IT projects still focus on cost cutting and consolidation

Companies are still focusing their software spend on enterprise-wide applications, such as Enterprise Resource Planning (ERP) systems, according to AMR Research.

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By  Neil Denslow Published  March 12, 2003

Companies are still focusing their software spend on enterprise-wide applications, such as Enterprise Resource Planning (ERP) systems, according to AMR Research. Its analysis of request for proposals show that while new generation products are experiencing increasing interest, companies are still spending cautiously and focusing on core applications.

AMR reports that 50% of new evaluations are consistently in the ERP and supply chain area. This is primarily because consolidation and cost reductions remain as the leading business objectives for many organisations.

The research firm adds that although there has been a five-fold increase in the percentage of total new deals for integration and analytics since 1Q02, these still account for only 10% of new evaluations in 4Q02.

“By almost any economic measure, 2002 was a sluggish year, and overall economic expansion slowed considerably in the fourth quarter. Investment in IT-related goods and services has shown consistent growth, with the exception of a flat fourth quarter, and software-related investment has outperformed overall IT growth for the past three quarters. Barring a major geopolitical event, the consensus is that investment numbers will rise slightly in 2003, stimulated by stronger sales and profit growth,” says David O’Brien, research director, AMR Research.

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