Here's news: One IT sector still humming

Input

The term enterprise resource planning may have become passe, but the federal ERP market is still quite healthy, a forecast from a market research company suggests.

ERP automates such classic business operations as financial management, human resources management and payroll. The federal ERP market will grow by nearly 9 percent over the next five years, reaching $1.8 billion by 2005, an analysis by Inuput shows.

Federal agencies are continuing to deploy ERP software to automate and streamline internal business processes, said Cathy Vlassis, a marketing representative at Vienna, Va.-based Input. The federal government still has many more legacy systems that cannot provide required information or share information with other organizations, she said.

"It's such an important part of being ready to implement electronic government initiatives," Vlassis said. Customers are demanding a certain level of customer service through e-government initiatives, and that is driving the agency need for up-to-date, interoperable systems, she said.

"We always suspect that the government is lagging behind the commercial marketplace, but clearly there are so many old legacy systems that need to be replaced," she said.

The term ERP may have shifted somewhat, but the concept has remained relatively consistent. The Input analysis included typical ERP components such as enterprise applications including finance, human resources, resource management, procurement and travel. It did not, however, include customer resource management and electronic businesses in their calculations.

"The ERP vendors are selling much broader electronic solutions than they were a few years ago," Vlassis said, but agencies are still doing a lot of work automating and streamlining their internal biz process.

Conscience of the mistakes of the past, projects are becoming more focused and are more closely tied to the agency's mission, according to the Input report, "Federal ERP MarketView." Professional services represents more than 50 percent of ERP spending and will continue to grow faster than software, hardware or maintenance spending, exceeding $1 billion by 2005, Input forecasts.

Agencies have received mediocre financial management grades from Rep. Stephen Horn (R-Calif.). In his most recent report card, the former university president gave the federal government an overall grade of C-minus.