CRM and ERP Becoming Mainstream for U.S. Medium Businesses, UK Next?

Both ERP and CRM are increasingly becoming mainstream applications for U.S. medium businesses (MBs), according to AMI-Partners’ 2006-2007 U.S. Small and Medium Business Applications & Solutions Market Overview.

Over one third of respondent MBs are currently using ERP/SCM solutions, and just over one quarter are planning to deploy these solutions in the next 12 months. Similarly, almost 40 percent of MBs use CRM solutions today, and almost one quarter plan to adopt CRM in the next 12 months.

“This data indicates that U.S. MBs have made the connection between streamlining and automating business processes, and maximizing productivity and value in the market,” says Sau Lam, New York-based Research Analyst at AMI-Partners. “MBs also recognize the value of integrated suites: 75 percent of those surveyed use an accounting/financials module that is part of a larger solution suite.”

Survey results reveal that manufacturing, wholesale and professional services MBs are leading the ERP wave, spending significantly more on these solutions than counterparts in other sectors. In the CRM arena, the professional services industry outstrips other sectors in adoption and spending.

However, U.S. small businesses are more likely to take a wait-and-see attitude, especially when it comes to ERP/SCM. Although almost three quarters of SMBs use business accounting software, just 12% of SBs currently use and 11% plan to use ERP/SCM solutions in the next 12 months. CRM adoption is low as well, with one out of six SBs currently using and the same percentage planning to use CRM solutions in the next 12 months.

Both markets are highly diverse in terms of the types of solutions they use. Although SMB incumbents such as Intuit, Microsoft and Sage are strongly represented in both the ERP and CRM areas, homegrown, industry-specific and a long list of other solutions make these markets extremely crowded and competitive.

Meanwhile, although overall SMB adoption of hosted software-as-a-service (SaaS) remains relatively modest, SaaS is becoming a well accepted alternative in several specific solution areas, such as virus protection, payroll, e-mail/messaging, web conferencing, website content management, HR and CRM.