Businesses will increase EC spending by 7% in next year, says AMR

Companies will continue to invest in electronic commerce initiatives next year, focusing primarily on managing customer relationships and streamlining internal operations, says a new report from AMR Research.

AMR reports that companies will spend 7% more on EC initiatives next year. That expectation is down from 11% in the previous study.

“Executives have been consistent throughout the last two quarters in prioritizing their e-business spending on customer management enhancements and sales initiatives, both areas where progress can be made for successful long-term advantage,” the AMR report says. “Many executives view the current economic atmosphere as a time to maximize their existing tools and resources rather than continuing with large incremental investments in new customer or supplier applications.”

Other findings include:
* 41% of companies plan to increase their budget on sales and customer management initiatives, down from 48% measured in Q2.
* 31% of companies plan to increase their budget spend on supplier management initiatives, declining from 37% in Q2.
* In contrast, internal e-business initiatives, including employee self-service, electronic finance, knowledge portals, and risk management, has become more active, with 33% of companies planning to increase spending up from 25% in Q2.

Consistent with the first half of 2001, executives stated that the main driver for investing in e-business initiatives is cost reduction and ultimately to improve customer support and retention. Overall efficiency, increased market share, and return on investment also weighed in as top priorities for the majority of survey respondents.

AMR Research compiles its quarterly survey results from 100 interviews with U.S. companies with total employees of 1,000 or more. Respondents consisted of executives directly responsible for e-business budget decisions and planning. Interviews took place in October.