There has been a 46% increase in Australia's CRM software market, rising from US$54 million in 2000 to US$79 million in 2001, according to new research from IDC. Fuelled by tie-in ratios to ERM implementations (which are on the rise again in the mid-market), the firm predicts the market will continue to grow to almost US$103 million by the end of 2002 - a growth rate of 30%.
IDC says that, having spoken with companies in the region who have implemented CRM during 2001, there seems to be a high attachment rate to both ERM and SCM projects. Standalone implementations have been found to usually focus on one segment of CRM such as sales force automation or customer service.
In analysing the key trends for the CRM software market beyond 2002, the firm suggests that there will be a switch of focus from sales to services, focussing on simple, practical, integrated solutions. As IDC puts it, the days of monolithic implementations are numbered. However, CRM software vendors will find that companies are not willing to spend large amounts of money on CRM implementations, and are increasingly looking for the return on investment.
The CRM software market has several accelerators in the Australian market. The increased availability of analytical CRM, with vendors emphasizing it more, is strengthening companies' ability to extend their knowledge and understanding of customers. In the past, CRM focused on gathering data about customers rather than deriving actionable business plans from that information. Analytical CRM applications have boosted growth in the operational CRM market by enabling intelligent marketing campaigns and proactive sales calls, and by providing an overall 'customer view' for customer service representatives.
However, smaller budgets - as well as the general economic outlook - have led to longer sales cycles for CRM software vendors. And the publicity fallout from the many failed CRM projects has also led companies to proceed with caution.