Enterprise applications Toolkit

What has CRM ever done for us?

Ed Thompson

Published: 02 Mar 2009 18:06 GMT

...still per user, but process-based pricing, fuelled by service-oriented architecture (SOA) and SaaS, is likely to appear and become commonplace by 2020.

In terms of architecture, CRM applications in the main have shifted from client-server, but there is a notable lag between availability and adoption. Fewer than 10 percent of organisations run the latest version of their CRM suite providers' technology.

From a market point of view, the CRM application market is not saturated. Fewer than 10 percent of small businesses in North America and Western Europe have packaged CRM applications in place in 2009, and only a small minority of large organisations have attained a single view of their customers.

Gartner estimates that total revenue for CRM software, including licences, maintenance and subscription revenues, in 2008 was more than $8bn worldwide. CRM consulting and system integration revenues will remain steady, at three times larger than the software revenue.

Recessionary focus
During the economic recession, the focus on customer experience and customer-centricity will drop as organisations switch focus to short-term, cost-reduction goals. After the downturn, the focus on the customer experience will continue to increase as the quantitative evidence catches up with the anecdotal, customers gain more choice and social networks become advocacy networks. Customer loyalty dramatically increases when an organisation does the right thing for its customers at times when those customers are suffering the most.

Furthermore, the vendor landscape has changed dramatically and is likely to change beyond recognition. The number of vendors disappearing through mergers is greater than newcomers, so acquisitions will outpace the number of new entrants. As a result, the market will continue to gradually consolidate. In addition, CRM applications will shift from a primarily operational approach to be more analytical and have a more social and collaborative focus.

Ed Thompson is a Gartner vice president and senior analyst. Gartner analysts will further discuss the lessons of the past and look to the future during the Gartner Customer Relationship Management Summit 2009, 3-4 March, at the Royal Lancaster hotel in London.