Evalueserve Report:A Study on the EIM Software Market (Updated May 2007)
Research Supports Strong Upward Growth for Global Enterprise Incentive Management Market.
Independent study projects ASP purchases to grow at a CAGR of 45% amidst strong EIM growth worldwide - investments to exceed $1.1 billion by 2010.
According to EvalueServe, the global third-party Enterprise Incentive Management (EIM) solutions market is expected to continue to grow at a CAGR of about 30%. Conversely, EvalueServe found home-grown solutions used to calculate sales commissions and other incentive payments decreased from 90% in 2005 to 85% in 2006. According to the study ASP solutions' share in the third-party EIM market increased from around 20% in 2005 to 30% in 2006 and ASP purchases are expected to grow at a CAGR of 45%.
In the U.S. market, insurance companies are the largest spenders on EIM, followed by pharmaceutical, telecom, high-tech, banking, and retail and distribution. While spending by insurance companies is likely to continue in the near future as well, the spending by telecom companies is expected to stabilize. Insurance companies will continue to invest in large systems (license purchases), while small technology-based companies will prefer ASP over license.
Evalueserve says that the European market for EIM is much more complex, and has been slow to take off, for many reasons, including the multilingual, multi-currency and multi-legislation business environment. In Europe, telecom companies are the biggest spenders on EIM solutions, followed by high-tech, retail and distribution, insurance, banking, and pharmaceutical.
According to Evaleuserve's research, user-friendliness is considered to be the most important criterion when companies are considering EIM solutions. For larger global organizations, product functionality and multi-language capability are also very important. The implementation of the Sarbanes-Oxley regulation has influenced the market positively, but the high costs associated with product installations and lack of awareness act as barriers for growth.
EIM vendors are well-positioned to maintain their leadership position in this market, according to Evalueserve. An effective penetration across industry verticals is possible by building strong partnerships with specialized consulting firms within each industry. The market needs to be educated through industry conferences and seminars. The sales efforts should focus on customer upgrades and the growing ASP market.
