EXCLUSIVE: Application Spending On The Up

MyCustomer.com
Share this content

UK: Do you expect to see overall spending on applications go up or down in the next 12 months?

Up 44%
Down 29%
Same 25%
Don't know 2%

Despite gloomy analyst predictions to the contrary,IT directors across Europe appear confident that there will be an upturn in spending in 2003,according to an exclusive CRM-Forum study conducted in association with UK research firm Vanson Bourne. But there's disappointing news for Microsoft with most respondents claiming that the company's arrival in the CRM market is not likely to send them reaching for their cheque books.

The CRM-Forum/Vanson Bourne study questioned 300 IT directors in the UK, France and Germany. It found that despite the downturn in 2002 and the generally gloomy prognosis for 2003, 44 per cent expected their overall applications software spending to increase in 2003, with 29 per cent reckoning that it will decline. Some 25 per cent expect spending to be flat year on year.

Geographically directors of German companies were the most optimistic, followed by their counterparts in the UK with the French as the most pessimistic. In all three regions, retail companies seemed most likely to spend more with French financial sector and German manufacturing companies the most pessimistic with 73 and 75 per cent of respondents respectively believing that spending will remain flat or go down.

"If you are responsible for making sure your company or organisation has enough toilet rolls,it is highly likely that you are going to have a number of responses to certain questions," says Kevin Withnall, director at Vanson Bourne. "You're going to suggest - despite indications to the contrary - that your company will need more toilet rolls as the importance of your job fully hits home to those that merely use the resource. You're going to suggest that you must look at different suppliers to see who has the best price. And you're going to ensure that the colour of the roll is not only standard across the organisation, but that it is totally complementary to the indigenous colour scheme. It's a big job, but someone's got to do it! So it's no surprise that when asked about issues which concern them, IT directors tend to be positive about spend and trends."

The need to integrate elements of the IT infrastructure is set to remain a thorny issue for IT directors across Europe. Some 41 per cent of all IT directors expect that the overall percentage of their total budget spent on integration will have to increase in the next twelve months. German IT directors were the most convinced overall of an increase (48 per cent) although with a mighty 63per cent it was the UK retail sector that expects to see the highest spending on application integration.

GERMANY: Is the % of IT budget that goes on integration going up or down or staying the same in the next 12 months?

Up 48%
Down 7%
Same 41%
Don't know 4%

But it seems that despite this, the option of opting for a single vendor approach is not something that most companies reckon to be a viable alternative. Only 23 per cent of respondents overall said that they would pursue a single source solution if it was on offer.Again Germany - home to SAP - was the most positive, but even there less than a third of respondents - 31 per cent - saw this as an option. France was the least interested in single source options with a pitiful ten per cent expressing interest.

FRANCE: If a single vendor could meet all your application requirements, would you use that vendor or insist on a best of breed approach?

Single Vendor 10%
Best of breed 61%
Don't know 29%

"The best of breed mentality is still very strong despite, or perhaps because of, years of ERP-benefit statements being delivered to the IT director's door," explains Withnall."We've reverted to the best of breed approach and the increased importance of the need to integrate applications successfully. This is challenging and is probably something that the IT director actually enjoys doing. Would a single vendor solution be just too easy?"

There's bad news for Microsoft in the applications market as it prepares to make its big push - at least in the near term. Only 27 per cent of British IT directors said they were interested in evaluating the company's CRM products in the next 12 months, but that's actually quite healthy compared to the 13 per cent in Germany and the 10 per cent in France. The really big problem for Microsoft is that there is no comfort blanket of a large 'don't know' factor as respondents firmly say no across the UK (59 per cent), France (61 per cent) and Germany (82 per cent).

GERMANY: Does your organisation plan to evaluate Microsoft's offerings in the CRM space in the next 12 months?

Yes 13%
No 82%
Don't know 5%

Looking beyond the next twelve months, prospects do improve for Microsoft though with 42 per cent of those respondents who said no saying that they would be interested in evaluating the software over time. "Some of the commitment is lukewarm," admitted Withnall, "but nevertheless we see this percentage as being particularly interesting for a company that tends not to be top of the mind with the IT Director."

Vanson Bourne can be contacted at http://www.vansonbourne.com/

About mycustomer.newsdesk

Replies

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.