Economic Outlook: Customer Relationships Management (Market Focus)

Publication Date	September 2007
Publisher	Datamonitor
Product Type	Brief
Pages	20
ISBN Number	not applicable
Product Code	DAT07278

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Summary

Introduction

As the increasing number of organizations understands the importance of positive customer experiences and strong customer relationships, the market for CRM applications continues to expand. In this brief, Datamonitor provides an analysis of the main trends affecting the market and advises vendors on how to respond to the changing market conditions.

Scope

Discusses the key trends impacting the current state of the customer relationship management market.
Analyzes which market segments and industries are driving investments in the customer relationship management market.
Discusses changing market conditions and vendor go-to-market strategies.
Provides a market forecast of expenditure for the forthcoming five years.

Highlights

Customer relationship management (CRM) applications are a crucial element of enterprise application portfolio. Despite relatively high penetration rate of CRM solutions, the market is not maturing and the outlook for vendors is positive: investment, adoption and product revenues are all set to rise.

Enterprises still list strategic issues as the top inhibitors. Issues such as solution complexity, high total cost of ownership and lack of strategic support of CRM installations are causing enterprises to be cautious when considering or deploying CRM solutions.

The market is increasingly segmented along the enterprise size axis. In such market deployment and go-to-market strategies are crucial. On-demand solutions have emerged as credible alternative to traditional on-premise solutions. Although this method does address certain adoption inhibitors, CRM on-demand alone can not transform the market.

Reasons to Purchase

Understand the primary market trends behind the customer relationship management application market.
Identify market segments which are driving growth in order to position your solutions adequately.
Align your go-to-market strategies with the current market opportunities and the long-term trends in the CRM application market.

Content

Catalyst
Summary
Analysis
- Market definition
- Enterprise applications support CRM methodologies
- Second wave of CRM?
- Market development
- CRM penetration and investment are related to the enterprise size
- Market trends
- Market conditions
- Nurturing relationships, not capturing transactions
- The public sector: citizens or constituents can be served using CRM methodologies
- CRM market trends: drivers and inhibitors to CRM adoption
- The market is still apprehensive following early CRM implementations
- Business process issues can block deployment of CRM
- Total cost of ownership can be high and return on investment (ROI) unclear
- Transaction-focused CRM can not capture the complexity of customer relationships
- CRM is converging with communication technologies
- Basic CRM functionality is improving
- Vendors are streamlining user interfaces
- Enterprise application suites drive CRM adoption
- On-demand CRM
- Subscription-based licenses and hosted architecture can address certain inhibitors to CRM adoption
- Lack of robust functionality and service availability are perceived as obstacles to adoption
- The on-demand CRM market is increasingly competitive
- Market trends favor hybrid on-demand / on-premise solutions
- CRM go-to-market strategies
- Optimal vertical strategy depends on vendor positioning
- On-demand CRM emerges as a cornerstone of SME go-to-market strategy
- Market size
- The CRM market will continue to expand during the next five years
- SMEs will drive CRM adoption but large enterprises will still account for the majority of the revenues
- The rate of growth within the Telecommunications, Public Sector and Healthcare sectors will accelerate
Summary
Appendix
- Definitions
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Tables
- Table 1: Which of the following technologies do you currently have or use, and which would you have in six months and 24 months time?
- Table 2: Which of the following technologies do you currently have or use, and which would you have in six months and 24 months time? - CRM responses only by enterprise size (no. of employees)
- Table 3: How important are the following criteria when selecting CRM solutions? Please rate on scale from 1 to 4 (where 4 = extremely important, and 1 = not important at all
- Table 4: Datamonitor's CRM revenue model ($ millions, product license and maintenance revenues)
- Table 5: Datamonitor's CRM revenue model ($ millions, product license revenues only) - by enterprise size
List of Figures
- Figure 1: Customer relationship management (CRM) process cycle
- Figure 2: CRM application stack and adjacent modules
- Figure 3: Despite high penetration rate, many enterprises are planning to invest in CRM in the next two years
- Figure 4: CRM investment and penetration levels are related to the enterprise size
- Figure 5: IT decision makers believe vertical specialization is the least important factor in solution selection
- Figure 6: The CRM market is set for significant growth over the next five years
- Figure 7: Small and medium enterprises will be of increasing importance