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September 23, 1999

ERP Accounts for 43% of Corporate App Spending Says Report

By CBR Staff Writer

The brake that Y2K spending put on corporate spending on enterprise applications may have been most severe in the ERP sector, but a recent AMR Research survey of 800 companies in 13 industries found that ERP still grabs the largest share of respondents’ corporate application budgets at 43%. Half of those companies have ERP installed.

The report finds that 17% of application spending went on CRM, but despite the hype surrounding this class of programs which help users sell new services more accurately AMR says that the market still lacks a prominent vendor. Siebel has 17% of the market by revenue, though only seven of the 800 companies were found to be using Siebel’s software. SCM accounts for 13% of application spending; and 20% of the 800 are doing SCM. Manufacturing software including plant scheduling, maintenance management, product data and document management accounted for 16% of spending.

High-tech, pharmaceuticals and financial services spent the most of the 13 verticals on enterprise applications. AMR says that a $250m financial company will typically spend $700,000 on ERP software, $400,000 on CRM and $1.5m on related services this year. High-tech companies invest 28% of IT budgets on enterprise applications. Most spending goes on ERP, the rest is spread across other enterprise applications. Pharmaceutical companies spend 20% of their IT budgets on enterprise applications, mostly CRM and SCM. Financial companies fork over 15% of IT budgets on enterprise software, most going on ERP and CRM.

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