The total CRM services market is expected to reach US$15.5 billion by the year 2006, growing at a compound annual rate of 20%, according to recent research by IDC. The global market, including planning, implementation, operations management, training and support, represented US$6.4 billion in Europe in 2001.
IDC says that this market is expected to grow favourably, with high growth potential being seen in hosting services, as many companies do not want to take the responsibility of implementing and maintaining a CRM package themselves.
The struggle for ROI
The new research reveals that many companies are currently struggling to justify the returns on their CRM investments. It also emphasizes that customer needs have to be addressed by defining a customer-driven strategy to align short-term tactical issues with long-term strategic planning. IDC's top recommendations for services vendors include:
· Quantifying their return on investment;
· Developing a track record of success stories;
· Establishing data protection business rules;
· Avoiding the 'big bang' approach to CRM implementations.
The benefits of CRM investments are often difficult to predict and capture because many of them cannot be expressed in tangible returns. Rasika Versleijen-Pradhan, senior analyst for IDC's European CRM services research, explained: "Identifying both incremental costs and benefits will help determine the value-added and business potential of the services offered. So, it is important that service vendors are able to develop the appropriate methodologies and tools prior to large CRM investment, and to check the viability of the ROI parameters throughout the implementation."
Fastest growth
Developing expertise in mobile CRM capabilities will be vital once technology catches up with customer expectations, according to IDC. Industries with large numbers of remote workers have a higher propensity towards mobile adoption, as mobile technology provides quick and easy access to customer information, allowing faster reactions to changing situations. According to Pradhan, "this development will produce measurable ROI and offer businesses strategic and tactical advantage over their competition."
In terms of CRM service opportunity in key vertical markets, the report suggests that transportation, travel, retail, manufacturing and communications will grow most quickly in the five-year period to 2006.
European results in
In Europe the Nordic and Southern regions remain the fastest growing areas in terms of spending on CRM services. In its report, European CRM Services Forecast and Analysis 2001-2006, IDC gives a comprehensive overview of the Western European CRM services market, with specific regard to spending for each of the 16 countries as well as by industry, highlighting drivers, trends and predictions. It also presents a forecast for the market from 2001 to 2006 including a split for total CRM services by activities, engagements and customer care services.
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