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Manufacturers To Spend More On IT

Complied By Tim Stevens Information technology budgets among U.S.-based companies in the manufacturing and services industries will increase in 2001 by approximately 5%, according to a study by AMR Research Inc., Boston, an industry- and market-analysis firm specializing in e-business strategy and infrastructure. The findings are based on interviews with 900 IT and application-development professionals in U.S. companies across 13 industries. The study also reveals that application spending will show growth specifically in supplier and customer-facing e-commerce applications. Spending on these applications is expected to increase from 19% of budget in 2000 to 23% in 2002 among manufacturers, while ERP-application spending is expected to decrease from 42% to 37% in the same time frame. "Companies are investing in applications that will help them successfully reach customers, track sales, and support accounts," says Robert Kraus, vice president, quantitative research. "IT budgets are increasing in all areas to keep pace with market demands, to ensure customer satisfaction, and help control costs." The main drivers in application investments are maintaining and improving customer relationships as well as controlling costs. Financial services, aerospace, and utilities industries are the biggest spenders on enterprise applications. The process-manufacturing industries, oil and gas, pharmaceuticals, and chemicals have the lowest application budgets, but highest ERP and Supply Chain Management (SCM) penetration. Supply Chain Management, Customer Relationship Management, and e-commerce segments are marked by home-grown applications and vendor fragmentation, according to the company.

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