IDC: Spending rises for CRM, SCM services

Companies are increasing their spending on outside help to better deal with their enterprise software, according to a new study from market research firm IDC.

Enterprise software, used by companies to automate their business operations, has always been complicated to implement and maintain, which in turn has fueled a demand for related IT services.

Spending driven by that demand is remaining strong, according to IDC. Between 2001 and 2006, worldwide spending on IT services related to enterprise software and related functions will grow at a compound annual rate of 13.5 per cent, hitting US$187 billion in 2006, said Stephanie Torto, an IDC analyst, on Wednesday.

IDC calls this the “solution services market” and breaks it down into six areas of services spending:

– supply chain management (SCM) software services;

– enterprise resource management, better known as enterprise resource planning (ERP), software services;

– customer relationship management (CRM) software services;

– knowledge management software services;

– e-commerce services for implementing enterprise software whose main purpose is to create a system for doing business online;

– globalization and localization services for adapting enterprise software to the laws, culture and regulations of specific countries.

Driving the market’s forecasted growth will be services tied to SCM software, followed by ERP and CRM, Torto said. Companies are turning to SCM, ERP and CRM software to gain systems that will address their business operations in a “holistic” manner, Torto said. Consequently, knowledge management and e-commerce initiatives increasingly are being included as part of the more encompassing SCM, ERP and CRM projects, she added.

Going forward, clients will increasingly demand that IT services firms be able to provide – by themselves or via partnerships – a broad variety of enterprise-software services, including consulting, systems integration, outsourcing, support and training, Torto said.

This “solution services market” is part of the overall worldwide IT services market, which will grow at a compound annual rate of 12.4 per cent between 2001 and 2006, reaching $626 billion in 2006, according to a forecast IDC made last week.

IDC is a unit of International Data Group, the IDG News Service’s parent company.