Mixed Outlook For Enterprise Performance Management

Enterprise Performance Management (EPM) software is expected to grow at a CAGR (compounded annual growth rate) of 11.9% over the next five years, but a "bust and hangover" could result if vendors oversell their products. ARC Advisory Group, Dedham, Mass., details these views in the new report "Enterprise Performance Management Analytics Worldwide Study." The EPM market contains off-the-shelf solutions built using Business Intelligence and OLAP technologies. The promise: assisting key parts of an organization to work together to achieve goals, which are defined, distributed across organizations and monitored. In 2002, the EPM market was at $1.4 billion; ARC is forecasting the market to be more than $2.5 billion in 2007. "Despite the fact that this market is currently one of the bright spots in the enterprise software market, ARC's forecast is considerably lower than that put out by other analyst or market research firms," says Steve Banker, ARC service director and principal author of the research. "The forecast shows very fast growth over the next few year, but that growth slows to less than the rate of inflation by the fifth year." Banker notes that other categories of software have been oversold to CEOs and CFOs in terms of their promises for strategic differentiation, and they eventually suffered for it. "A sharp market contraction resulted," he says. "The fear is that the EPM segment may share the same fate."