Japan Shows Strong Replacement Demand for Enterprise Applications Solutions and Potential New Demand for Business Analytics Solutions, According to IDC
Source: IDC Press Release View: 253 Date: 2013-06-28

International Data Corporation (IDC) today released the results of a new survey on user needs in the Japan enterprise applications (EA) and business analytics (BA) solutions market. IDC finds that EA applications continue to make steady inroads in Japan, and that replacement demand accounts for a growing share of the market. Conversely, installation rates are lower for BA applications than for EA, and there is significant room to generate new demand.

IDC conducted its EA/BA Solutions User Needs Survey in December 2012, covering 1,072 IT user companies of 10 or more employees in Japan. The survey results showed an installation rate of more than 50% for all of the major categories of the EA applications: financial accounting, personnel and payroll, order management, supply chain management (SCM), and manufacturing. This rate indicates that the Japan EA solutions market is likely to be increasingly replacement-driven in the future.

Installation rates are lower for BA applications compared with those for EA. The approximate installation rate for data warehouse systems was 23%; BI tools, 17%; statistical analysis/data mining, 16%; CRM (customer relationship management) analytics, 15%; financial performance, strategy management and GRC (governance, risk management, and compliance) applications, 23%; SCM analytics, 11%; and text mining/text analysis, 9%. In the survey, companies were also asked about current BA utilization levels and desired BA utilization levels within a year. The results showed that the average BA utilization level increased from 1.9 (use information for business evaluation and measurement, and for business improvements) for the current period to 2.8 (use of companywide integrated information; implement integrated performance management) within a year. This increase indicates a strong desire to use BA applications and raises expectations of new demand in the future.

Notes: Guidelines for BA utilization levels

• Level 1: Use BA in daily operations

• Level 2: Use information for business evaluation and measurement, and for business improvements

• Level 3: Use of companywide integrated information; implement integrated performance management

• Level 4: Use BA for business innovation and strengthen management by promoting manpower productivity

• Level 5: Use BA to create strategic agility and differentiation

The survey correlated the installation of BA systems with the forecast of companies for FY12 and found that more companies achieving positive year-over-year growth had installed statistical analysis/data mining, CRM analytics, accounting performance/strategy management/GRC applications, or SCM analytics than companies achieving negative year-over-year growth.

IDC Japan’s research analyst for Software & Security, Shimpei Asano commented, "Companies expect EA solutions to bring productivity gains and operational cost savings, and according to our analysis, they expect BA solutions to improve sales and provide for sustainable growth. With the expectations growing for BA solutions, software vendors and IT solutions providers need to analyze individual customer challenges, identify application areas and present a case for installation that employs concrete utilization images to illustrate the return on investment. In addition, they need to provide ongoing utilization support so that results are achieved."

Analysis of the results pertaining to the implementation of EA and BA solutions in user companies and their intention for future implementation can be found in the IDC study Japan Enterprise Applications Solutions User Perception and Needs 2013 (IDC #JP2542804V).

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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