Federal ERP Spending Projected To Soar

With an MBA in the Oval Office, it shouldn't be surprising that the federal government is investing heavily in enterprise resource planning and related systems and services.

By fiscal year 2007, federal ERP spending should reach $6 billion, up from the $3.5 billion the government expects to spend this fiscal year, which began Oct. 1, according to a report issued Thursday by Input, a technology market-research firm. That's a compound annual growth rate of 13%.

President Bush's management agenda is primarily responsible for driving the ERP spending growth, says Payton Smith, Input's manager of public-market analysis services. About half the spending will be for consulting, integration, and implementation services of ERP-related systems, the report says.

The potential for consolidated, cross-agency ERP systems will require significant investments in change-management support as federal agencies adapt to operating outside their traditional areas, the report concludes. "While progress has been made since the president's management agenda was first released," Smith says, "executive-branch agencies still have a considerable amount of work remaining."