Fed ERP Spending To Jump

The federal government will spend $7.7 billion on enterprise-resource-planning products and services in fiscal year 2009, up 37% from this year's spending of $5.6 billion, according to a report to be issued Tuesday by Input. System consolidation at the Department of Homeland Security and administration-management goals promoting intra-agency and interagency collaboration are catalysts behind the upsurge in ERP spending, says the government market-research firm. "We expect this growth to continue regardless of what the November elections bring," says Chris Campbell, Input senior analyst for federal market analysis.

Input projects the market for ERP products and services within the federal government to rise at a 6.4% compound annual rate with civilian agencies accounting for the largest portion of spending: $3.4 billion by fiscal 2009. The Department of Homeland Security will lead civilian agencies in spending as it continues to consolidate redundant systems within the 22 agencies that make up the department.

Defense Department ERP spending should reach $2.7 billion by fiscal 2009 and will increase at a higher annual compound growth rate than that of civilian agencies, 7.7%, led by strong growth in supply-chain and financial management.

Services account for more than half of federal ERP spending. Increasing systems integration work, especially related to cross-functional solutions, will drive the need for even greater spending on professional services, Input says. ERP professional services are projected to increase from $3.7 billion this year to $5.1 billion in fiscal 2009.