Driven by ever changing trade regulations and globalization, the worldwide market for Global Trade Management (GTM) applications is expected to grow at a compounded annual growth rate (CAGR) of 10.1% over the next five years. The market was $503 million in 2007 and is forecasted to be $814 million in 2012, according to a new ARC Advisory Group study.
Global "This is an interesting market where the growth of ERP suppliers with GTM solutions does not come at the expense of certain types of best of breed suppliers," according to Steve Banker, Service Director of Supply Chain Management, the principal author of ARC's "Global Trade Management Worldwide Outlook: Market Analysis and Forecast Through 2012".
ARC segments the GTM market into four solution types:
1. Customs and Regulatory Compliance
2. Trade Financing and Financial Settlement
3. Ocean/Air Procurement and Contract Management
4. Global Trade Visibility
Not ERP vs. Best of Breed, ERP Plus Best of Breed
Since ARC's last study on GTM in 2005, SAP has grown into, by far, the largest supplier in this market. Oracle is poised to enter the market and we expect their revenues to grow quickly as well. However, in contrast to other markets, ERP solutions will not kill strong best of breed suppliers. In short, ERP GTM growth does not need to come at the expense of best of breed suppliers; it can come in conjunction with them.
There will continue to be a need for the ERP GTM solutions to coexist with best of breed solutions. GTM must support the "3 Cs": compliance, content, and connectivity. The different platform/technology choices--SOA software, networked solutions, SaaS, and connectivity technologies--have different strengths and weaknesses when it comes to the "3 Cs".
This means it is not an "either/or" choice, these technologies must be used intelligently in conjunction with each other. In effect, this means that the ERP suppliers, who utilize SOA software to support complex compliance processes, will unhappily coexist in the same customer accounts with the best of breeds who have networked and/or SaaS platforms and are better at content and connectivity.
Further, with the ever-changing global trade regulations, staying on top of trade content is nearly an impossible task. ERP companies, with the exception of QAD who purchased the best of breed GTM supplier Precision Software, do not want to play in this sandbox. Developing software, not content, is their core competence. While there are trade content providers who do not have software solutions, and thus are not competitors to the ERP companies, their coverage is not global and is often inferior to best of breed GTM software suppliers in particular niches.
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