Datamonitor looks at the prospects for xRM technologies

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By: Wise Marketer Staff |

Posted on May 2, 2002

Datamonitor looks at the prospects for xRM technologies

A Datamonitor report released today examines the market prospects for the "offspring" of CRM - all those other three letter acronyms ending in "RM"...

CRM is proving to be a fecund parent: the "xRM" range is steadily growing. For "x", substitute the first letter of almost any element or function relating to business. The cynical might say that this is simply a ploy on the part of CRM vendors to expand the market. However, it would seem that the new additions - like PRM (partner relationship management) and ERM (employee relationship management) - do have a valid and even important part to play. Many others will doubtlessly follow.

But, before you hurry off to think up a few new ones and order that Ferrari, ponder on this: a new Datamonitor report, From CRM to xRM:  Qualifying short-term and long-term opportunities in relationship management technologies, concludes that, in the short term, the market opportunity for these xRM products is actually limited: in the current economic climate, they will not be perceived by businesses as a 'necessary' investment.

Nice to have At present CRM accounts for 80% of the market, and it is set to remain by far the largest of the RM technologies in the near future. Datamonitor forecasts that in 2006, CRM licence revenues alone will make up some US$11.9 billion worth of the global US$15.8 billion xRM software applications market. That's about 75% of it. And corporate IT spending priorities mean that investment in some xRM technologies is in the "nice to have" category, not the "must have". According to Datamonitor Technology analyst and author of the report, Andreas Kolind, "In tough times, companies need to focus on actively managing all enterprise relationships to drive down cost and increase revenues. But this is not the time for CRM vendors to diversify beyond their means. Vendors should therefore admit that best-of-breed implementation is a reality, and focus on developing technologies where they have a proven track record."

Fastest growing Of the five xRM technologies profiled and sized in the report, supplier relationship management and partner relationship management are the fastest growing segments. The need to gain better visibility of the supply chain through strategic sourcing has driven many companies in the manufacturing and retail sector to invest in SRM solutions. Similarly, with indirect channels accounting for upwards of 40% of revenues for the technology, telecoms and manufacturing industries, the need to manage distributors, resellers and other partners is pushing many companies to implement PRM systems.

North America leads According to Datamonitor, the largest market for xRM is North America. In 2006, the EMEA (European, Middle-East and African) market will reach 38% of the global market - some US$6 billion. Within the EMEA market, the UK, Germany and France will continue to account for over half of revenues, while emerging markets will be Italy, Spain and the Nordics. In Asia-Pacific, the countries that will lead the adoption of xRM solutions will be Japan, Korea and Taiwan. This region will represent $1.4bn by 2006.

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