Packaged Distributed Order Management: The $6.7 Million Market

Yankee Group: Few packaged solutions exist in fragmented market dominated by proprietary strategies

Yankee Group: Few packaged solutions exist in fragmented market dominated by proprietary strategies

Boston — May 6, 2004 — In a newly released Yankee Group report, "2004 Survey of IT Investment Drivers For Distributed Order Management Reveals Customer Service and Revenue Generation Is The Target," enhancing customer service and generating revenues are cited as being the primary motivations for enterprises deploying distributed order management (DOM) solutions.

In the report, 52 percent of 300 information technology (IT) decision-makers surveyed put the desire to improve customer service at the top of their lists. In addition, 47 percent of respondents said an increase in revenues is the key measure of the success of their investment in DOM.

The dominant approach to solving DOM has been a custom development strategy that includes building homegrown solutions or leveraging application development tools.

"The DOM market is large but extremely fragmented with many companies building custom solutions," said Kosin Huang, Yankee Group Business Applications & Commerce senior analyst. "Although 40 percent of enterprises want to address DOM by standardizing on one [enterprise resource planning (ERP) system], most companies pursue expensive and risky proprietary strategies because of ERP's functional limitations and lack of DOM capabilities."

Interestingly, a survey of enterprise perceptions regarding DOM capabilities indicated little variance when comparing specialist vendors such as Comergent and Excalate with suite vendors such as Oracle, Siebel and Microsoft. This perception belies the fact that actual capabilities often vary greatly among vendor products.

The Yankee Group predicted the DOM market will shift over the next five years to packaged solutions that have vertically specific functionality, flexible business process management, comprehensive DOM lifecycle functionality, unified data models and flexible integration frameworks gaining ground.