CRM Solutions Give a Boost to Data Warehousing Software and Services, IDC Says

FRAMINGHAM, MA – JULY 24, 2000 – Customer relationship management (CRM) solutions are increasingly being viewed in the context of a closed-loop CRM system. Data warehousing is a major component of these systems, and according to IDC, the market for CRM-centric data warehousing software and services is on the brink of explosive growth.

 

"Customer relationship management solutions go beyond automating customer interaction processes to automating the data warehousing supported processes of customer data integration, customer data analysis, and customer interaction personalization," said Dan Vesset, senior analyst for IDC's Data Warehousing and Information Access research program. "CRM-centric data warehousing is an integral part of the overall IT solution for the closed-loop CRM system."

There are four business process steps involved in creating a closed-loop CRM system:

1. Customer interaction

2. Customer data integration

3. Customer data analysis

4. Customer interaction personalization

The last three steps all involve data warehousing.

IDC forecasts worldwide revenues generated from CRM data warehousing software and services will explode from under $4.2 billion in 1999 to over $20 billion by 2004. While software currently accounts for approximately 52% of this value, the tide will shift in services favor. By 2004, IDC expects services will generate almost 55% of the market's revenues.

"The CRM-centric data warehousing model, while very beneficial to companies that use it, will present a number of challenges. First, there is no single software vendor that can support the four steps of the system. Next, business processes throughout the organizations that are implementing these systems will have to change. For example, organizational behaviors will have to be modified, the integrity of the data will have to be validated, and separate systems will have to be integrated," said Katrina Menzigian, program manager for IDC's Customer Relationship Management and Call Center Services research. "Companies that deliver CRM services are well suited to help organizations overcome these challenges and will have plenty of opportunities to do so."

Specifically, IDC believes service firms will have opportunities to integrate external customer data sources, manage and maintain customer data warehouses, evaluate and select technology, reevaluate and reengineer business process, and train end users.

IDC recently published Sizing the Opportunity for CRM-Centric Data Warehousing Software and Services (IDC #B22221). This report analyzes the market opportunity for CRM-centric data warehousing solutions. It forecasts revenues for CRM data warehousing software and services and customer data integration software, services, and content through 2004. It thoroughly discusses customer interaction, customer data integration, customer data analysis, and customer interaction personalization. Challenges and industry trends are also examined. To purchase the report, please contact Jim Nagle at 1-800-343-4952 extension 4549 or jnagle@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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