AMR Research today announced the new AMR - Software Evaluation Index (AMR- SEI), a quarterly report that the firm has been using internally to track the quantity and dollar amounts of new software evaluations by industry vertical and software category.
Starting in October 2001, AMR Research began an extensive program to collect and analyze data on new software project evaluations within select Global 2000 organizations. The database now includes specific details on nearly 300 software project evaluations from more than 150 organizations.
"The AMR-SEI does not reflect actual signed deals nor does it imply that all new software evaluations will result in completed selections and purchases," said Dave O'Brien, research director, AMR Research. "Rather, the Index is intended to assess the direction and momentum of project evaluation activity within the organizations that drive the U.S. economy."
Analysis from the report shows that new software evaluations by companies are picking up this year, but they tend to be smaller and target near-term benefits. The results for various software areas are as follows:
- Enterprise Resource Planning (ERP) and Human Resources Management (HRM) purchases represent approximately 38 percent of new selections during the past two quarters of 2002. Since these are typically long-term evaluations and selections, AMR Research does not expect to see significant variability.
- Plant Systems (MES and MRO) have remained stable, averaging between 10.5 percent and 8.8 percent of new deal selections for the first and second quarters of 2003 respectively.
- Product Life Cycle Management (PLM) applications have shown a marked increase. The segment has grown from about one percent of new selections in 4Q01 to about eight percent during the last two quarters. Continued interest is expected in consumer products, automotive and complex discrete industries as manufacturers look toward product development as a focus for growth. Large deals, however, appear unlikely since many buyers will pursue PLM incrementally.
- Though supply chain application purchasing made up around 23 percent of selections in 1Q02, the percentage is down to about 13 percent in 2Q02. AMR Research believes this is due to a variety of factors, including a number of un-implemented applications purchased in years past as well as greater difficulty and expense to successfully deploy than was originally anticipated.
- Customer Relationship Management (CRM) deals continue to decline. New CRM selections are off about two-thirds through 2Q02 from 4Q01. As companies continue to struggle with top-line growth and limited demonstrable ROI associated with these projects, AMR Research projects fewer deals that are more selective.
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