Business intelligence sparks new ERP battle

ERP vendors are doing whatever they can to land customers, says Kathy Quirk, a research analyst at Nucleus Research, Wellesley, Mass. She calls the BI software “incredibly competitive with phenomenal discounting going on.”

Nucleus believes this will heat up the ERP market this year. “ERP vendors will move to reclaim lost ground and offer expanded BI capabilities to provide one-stop shopping,” Nucleus said in its recent Top Ten Technology Predictions for 2005. “Adding value to their platforms will be the carrot they hope lures in new customers.”

This could spell a buyers’ market. A recent Gartner survey of 1,300 CIOs found business intelligence apps rank second (behind security enhancement tools) among this year’s top technology priorities. The CIOs also ranked their top 10 business priorities. Three of the top seven are tied to BI: supporting competitive advantage, revenue growth and using intelligence in products and services. (Business process improvement is the top priority.)

“Business expectations are now forcing CIOs to transform the [IT] organization, and 2005 is the year where CIOs must deliver more value and become a contributor rather than a commodity,” Gartner vice president Mark McDonald says. “They must do this without large up-front investments, and CIOs are turning to business processes and business intelligence to meet this challenge.”

The competition between SAP and a bigger Oracle, after its acquisition of PeopleSoft, promises to make the ERP-BI competition even more interesting, according to Quirk. PeopleSoft users are “questioning their faith” after the deal, and SAP, as well as other vendors, are pushing them to switch, she says.

Which one of the two giants is in the better position?

Quirk picks SAP. “I think it would be easier for them to make a push,” she says. In trying to execute its strategy, “Oracle is going to have its hands full with this acquisition.”

About the Author

Rich Seeley is Web Editor for Campus Technology.