Report: ERP gets boost from latest federal initiatives

Federal spending on enterprise resource planning will almost double in the next five years, according to the market research and consulting firm Input Inc. of Chantilly, Va.

ERP is currently growing at a compound annual growth rate of 13 percent and is expected to increase from $3.5 billion in fiscal 2002 to more than $6 billion in fiscal 2007, according to an Input study released Oct. 17.

The growth can be largely attributed to President Bush's Management Agenda, said Payton Smith, Input's manager of public sector market analysis services.

"Improved financial management and human resources management are two points explicitly addressed by the president's management agenda," Smith said.

ERP is a business management system that automates and integrates the major financial and administrative information systems for a private organization or government. For governments, these information systems typically include accounting, budgeting, payroll, personnel and purchasing.

According to the report, about 50 percent of the spending in this area will be associated with professional services for consulting, integration and implementation of ERP-related systems.

The report states that the potential for consolidated, cross-agency ERP systems will require significant change management support as federal agencies adapt to operating outside of their traditional so-called stovepipes.

The report maintains that ERP-related activity will remain a significant feature of the federal information technology market over the next five years.

The Office of Management and Budget's recent mid-session review "shows that while progress has been made since the President's Management Agenda was first released, executive branch agencies still have a considerable amount of work remaining," Smith said.