Cost and profitability management. Homegrown solutions are common for this purpose as well. In fact, Forrester says, many companies aren't even aware of this product category, which analyzes development, production, and operating costs against revenues for specific customers, products, and business lines. That means the growth potential is high, though interest is less in service industries with lower customer or product complexity. Forrester says customers can realize 10 times or higher ROI on this software in one or two years by recognizing unprofitable products or customers. But the research firm still only pegs the software's value-add as medium. "Effort levels to realize benefits are substantial in terms of modeling effort and data integration," the report says.

Finally, four product categories are identified as being in the "equilibrium" phase, with high, steady adoption levels:

Treasury and cash management. The market for this kind of software has gone through significant consolidation, leaving a small number of players. In fact, demand for solutions may fall within the next 10 years as companies outsource treasury functions, and this product category may be the first to change from the "equilibrium" phase to the "decline" phase. At present, payback from an implementation can be fast, particularly where large asset values are at stake. ROI is based on maximizing portfolio returns while minimizing risks of exposure to market fluctuations. "Solutions are mature but continue to evolve to take advantage of open standards for integration," Forrester writes.

Financial reporting and consolidation. This is mainly a product-replacement market. Compliance changes in some industries drive some of the churn. Companies with many subsidiaries, numerous legal entities, and overseas operations often need a consolidation package to meet financial reporting requirements. This category is very mature and limited to a small number of key vendors, but regulatory imperatives such as International Financial Reporting Standards keep the business needs evolving.

Tax planning and compliance. Consolidation has been occurring here too, and some types of tax software are moving toward becoming commodities. Applications that calculate tax and prepare returns are more mature than those that automate tax provision and planning.

Accounting. "How would you run a business without an accounting system?" Hamerman asks rhetorically. Adoption is universal, and a transition to the decline phase is not envisioned. "The accounting paradigm is unlikely to change significantly for the foreseeable future," the report states.

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