dmitry Kichko emphasizes. Therefore, Dmitry Kichko estimates the market growth by 10-12% by the end of 2021, which is higher than the previously recorded rates. At the end of 2021, the market size estimate at 63-64 billion rubles looks fair.

Traditionally, ERR solutions are a business involved in active interaction with partners, managing a certain amount of tangible assets: warehouses, production sites, branch network, etc., notes Dmitry Kichko. Also, ERR solutions are needed by everyone who deals with supply chains. With the development of e-commerce, government systems for monitoring and accounting for products, an increasing number of participants from various fields are involved in them, which is reflected in the ERP market.

The leaders in the adaptation of ERP systems can be called the manufacturing sector, mining companies (about a third of all projects), trade (15%), also actively introducing ERP healthcare (5%) and the financial sector (14%). This is due to the expansion of the functionality of solutions of this class, emphasizes Dmitry Kichko.

“The pandemic and the crisis led to the optimization of the work of many companies. The demand for effective digital solutions in general, and for ERP systems in particular, has increased. The main barriers today are the cost of projects and human resources. The lack of competent specialists leads to the fact that demand outstrips the capabilities of integrators. for the implementation of projects. If not for these restrictions, the market growth would have been more serious. We record a large number of requests for the implementation of ERP “, – said Dmitry Kichko.

Russia is ahead of the world average – we are catching up with the world, growing faster due to the low base effect, Dmitry Kichko emphasizes. This has a serious plus: we are introducing new, most advanced systems, while companies in developed countries have a baggage of outdated or outdated ERP systems. Growth rates will continue due to positive examples of ERP implementations. The more ERP solutions are implemented, the more trained experienced specialists will be at the disposal of system integrators who will be able to better respond to the growing market demand, Dmitry Kichko believes.

Chief Information Officer Groups T1“Pavel Shulga notes that a characteristic hAt the heart of the modern economy is a pronounced cyclicality: after a fall, there is always a rise. Companies have learned to live in this saw and pass the waves with the least loss. During crises, resources are released, and companies have a resource to launch a transformation company or digitalization program.

ERP implementation is a marathon. You can’t just come to the start and try to run it – the result is predictable. It is necessary to prepare for the marathon – to bring the athlete to maximum condition at the time of the start. The situation is similar with companies: those that quickly recovered from the shock of lockdowns and found their bearings in the situation, using the crisis to their advantage, prepared and defended digitalization / digital transformation programs and have now moved to the implementation stage of these programs. Accordingly, the need for IT specialists will also grow. Moreover, the further, the competition for the employee in the market will only grow.“, – emphasizes Pavel Shulga

Deputy General Director of the Group of Companies “Corus Consulting Ksenia Rodnova notes that the Russian ERP market in 2021 will grow by 10-15%, and it feels like it could grow even more. There are all the prerequisites for this: Russian business has accelerated digital transformation projects, and the demand for optimization and restructuring of processes has grown especially noticeably. The main reason that hinders more active growth is staff shortage. There is a shortage of consultants on the market who could carry out ERP projects with high quality.

ERP has always been a critical element of business, but today the need has increased due to the market situation, Ksenia Rodnova emphasizes. The pandemic has changed many industries: weak players left the market, strong players strengthened their positions, increased their share. It is important for them to ensure the optimal process flow, transparency at all levels of the business, and high speed. This cannot be done until the basis – the accounting system – does not provide reliable and high-quality information about the main operations. ERP has been and remains the core of transformation for many industries. In addition, many companies are scaling, diversifying their activities, launching online channels, modernizing the technological environment, creating digital ecosystems. All this also requires changes to the basic accounting system.

One of the most tangible barriers to growth is the scarcity of IT professionals. There is a serious struggle for personnel in the market, and the need for competent consultants continues to grow. The second barrier, which is felt primarily by the business, is the lack of IT companies capable of analyzing the strategic goals of the business, drawing up an IT strategy and a competent project roadmap, working out a methodology, optimizing processes, and only then starting automation. This approach allows you to achieve the very efficiency that everyone is talking about, while maintaining the optimal cost of ownership of the IT landscape“, – says Ksenia Rodnova

The drivers are increased competition, restructuring of business models – companies are paying attention to omnichannel, expanding sales channels, opening new types of activities, notes Ksenia Rodnova. Import substitution continues to provide the market with new projects – this is one of the reasons for the strong growth of domestic software, in particular, 1C

The time to market indicator is becoming important. Since ERP implementation is a complex and not always fast process, companies are increasingly demanding for box-based solutions or low code systems (an approach to creating applications that practically does not require writing software code). When deciding to change the accounting system, the business faces the question – to invest in a new ERP or to create business applications around the existing platform that will quickly cover current needs. There are many pitfalls in this matter, and in order to make the right choice, the business needs expert support from IT.“, – notes Ksenia Rodnova

Traditionally, among the number of ERP systems, the entire commodity distribution chain is in the lead – retail, distribution, online trade, emphasizes Ksenia Rodnova. But now manufacturing companies are actively implementing ERP projects. Most industries today are involved in digital transformation in one way or another.


Karice Dabule

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