Federal ERP Market To Reach $7.7B

Federal spending on enterprise resource planning (ERP) is projected to grow 33 percent between the current fiscal year and 2010, when the market is expected to hit $7.7 billion.

That’s the prediction of Input, which released a report today on the federal ERP market. The market’s expansion through 2010 will slightly outpace the federal information technology market’s overall growth rate, according to the firm. It projects a 6 percent compound annual growth rate for the federal ERP sector.

The anticipated growth should benefit systems integrators, which are often involved in the consulting or implementation phases of an ERP project.

“It’s a huge market for systems integrators,” said Chris Campbell, senior analyst of federal markets, at Input. The firm studied individual ERP market segments such as human resources, financial management and supply chain management to arrive at its projection.

Campbell said the Office of Management and Budget’s lines of business initiative will help propel ERP investment and create opportunities for integrators. “As [lines of business-related] contracts start coming out, we are going to see more of an opportunity for systems integrators,” he said. He said he expects lines of business initiatives in areas such as human resources and financial management to be among the main areas of ERP activity.

Input reported that Defense Department agencies will lead the government’s ERP spending. That sector’s ERP outlay is expected to grow from $1.9 billion in this fiscal year to $2.6 billion in fiscal 2010. Supply chain management will fuel that growth, according to the firm. The Department of Health and Human Services will top civilian ERP spending, the firm noted.