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Forrester's Take on CRM in 2006: Ten Trends
[March 02, 2006]

Forrester's Take on CRM in 2006: Ten Trends


By DAVID SIMS

TMCnet CRM Alert Columnist

Yesterday we looked at the new Forrester report, "Trends 2006: Customer Relationship Management" authored by William Band, specifically the three drivers Band found for CRM in 2006.

The report also predicts that CRM license revenue will stay fairly static at $3 billion for the next three years, whereas will increase from the $8 billion at the end of 2005 to just under $10 billion by 2008.

Plus it shows that if someone in your industry recommends a consultant to you, there's a close to fifty-fifty chance he's doing it because he doesn't like you.

Today we'll look at what Forrester finds are the ten CRM trends to watch in 2006, broken down into three general groups: Five trends emanating from the fact that he finds enterprises are digesting their CRM technology investments and striving to get more worth out of these expenditures, three evident as CRM software technology firms continue to adapt to the demands of their customers and two resulting from the role professional services providers will play in helping enterprise get more value from CRM.



Of the most important trends the report presents, remediation of existing CRM implementations will continue, Band found after Forrester spoke with 22 large organizations in North America, Europe, and Asia to understand their methods for achieving business performance improvement from investment in CRM initiatives.

But a survey of 94 business and IT executives about their satisfaction with CRM applications only that only 29 percent were satisfied with how easy it is for CRM applications to integrate with existing data applications and sources, only 34 percent were happy with how easy it is to work with CRM software vendors after they have purchased applications and services and less than 50 percent felt that the business benefits achieved met their expectations, or stated that they were able to quickly realize value from the applications. Not good stats, folks.


In the second group of trends Band also finds that CRM will become part of business process platforms. "The rapid consolidation of the enterprise applications vendors during the last few years," he writes, "has made it possible for companies to go to a single vendor to buy cross-enterprise enabling functionality based on a single source of data."

Examples given include Amdocs' purchase of Clarify, thereby closing the gap between billing and CRM, and Oracle's multiple acquisitions of CRM such as PeopleSoft and Siebel. SAP and Microsoft are jumping on the trend as well.
 
And as far as consultants go, don't worry, guys, you'll stay in business, but if you want more referrals you need to do a better job, as Band finds that enterprises will be more demanding of their services partners. Buyer spending on IT consulting and systems integration services will continue to be significant in 2006, he concludes, "growing about 5 percent per year in line with the overall all expansion of IT expenditures.

North American spending on IT consulting (IT strategy, business process consulting, and change management) will reach $26.7 billion in the coming year, and expenditures on systems integration (packaged applications implementation, custom applications development, and applications integration) will reach $89.6 billion, but Forrester research also shows that four out of ten business and IT executives from 50 large organizations "would not recommend their CRM professional services provider to other companies."

Much more good stuff in the report, of course.

David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.

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