Definitions and Suggested Reading
ERP Software Applications Definitions
Enterprise Resource Planning
ERP is an application strategy focused on several distinct enterprise application software (EAS)
markets. In general, ERP involves software packages that automate and support the processes of the
administrative, production, inventory and product development aspects of an enterprise. ERP is
considered the back-office application set and is defined as manufacturing, human resources
management systems (HRMS) and financial management systems (FMS).
Manufacturing
The functionality that comprises this segment includes, but is not limited to, manufacturing execution,
master production scheduling, materials requirements planning [MRP] (including regenerative MRP),
inventory control, bills of material/routing (including engineering change control), capacity requirements
planning (including input/output control, finite scheduling and infinite scheduling) and quality tracking
control.
Human Capital Management (HCM)
HCM is a set of practices related to people resource management. These practices are focused on the
organizational need to provide specific competencies and are implemented in three categories:
workforce acquisition, workforce management and workforce optimization. The applications that help to
enable HCM include recruitment, benefits, education and training, personnel administration, contingent
workforce management, time and attendance, organizational development, performance management,
compensation planning and strategy, workforce analytics, and payroll. Employee relationship
management (ERM) systems are also included in these segments.
Financial Management Systems (FMS)
FMS is an application software suite focused on the automation and process support required by the
corporate finance function and related departments of an enterprise (such as accounting). The financials
package stores relevant data, provides the IT foundation for running the organization's finances and
prepares reports for management and external authorities. FMS consists of accounting, budgeting,
activity-based management and consolidation.
Enterprise Asset Management (EAM)
Developed from the more basic computerized maintenance management systems (CMMS) functionality,
EAM systems have been a key tool in asset care and maintenance, repair and operation (MRO)
procurement. The CMMS functionality is extended by the addition of financial management modules and
more advanced human resource applications. EAM is a part of a strategy to increase plant capacity,
using IT in lieu of new construction in large, asset-intensive enterprises. It integrates key plant control
systems (PCS) and ERP with maintenance activities and functions to reduce downtime and minimize
maintenance spending. In its most complete form, it equates to an ERP II solution for a
nonmanufacturing environment, such as a utility, mining operation, defense or transportation operation.
Service Definitions
Enterprise Solution Services
Solution services are offerings to design, develop, deploy, manage and support specific processes,
functions, applications or initiatives in user organizations. These services aim to optimize a company's
processes and integrate related technology applications and platforms.
Enterprise solution services covered in this forecast include CRM, ERP and SCM services solutions.
CRM services relate to process that include functionality for sales, marketing, service and support.
ERP services relate to processes that include functionality for financial management systems, human
capital management, manufacturing/operations and enterprise asset management.
SCM services relate to processes that include functionality for planning, execution and
sourcing/procurement.
For definitions of these functionality components, see the software definitions guide (Reference 2-5).
The default currency for this report is millions of U.S. dollars.
IT services line market segments are defined as follows:
• IT management — IT management services provide day-to-day management and operation of IT
assets and processes. As such, they represent the core value components of IT outsourcing.
Management services include three subsegments: operations services (for IT infrastructure), application
management services and help desk management services. This forecast only includes the applications
management component.

• Applications management — Applications management provides a wide variety of applications
services, processes and methodologies for maintaining, enhancing and managing custom applications,
packaged software applications or network-delivered
applications.
• Software support services include revenue derived from long-term and pay-as-you-go (incident-based)
support contracts. Software support contracts include remote troubleshooting and support done via
telephone and online, installation assistance, and basic usability assistance. Software support services
do not include revenue derived from the purchase of subscriptions that provide entitlement and to rights
to use future minor versions (point releases) or future major releases of software.
Professional Services
• Consulting services — Consulting services are advisory services that help companies analyze and
improve the efficacy of business operations and technology strategies. Consulting services include two
subsegments: business and IT consulting.
• Development and integration services — Development and integration services customize or develop
IT solutions, assets and processes and integrate these solutions, assets and processes with existing
infrastructure and processes. Development and integration services implement solution designs.
Development and integration services include three subsegments: application development services,
integration services and deployment services. This segment also includes educational services related
to information systems or infrastructure deployed as part of a professional services engagement.
Glossary of Terms
Report Glossary
Acronym/Abbreviation
CAGR
CMMS
EAM
EAS
ERM
ERP
FMS
HCM
HIPAA
HRMS
MRO
MRP
N/A
NT
PCS
Definition
compound annual growth rate
computerized maintenance managemet systems
enterprise asset management
enterprise application software
employee relationship mangement
enterprise resource planning
financial management systems
human capital management
Health Insurance Portability and Accountability Act
human resources management systems
maintenance, repair and operation
materials requirements planning
not applicable
Windows NT operating system
plant control system