ERP Still Kicking

Enterprise resource planning initiatives considered key to achieving business goals, AMR survey finds

Boston  August 26, 2002  Enterprise resource planning systems might not have the pizzazz of the latest e-business applications, but hey, if they get the job done, why not stick with the tried and true ERP?

A large number of companies seem to be following this very logic as they build their information technology (IT) plans for the year ahead, according to a new survey from technology consultancy AMR Research.

In AMR's E-Business Initiatives survey for the second quarter of 2002, 30 percent of respondents said ERP initiatives would play the most important role in achieving overall business goals within the next 12 months.

Supply chain management came in a distant second, with 20 percent of respondents pinning their hopes on SCM, while 19 percent pointed to customer management (CM) initiatives.

"It is not surprising that ERP remains the largest part of the applications budget," said Fenella Scott, a research analyst at AMR. "It is currently a $16 billion market, and future plans to implement new systems look promising."

AMR Research's survey also revealed that at least one-fifth of companies planned to increase spending on most enterprise application initiatives in the coming year. Key drivers for investing in enterprise applications include increased efficiency (35 percent of respondents), increased revenue (33 percent) and cost reductions (30 percent).

Reasons for investing in enterprise applications generally correspond with the way in which they directly affect business, except for improved communications, which was second in its overall impact on business though not originally mentioned as one of the key drivers.

Respondents named ERP suppliers SAP, Oracle and PeopleSoft as the leading application vendors to help them achieve their business objectives.

Microsoft led the list as the most important infrastructure supplier (providing a full package from operating systems to databases) to achieving business objectives, with IBM and HP rounding out the top three.

For the survey, AMR Research conducted 100 interviews with companies in the United States during July 2002.

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