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Home » To ERP or Not to ERP in Central Eastern Europe?

To ERP or Not to ERP in Central Eastern Europe?

March 9, 2012
SupplyChainBrain

Central Eastern Europe is an increasingly attractive market for ERP technologies. While countries comprising this region have many local specifics, they are common in that their economies have been recently undergoing rapid modernization and/or transition in an effort to improve performance, increase economic competitiveness and more fully integrate into the European and global economic systems. This process has meant significant restructuring and modernization across industries, which has included taking a new look at the enterprise software automation requirements.

Systemic transformation within many industries and supply chains has meant a steadily growing relevance of ERP technologies, which are necessary in many industries in order to obtain adequate operational efficiency and regional or global business competitiveness. CEE countries that are already part of the EU (Poland, Hungary, Czech Republic, etc.) are ahead of the curve in the number and scale of implementations compared to their CEE neighbors, with vendors such as SAP, Oracle, Infor, Sage, QAD, etc., holding strong market positions. In Russia and Ukraine, the choice of a vendor often depends on whether a company is publicly traded and whether it is integrated or trying to further integrate into the European or global markets. In such cases, companies tend to select well-known global ERP vendor solutions, which ensure adherence to global process and quality standards. In the case of non-publicly traded mid-sized businesses, companies tend to favor either lower-cost solutions from local vendors or moderately priced solutions from foreign vendors. At the same time, the number of local ERP vendor solutions in CEE has been growing over the past decade. It is also more common for Russian and Ukrainian companies to adopt in-house developed IT systems, since the business philosophy is still entrenched that the total cost of ownership of such developments is lower. This is caused in part by the absence of benchmark data on deployment costs at similar enterprises.

In recent years, global ERP vendors have begun to establish or intensify their presence in the CEE market. This trend can be illustrated by a number of examples, including:

• In June 2011, QAD announced the availability of QAD Enterprise Applications 2011 Enterprise Edition in CEE.

• In November 2011, Sage announced that it would expand to several new CEE countries: Romania, Slovakia, Hungary and the Czech Republic. The company also previously launched its ERP solution in Russia.

• In 2010, UNIT4 N.V., The Netherlands-based provider of ERP software, acquired Teta S.A, a Polish ERP and HR software provider, after competing with Sage during the bidding process.

• SAP and Microsoft already hold strong positions as ERP vendors implemented by large Russian companies in various sectors.

• SAP, IFS Applications, QAD and Baan hold strong positions in ERP implementations among large enterprises in Poland.

• SAP and Oracle hold strong positions in the ERP market in Romania.

                                      The Outlook

In 2012 and beyond, the CEE market for ERP software is likely to continue to strengthen, with competition intensifying among the global and local software vendors.  With more choices of available solutions, local end user companies will need to increase their efforts to conduct proper analysis of total cost of ownership of different solutions and approaches to automating their core information management processes.


Keywords: ERP & Enterprise Systems, Technology; Europe, Poland, Hungary, Czech Republic, Romania, Slovakia, Hungary, Russia, Enterprise Resource Planning Systems, QAD, Microsoft, SAP, IFS Applications, Baan

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ERP & Enterprise Systems Technology High-Tech/Electronics Europe
KEYWORDS Baan Czech Republic Enterprise Resource Planning Systems ERP & Enterprise Systems Europe High-Tech/Electronics Hungary IFS Applications Microsoft Poland QAD Romania Russia SAP Slovakia Technology Technology; Europe
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