Enterprise software experiencing greatest increase in IT spending

July 31st, 2014

The IT industry has been resilient in terms of growth following the economic downturn of recent years, especially regarding software. While other fields have cut back in terms of expenditures, the tech market has been pressing forward, resulting in an expanding landscape that is showing no signs of slowing. Tools such as enterprise resource planning suites are pushing investments in this sector, as companies in all types of industries pursue ERP implementation to unify different departments and achieve more cohesive operations.

A Gartner report suggested that global IT budgets will total $3.7 trillion in 2014, up 2.1 percent from last year. In 2015, this figure will reach nearly $3.8 trillion, increasing almost 4 percent from this year's level.

The enterprise software sector is projected to experience the most rapid growth in 2014 and 2015. The research firm said this segment will increase by 7 percent in 2014 compared to 2013 and 7.3 percent in 2015.

Richard Gordon, managing vice president at Gartner, suggested that increased vendor competition and lack of product differentiation were two reasons behind the 2014 IT market experiencing just slight growth from last year.

"However, 2015 through 2018 will see a return to 'normal' spending growth levels as pricing and purchasing styles reach a new equilibrium. It is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalization," Gordon said.

The ERP sector has a bright future

As the worldwide IT sector increases at a healthy rate, so too does the ERP market, as these tools become even more widely accessible than ever before. In the past, mostly large enterprises were the ones adopting the solutions, since they possessed the resources to maintain these environments over the long run - something small businesses and startups lacked.

Today, however, cloud computing has made ERP systems available even to firms with limited spending capabilities, allowing them to achieve a successful implementation without draining their budgets. This is possible because the management of a cloud environment is taken care of by a third-party vendor, allowing the customer to instead focus solely on internal tasks.

Overall, the ERP industry has never been healthier. A TechNavio forecast expects the market to increase at a compound annual growth rate of more than 6 percent between 2013 and 2018.

The firm said ERP solutions integrate various business operations - manufacturing, inventory, distribution, and product planning - to improve management capabilities. Adopters can purchase ERP suites as their own offerings or embedded tools.

"As a result, the software can help organizations improve both external customer relationships and internal collaborations by automating tasks and activities that streamline work processes, shortening business process cycles, and increasing user productivity," TechNavio reported.

Achieving a successful deployment is not always easy

Although ERP solutions deliver key functionality, the tools are challenging to adopt at times, especially for first-time users. This is why businesses should take their time when weighing the pros and cons of available ERP options and the service providers offering these suites. Customers require a system that supports their specific industries and operations, otherwise heavy customization will be needed to bridge any gaps with the software.

Infor solutions are among the most reputable ERP systems on the market and are used by all types of organizations from different industries. Businesses that want a personalized experience from one of the best vendors should consider contacting Infor to achieve a successful implementation - one that will last far after launch and without the headaches of heavy customization.

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