CRM to Boost Tech Spending

A recent Aberdeen Group study reveals that enterprises are expected to increase their technology budgets by an average of 3.4 percent over the next six to 12 months, and CRM-related applications are helping to fuel the growth. The new research tops a similar survey, conducted in March 2003, in which CIOs indicated that their overall IT budgets would increase on average 2.7 percent over the next six to 12 months, This latest Aberdeen spending survey polls more than 100 CIOs and other IT purchasing decision makers. Aberdeen senior vice president Hugh Bishop authored the resulting report, entitled "Technology Forecasting Consortium: 2003 User Buying Intentions -- Update." Thirty-four application categories received responses indicating a positive intent to purchase. Of those, two CRM-related applications made the top five. Customer support was ranked number two; help desk/field service came in at number four, according to Bishop. The number one priority for IT spending was document management. Rounding out the top five were employee self-service (number three) and email/messaging (number five). Sales force automation came in at 13, followed closely by marketing automation at 15. The research also focused on how much of a priority it is for businesses to spend on these key IT categories. Both customer service and help desk/field service applications received a 3.1 on the 1 to 5 priority scale, where 5 was a must-have purchase. SFA ranked an average of 2.2. Bishop says that SFA and marketing automation were more towards the middle of the pack because business is focusing on optimization. "The areas of investment are in optimizing existing processes," he says. "Businesses are looking for efficiencies and cutting costs rather than acquiring new customers and expanding their markets." He adds that it is easier in a down market to justify IT spending to improve processes rather than talk about new revenue targets. However, Bishop claims that while the new study shows an increase in spending, buyers are still hesitant. He suggests that technology providers need to introduce new pricing models and purchasing programs to stimulate demand. In addition, those suppliers must also develop better channel programs to reach midsize enterprises.