Every new economic recovery and boom brings with it a new type of business paradigm. This applies to the economy in general as well as to any market niche. General economic developments should be left to economists and philosophers to examine. Here we will try to plot the trends as we see them from the golden Clinton era to the 2000-2004 recession and now to the economic recovery for the ERP consulting firm. In our case we are Microsoft Business Solutions and IBM Lotus Partner. This small article is not intended to be the first topic of discussion – it is rather aimed at ERP customers to analyze the trends in our industry and to make the right decision for the system and the business partner:
o ERP market consolidation. As ERPs (accounting, logistics, sales, warehouse management, etc.) become more mature products, we are seeing fewer and fewer attempts to create a new ERP package from scratch – it seems like the bike is being reinvented. We see the consolidation in medium-sized companies: Microsoft Business Solutions: Microsoft CRM, Great Plains, Navision, Axapta and Best Software: MASXXX. When large companies serve the mid-market through their VARs and implementation partners, the barrier to niche entry increases and it is difficult to launch new businesses targeted at mid-market customers: certification, initial purchase/investment, etc.
o VAR consolidation. When we saw a large number of independent Great Plains Software resellers competing fiercely with each other (particularly in Los Angeles and suburbs), the consulting fees were at a relatively low level ($130 per hour) and you as a potential client could strike a deal on the software price discount. As the recession hit the market, customers held off on new ERP purchases as well as new computer equipment. This trend left ERP consulting firms without cash flow, forcing them to either close their doors or merge with accounting firms to survive. New conglomerates are dictating higher consulting rates and sticking to the software price list. This odd fact presents a great opportunity for new business openings hoping to provide a decent service with low overhead for small businesses
o Advice paradigm shift. If you read classic management consulting literature, you can learn that the 1960s were the days of management consulting, when you went to clients to train them in classic marketing, management, accounting, and so on. Universities took over and all these disciplines were soon embedded in the standard knowledge of college graduates. In the early 1990s, the consultant was on-site with the customer to train users on how to use the ERP application. Now we have universities doing this work, and employers are hiring graduates trained to use one ERP or another. Now we expect a combination of technical and application advice, especially with regard to the next bullet point
o Different platforms harmony. In 1990, platforms such as Windows, Macintosh, Unix (Linux, Solaris, AIX) viewed their counterparts as enemies and struggled for market takeover. Little by little, they come to the conclusion that they have every right to exist and that they must communicate with each other in order to survive. Such inventions as multiplatform Java/EJB/J2EE, XML, HTML, JSP prove future harmony. For the ERP consultant, this means that he should be familiar with the competitors and ready to propose integration between the platforms
o Offshoring. This is a really dangerous trend for people trying to make a career in computer programming in the US or continental Europe. However, most of these people are from India, Russia, Pakistan, Eastern Europe, the Philippines and Brazil, so instead of giving up – go ahead and start your own practices and leverage the expertise of your overseas friends. Manufacturing is now being offshored – now it’s time for the programming to go offshore.