U.S. Companies Pegged to Increase ERP Budgets by 12.3 percent in 2007

Expanded product functionality from solution provider, drive to consolidate systems driving growth, AMR finds

Boston — November 30, 2006 — U.S. companies will increase their budgets for enterprise resource planning solutions by 12.3 percent in 2007, according to a recent report from AMR Research.

In its "Enterprise Resource Planning Spending Report, 2006-2007," AMR points to several factors fueling growth in ERP spending. First, ERP vendors have expanded the functionality of their products through both internal growth and acquisition, thus enabling them to garner a larger share of overall application spending.

In addition, a survey conducted for the report found that technology buyers understand the need to invest in better information systems, and in most markets they have the capital to do so.

"This year and next will experience levels of ERP investment that we haven't seen since the late 1990s," said Jim Shepherd, senior vice president at AMR. "At that time, new customers were replacing legacy systems with ERP suites. Today, spending is driven by a healthy mix of new customers, consolidation projects, add-on applications and deployment to additional users."

The AMR survey found that globalization and lean manufacturing are the two most important business issues companies plan to address with ERP investments. In fact, 43 percent of respondents aim to have a single global ERP system within three years, compared to only 26 percent today.

Manufacturing and retail buyers favor a single-vendor packaged ERP system, with 82 percent of survey respondents from these sectors using suites for their ERP applications.

SAP and Oracle will maintain their foothold in the ERP space, AMR predicted, noting that 55 percent of respondents in the process of making ERP system selections said SAP was on the list of vendors they were considering, while 43 percent of respondents said Oracle was on their list.

Companies in this article