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COMPUTERWORLD | Articles | Market Analysis
01 Mar

IDC: Bulgarian ERP market to get out of crisis in the end of 2011 the earliest

ICT research company CBN says in 2011 the overall software market in Bulgaria will slowly start to recover but will not achieve the high 2007 levels
In the last two years, the EPR market in Bulgaria did not manage to hold its growth momentum gained between 2006 and 2008, says Lubomir Dimitrov, Research Analyst at IDC Bulgaria. The total sales revenue form this software in the country in 2009 suffered a double-digit slump of 25.1% year-on-year.
In the transitional 2008,
the number of ERP deals showed a serious annual growth, despite the fact that most implementations were small-scale and thus the revenue increase was one-digit in comparison to 2007 and 2006, Dimitrov explains. However, the lack of big orders from the state sector and the high level of saturation in the corporate sector, which was one of the major engines on the ERP market, said their negative word. These factors affected 2009 and 2010 and in addition the spreading financial crisis made the situation even worse. As a consequence of the high intercompany indebtedness and the poor financial circumstances many firms were in a lot of projects got postponed, and others – seized. Corruption and the complicated procedures of receiving EU funding led to a low money adoption degree, which did not allow those organizations that relied on these funds to use them in order to deploy new business process management systems.
In 2009 and 2010,
ERP vendors and their partners concentrated their attention and efforts towards the less saturated business segment of small and medium-sized enterprises (SMEs), Dimitrov says. Hence, a large part of the ERP projects were small in view of the sums spend for their implementation. Seeking to reach more clients, ERP companies came up with flexible pricing and promotional offers. On the other hand, some organizations decided to reengineer their business processes and to expand their existing systems with new abilities. However, this has not been enough to heal the Bulgarian ERP market in the last two years and to let it reach the levels of 2007 and 2008.
The projection of IDC
is that we can expect to see a step-by-step recovery of the business management systems market at the end of 2011 and the beginning of 2012 the earliest. This will be a result of the gradual squeeze-out of the economic crisis, the strengthening of foreign investments and the increase in EU fundings adoption in Bulgaria.
The standard factors, which traditionally influence decision makers when considering business software implementations, will also matter – cost reduction, increase of the control over business processes, as well as improvement in competitiveness locally and internationally, Dimitrov points out.
CBN: Chaos and unpredictability on local software market in 2011
According to Bulgarian ICT market research company CBN – Panoff, Stoycheff & Co., in 2011 the domestic business software market will witness chaos and unpredictability in both marketing and revenues. There will be a mass focus on CRM and Business Intelligence solutions and we are going to see new players seriously attempting to displace already established companies.
CBN however says that this year the overall software market in Bulgaria will slowly start to recover but is not going to achieve the high levels of the strong 2007.
CBN on ERP, CRM, BI history in Bulgaria
In 2010 there were a total of 315 software companies in the country, which generated 19% of the overall IT revenue and employed 34% of the IT staff in Bulgaria, CBN data reveals.
In 2009 there were 61 ERP system integrators and 31 ERP systems available in Bulgaria versus 49 integrators and 28 systems in 2007, CBN says.
Currently ERP software is installed in 60 sectors in the country. The number of implemented ERP solutions is the largest in the following sectors: beverage, machinery construction, chemistry, production of electrical components and equipment, and finance. However, the penetration of ERP products is really poor in civil engineering, services, defense, wood and paper processing, and production and medicine, according to CBN.
The first ERP project in Bulgaria occurred in 1996, CBN says.
As for CRM – such systems were first deployed in the country in 2001, CBN data shows. The services sector has the highest saturation rate of 67%. Some 32% of the firms that have CRM systems also use ERP software.
Business Intelligence tools started working in Bulgarian companies in 2000. Currently BI is present in 12 of 60 sectors and the adoptive one is finance. 68% of the enterprises that use BI have ERP software as well, according to CBN.

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