Despite arguably still ongoing difficult economic times in most sectors, the growth of government contract manufacturing has continued largely unabated. For instance, while the commercial aircraft industry may have suffered following the dreadful 2001 terrorist attacks and stalled economic activity afterwards, it is quite the opposite case in the defense and government industries (see Fed Warms Up to ERP Spending, but Will Contractors and Their ERP Vendors Comply?).
The federal market opportunity thus comes as no surprise given that it has long been the segment with a low penetration of off-the-shelf integrated enterprise applications, since during the salad days of economic boom and federal surplus, agencies, contrary to their private sector or commercial counterparts, have not had many qualms about devising large-scale fragmented, homegrown, maintenance-intensive informational systems from scratch. The times have drastically changed almost overnight and cost-cutting remains one of the most important reasons why agencies are implementing ERP systems.
The other reasons why ERP has recently become a far more attractive option for the federal market might be the fact that this market has benefited by vicariously learning from mistakes and failed ERP implementations in many commercial companies in the past. Additionally, many ERP systems are now componentized, which provides phased implementations in more manageable chunks (instead of a traditional big bang' approach) in addition to vendors' developed implementation methodologies that are based on bypassing the usual traps of past failures.
Many ERP systems have also meanwhile been Web browser-enabled, which also allows for a quicker and simpler implementation, because client machines do not have to be configured time and again. Further, the leading ERP vendors have incorporated customer relationship management (CRM), supply chain management (SCM), business intelligence (BI) and analytic, as well as many other extended-ERP modules by developing them in-house, by acquisition, or through strategic partnerships with the best-of-breed vendors.
The federal market opportunity thus comes as no surprise given that it has long been the segment with a low penetration of off-the-shelf integrated enterprise applications, since during the salad days of economic boom and federal surplus, agencies, contrary to their private sector or commercial counterparts, have not had many qualms about devising large-scale fragmented, homegrown, maintenance-intensive informational systems from scratch. The times have drastically changed almost overnight and cost-cutting remains one of the most important reasons why agencies are implementing ERP systems.
The other reasons why ERP has recently become a far more attractive option for the federal market might be the fact that this market has benefited by vicariously learning from mistakes and failed ERP implementations in many commercial companies in the past. Additionally, many ERP systems are now componentized, which provides phased implementations in more manageable chunks (instead of a traditional big bang' approach) in addition to vendors' developed implementation methodologies that are based on bypassing the usual traps of past failures.
Many ERP systems have also meanwhile been Web browser-enabled, which also allows for a quicker and simpler implementation, because client machines do not have to be configured time and again. Further, the leading ERP vendors have incorporated customer relationship management (CRM), supply chain management (SCM), business intelligence (BI) and analytic, as well as many other extended-ERP modules by developing them in-house, by acquisition, or through strategic partnerships with the best-of-breed vendors.
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