Forrester Examines CRM Industry
The need to rethink the CRM solution strategy in the enterprise is driven by consolidation of leading customer relationship marketing vendors, intensified competition from larger and better capitalized business applications players and the rise of new software-as-a-service deployment options.
Taken from Forrester’s “CRM Market Size and Forecast, 2006 to 2010,” these key ideas are driving the trend that is demanding that enterprises continue to make significant investments in an effort to improve their customer-facing capabilities.
While growth in the market is assured, these market changes will dictate the expansion. “The need to extract additional value from past expenditures and a lack of game-changing innovations from vendors will result in moderate market growth,” stated William Band, Forrester analyst and writer of the CRM report.
The report highlighted specific elements that organizations must take into account before making decisions on new spending on CRM. Those key elements included:
Software-as-service for CRM is gaining acceptance in the market – impressive sales gains have been seen by both Salesforce.com (News - Alert) and RightNow Technologies. Buyers are taking more to the software-as-a-service (SaaS) deployment option, forcing an expansion of existing CRM vendors to generate their own SaaS offerings.
Microsoft and SAP (News - Alert) continue to drive into the CRM space – SAP has focused its strategy on enhancements in functionality and aggressive marketing to the SAP user base to better its position in the CRM area. Microsoft (News - Alert) has launched Microsoft Dynamics CRM 3.0 in an effort to take more of the share of the enterprise applications market.
Increased consolidation of CRM vendors – the report highlighted that Oracle (News - Alert) acquired PeopleSoft and then Siebel; SSA Global took on Epiphany to then be acquired by Infor. M2M Holdings is expected to take over Onyx.
In light of these changes in the CRM industry, the Forrester report indicates that enterprise buyers should be selective in their investments of high-value upgrades. The main focus should rest on customer-process optimization and support must be demanded from vendors to optimize existing CRM infrastructures.
CRM investments are one area where the organization cannot afford to be lax in its investment. If not selected or implemented properly, a CRM solution will represent little more than a waste of precious time and money.
Vendors are recognizing the opportunities in the market, but due to the complexity of the solutions and the higher demand within enterprises, the market is experiencing significant changes as only the strong and knowledgeable will survive. This should be taken into consideration for any organization looking to invest in a CRM solution as on-going support and timely updates to the system will be critical to its success.
Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.