ERP Investments Still Top the List for Corporate IT Spending

CIO — Corporate IT budgets may have gotten slashed in 2009, but that apparently didn't stop companies from investing in their ERP software this year.

Forrester Research survey data of nearly 400 North American and European enterprise software decision-makers shows that two-thirds of companies are actively investing in ERP application portfolios—from pilot projects and implementations to expansions and upgrades, notes Forrester principal analyst Paul Hamerman, in the report The State Of ERP 2009: Market Forces Drive Specialization, Consolidation, And Innovation (subscription required).

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Even though the survey was fielded during the fourth-quarter of 2008—when the global recession was sending businesses into full panic and spending lock-down mode—the data shows that just 1 percent of respondents had plans to decrease their ERP investment.

Even with the frustration over maintenance fees and upgrade costs and today's corporate emphasis on business intelligence, analytics and CRM applications, an ERP suite is still considered the "backbone" of today's enterprises: supporting common administrative functions of finance and procurement, and often supporting the company's main operations and assets, revenue-generating activities, supply chain, and distribution channels, Hamerman points out. (Also see CIO.com's Inside ERP Budgets: Slicing and Dicing the Corporate Pie and Enterprise Software Licensing Negotiations: Insider Tips.)

While the amount of ERP investment certainly can be discretionary, it appears that it is not optional—even during a global recession. "This level of activity is significantly higher than the other key packaged application categories," Hamerman writes, "including customer service, human resource management, order management, and supply chain."

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