1997 Software Market Report from Sentry Research Services.WESTBOROUGH, Mass.--(BUSINESS WIRE)--May 22, 1997-- Shows dramatic increase in software sales to $96 billion -- but only if buyers and suppliers agree! Widely differing expectations lead to gross inefficiencies: for every dollar expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. by a supplier to secure a strategic sale, the buyer spends $5 The 1997 Software Market Report, produced by Sentry Technology Group's Research Services Unit, shows substantial and dramatic growth of software sales. In 1997, Sentry forecasts that corporate software spending in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. alone will reach $96 billion. "While $96 billion in software sales is impressive," said William A. Gannon Jr., Sentry Research Services president, "The fact is, nearly $20 billion of these expenditures will deliver little or no return on investment -- or worse, even generate a negative ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). . "The magnitude of these inefficiencies is particularly ironic," he continued, "when you consider that IT investments are supposed to improve productivity, accelerate automation and drive better business decisions!" This growing gulf between IT buyers and suppliers places both parties at risk because their relationships can become adversarial ad·ver·sar·i·al adj. Relating to or characteristic of an adversary; involving antagonistic elements: "the chasm between management and labor in this country, an often needlessly adversarial . . . , making value even harder to realize. Sentry defines value by hard-dollar economic losses, inefficiencies and cost of missed opportunities. "The primary drivers of under-realized, missed opportunities and lost value are the changing business dynamics of buying organizations and the shifting competitive landscape of suppliers. Evolving business processes, solution models and management methods make it difficult for IT buyers and suppliers to align their objectives. The result is that buyers are increasingly likely to spread their IT budget dollars across a wider group of suppliers, seeking to spread the risk, but also diffusing purchase power, receiving fewer value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. , increasing supplier turnover and decreasing productivity," he said. The cycle is then continued by suppliers. More competition means less leverage, fewer strategic successes, shrinking margins and growing cost of sales, less buyer satisfaction and more general turmoil. Sentry's Consulting Services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" organization and its work with dozens of IT buyer companies shows that only a decade ago, on average, the Fortune 500 firms has less than 50 relationships with IT suppliers. Today, more than 250 relationships are common, and by the year 2007 this will more than double! "In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently ," Gannon said, "there are too many suppliers chasing too few opportunities and the overwhelming amount of choices is forcing buyers to lose control of their budgets. This is why the cost of sales has risen so high. Sentry has determined that for every dollar a supplier spends to win a strategic sale, the buying organization spends five dollars to buy. "There is good new, however," Gannon pointed out. "Of the nearly 1,700 buyers surveyed in Sentry's 16th annual Software Market Report, a small but growing share of buyers are changing their IT purchase processes in a search of greater return on investment. They are aggressively seeking methods to better differentiate and select suppliers with whom they can establish long-term, value-based strategic relationships." The data indicates that a significant share of buyers would like to work with fewer suppliers in order to consolidate and more effectively leverage their purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. . These buyers also want to gain more value-added services and support, while their suppliers see significant value improvements, longer relationships, less turnover and perceive a "win/win" relationship. For the complete Sentry Research Services Brief entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Are You Strategic," contact Jill Longtine at 800-225-9200, ext. 187. The complete 1997 Software Market Report is available for $795 if ordered before July 1; $995 thereafter. Sentry Technology Group is a unique combination of management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects , market research and business communications for customers and suppliers of Information Technology products and services. The organization's goal is to foster better business practices between buyers and sellers of IT with the ultimate objective of enabling corporations to achieve bottom-line savings from their IT investments. CONTACT: Sentry Technology Group Pamela Burrows Burrows is a provincial electoral division in the Canadian province of Manitoba. It was created by redistribution in 1957, and formally came into existence in the provincial election of 1958. The riding is located in the northern part of Winnipeg. 508/366-2031, ext. 133 STGBurrows@aol.com or Steven Swartz Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most 617/245-8890 73621.1723@compuserve.com |
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