AMR predicts flat IT market next year

IT budgets will remain flat next year according to a survey from AMR Research and IT executives must be able to wed their...

IT budgets will remain flat next year according to a survey from AMR Research and IT executives must be able to wed their applications to business processes and demonstrate their value, according to speakers at AMR Research's executive conference.

"Even in this sluggish economy, we are witnessing a structural change in the way companies purchase enterprise applications," AMR president and chief executive officer Tony Friscia said.

"While the previous technology boom was driven by spending allocated to IT departments, the next wave of 'must-have' applications will need to deliver demonstrable value to be driven by business executives. Leading software companies are investing to build those applications now so that they will be ready to deliver when purse strings loosen," said Friscia.

AMR also released its quarterly survey of 100 IT and business executives, which was conducted in October.

Among the results was the finding that IT budgets will remain flat in 2003. In addition, 39% of the respondents said integration is their top priority IT investment for 2003, 37% said data warehousing is their number one goal, and 31% said they will focus first on physical infrastructure.

Companies will still have to invest in new technology to gain performance increases. Those increases could result from creating demand visibility, knowing the profitability of customers and orders and getting new products to market faster.

But to make those initiatives work, according to AMR analyst Bruce Richardson, users must establish sound business practices that mesh well with applications, and they must populate their systems with clean data. They will also have to get a solid mandate from chief executive officers if they are to succeed.

"It's simple, but it's a way of rethinking the world of business," said Richardson.

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