As per the ChangeWave report on software spending, there are major cuts predicted across the broad spectrum for the next 90 days, and the worst hits are ECM and ERP categories with almost 1/4^th decline in spending. Spending cuts prediction is not surprising, if you look at current economy and how every company is trying to deal with shortfalls, you know that software would be impacted.

What surprised me was that ERP is predicted to be one of the worst hit. From customer’s perspective, I have always seen ERP listed as more critical than ECM (or many other softwares for that matter), so why it is at the bottom? I think this has more to do with project lifecycle than with criticality of software. You ask any customer who has gone through or is going through a ERP implementation and they can tell you horror stories on missed deadlines or extremely long project timelines. For many customers, to plan for such long projects may not be a priority and they would rather patch up what they have then spend lot of money on a new software in this environment. This means there is still a decent opportunity for ERP project work.

From ECM perspective, I am not that surprised. ECM products/projects do well when economy is booming, as many customers still view that as secondary to their most critical softwares. They know they have something in place and they can live with it, so they can let new software purchase wait in turbulent times. Another aspect is user interface, most of the ECM products allow you to modify user interface for end-users, so a customer could spend little bit money and do a face lift for end-users, and could live with back-end shortcomings. A customer who has difficulty making the changes to their front end, would be the one who could be spending the money on ECM.