IBM has today launched what it believes is a network delivered one stop service for the delivery of ERP functions to medium sized businesses.
The company said it is partnering with leading ERP software package suppliers to design, implement and support ERP applications, accessible online by customers but hosted by IBM.
The service will support financial, human resources and manufacturing business applications from selected ERP vendors including JD Edwards, SAP and Peoplesoft and IBM said it is currently in discussion with other vendors over the inclusion of customer relationship management (CRM) and supply chain management packages.
Companies are provided with a chosen mix of consultancy, systems, software licences, network service, service delivery to an agreed service level, training and support for a monthly fee.
According to Nik Nikerson, IBM executive for ERP services in northern Europe, the new service will make automated business management an affordable option for a broader range of companies.
"Every time we talk to small and medium sized companies about having ERP solutions implemented, they say they can't afford it as there is a considerable amount of up front costs. We want to make the information within the ERP space as available to the small and medium business space as any other utility like telephone or electricity," he said.
Nikerson said IBM will host the service, supplying it over a secure private network direct to the client company. Customers will have a single contract for their own tailored solution and will pay a monthly fee.
"With a monthly fee, customers will not need to spend millions in the initial implementation, it increases their available cash flow. The apps for rent concept allows them to plug into the business functions they need with no worries about training investment and keeping up with technological changes," he said.
Costs will vary depending on the requirement, but basic pricing starts at between £180 and £200 per seat per month.
According to a Gartner Group report published last month, in the UK the ERP outsourcing market will grow at a compound annual growth rate (CAGR) of more than 42 per cent, to be worth $925 million by 2002.
Gail Baglow, director of Gartner Consulting, predicted a boom in the ERP outsourcing market in the second quarter of next year.
"We are seeing some lock down at the moment, due to Year 2000, but there is a lot of pent up demand and this will hit all areas to some extent after the first quarter of next year," she said.
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