Down But Not Out

The early 2001 numbers from Wall Street showed corporate earnings tanking and many companies cutting back on capital spending. Where does this leave new IT investments? Down, but definitely not out: companies are spending smarter; and they are adjusting...


[From iSource Business, September 2001] On the one hand, Corporate Express' recent investment in a customer relationship management (CRM) system makes a lot of sense: As part of Buhrmann, a multinational company, Corporate Express is one of the world's largest B2B suppliers of office and computer products. Additionally, its proprietary e-commerce system, E-Way, does some $635 million in business each year, with online sales increasing around $3 million every month. With the growing trend in e-procurement for office products, it is clear that, in order for us to best meet the needs of our customers, we must continue to invest in e-commerce tools, says Guy Manuel, vice president of e-business at Corporate Express.

On the other hand, the investment makes no sense at all: The economy, while not exactly in free fall, has certainly slowed down. Corporate earnings have tanked, and there is clear evidence that companies are curtailing their capital spending, especially in software and hardware investments. Indeed, the U.S. Commerce Department recently reported that business spending on capital equipment, which has grown an average of 15 percent a year for the last three years, contracted in the fourth quarter of last year. Spending on such information technology (IT) software as CRM, enterprise resource planning (ERP) and supply chain applications exhibited the sharpest drop some 6.4 percent in the first quarter of this year from the previous quarter.

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