AMR Research Report Finds U.S. Companies Will Increase their Enterprise Resource Planning Budgets by 11.3% in 2007

by AMR Research

Expanded Product Functionality from ERP Vendors Aided Growth

AMR Research released the "Enterprise Resource Planning Spending Report, 2006-2007," which found U.S. companies will increase their ERP budgets by 11.3% in 2007.

Growth in ERP spending was fueled by several factors. 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. The survey 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, AMR Research. "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 survey found that globalization and lean manufacturing are the two most important business issues companies plan to address with ERP investments. 43% of respondents aim to have a single global ERP system within three years -- compared with only 26% today.

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

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