Companies have backlog of upgrades: Forrester

By Nathan Dukes

New research suggests companies will look to upgrade their existing systems, rather than put budgets to emerging technologies.

The survey of nearly 2200 IT executives and decision makers, published by Forrester this week, said more than half of IT budgets will go toward ongoing operations and maintenance, as opposed to implementing new solutions.

According to the Forrester survey the poor economic environment created a backlog of business application software upgrade activities for firms, and many plan to address the issue this year.

Forty-one percent of enterprises plan to upgrade existing finance and accounting software, 48 percent plan to upgrade their customer relationship management (CRM) applications and 52 percent their industry-specific software.

In addition, more than 20 percent of all SMBs have concrete plans to implement CRM or information and knowledge management (I&KM) software in 2010 or later, representing the fastest-growing SMB software markets in 2010.

Forrester suggests vendors like SAP focus on demonstrating the value of their products.

“Despite all the hype around new technologies that hit the market in the past few years, firms are devoting most of their IT spending on already-installed technologies,” said Forrester Senior Analyst Holger Kisker, Ph.D.

“As long as businesses are prioritising cost cutting and efficiency improvements, tech vendors must provide clearer business justifications for their offerings and demonstrate the functional fit with business requirements that their solutions provide.”

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