More Taiwan SMBs to adopt ERP

Demand for business applications is projected to rise over the next five years, according to new research.

Taiwan's small and midsize businesses are projected to spend more on ERP and SCM applications, reflecting the growing business requirement for timely, accurate data.

According to AMI-Partners, in the last 12 months, ERP (enterprise resource planning) implementation accounted for US$37.4 million or 10 percent of the total US$3.4 billion IT spend by Taiwan's SMBs. The research firm estimates that spending on ERP and SCM (supply chain management) applications will top US$56 million in 2009, an increase of almost 50 percent from 2005.

The findings are based on a phone survey conducted by the research firm with 454 SMBs. AMI-Partners defines companies small businesses as having 1 to 99 employees, while medium-sized businesses have between 100 and 999 employees.

The survey revealed that in Taiwan, one in 10 small businesses and over one-third of medium-sized businesses have implemented ERP/SCM applications. According to the research firm, over the next 12 months, the adoption of ERP among small businesses is expected to double, while 8 percent of medium-sized businesses intend to purchase ERP software.

AMI-Partners also found that 14 percent of its respondents, which are current ERP users in the midsize-businesses segment, plan to upgrade their software.

Jackie Chan, a senior analyst at AMI-Partners, attributed part of this uptrend to multinational corporations. For example, he noted that 80 percent of Intel's orders from Taiwan's distributors are submitted through a Web-based system, hence prompting its business partners to invest in ERP systems that could be compatible to Intel's.

Security matters
Security is another issue that will continue to be a priority for Taiwan's SMBs in 2006. Seventy-nine percent of the respondents ranked "enhancing data security" as their most important strategic IT direction for 2006, with "implementing data backup and disaster recovery" coming in a close second.

"With Taiwan SMBs extending their connectivity to suppliers, they are realizing that the impact of security breaches can be severe and even devastating," said Chan. "Security is now a core business requirement, and dealing with security on an ad-hoc basis is no longer adequate."

According to AMI-Partners, more than 76 percent of the SMBs have deployed antivirus software while over 50 percent have adopted antispam applications. Network firewall usage, however, still trailed behind with only 22 percent penetration among small businesses and 14 percent among medium-sized businesses.

The survey found that opportunities are also aplenty for PC and network vendors, where only half of Taiwan's small businesses have adopted PCs and less than a quarter have implemented a local area network.