Customer Relationship Management Software Market Picks Up Steam in Australia, Says IDC
NORTH SYDNEY – JUNE 17, 2002 – Vendors' increasing focus on analytical CRM applications aids organisations to lay out effective marketing strategies. Latest research from IDC has noted a 46% increase in the Customer Relationship Management (CRM) software market in Australia, from US$54 million in 2000 to US$79 million in 2001.
Fuelled by tie-in ratios to ERM implementations which are on the rise again in the mid-market, IDC predicts that the market will continue to grow to almost US$103 million by the end of 2002 at a growth rate of 30%. Speaking to local companies who have implemented CRM software during 2001, there seems to be a high attachment rate to ERM and SCM projects, said Natasha David, IDC Senior Software Analyst.
Additionally, standalone implementations tend to focus on one segment of CRM such as sales force automation or customer service. Key trends for the CRM software market beyond 2002 are: there will be a switch of focus from sales to services; focus will be more on simple, practical, integrated solutions; and 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 they are quite vocal about looking for the return on investment of any such project, said Ms. David.
Software Licenses and Maintenance Revenue Only The CRM software market has several accelerators in the Australian market. The increased availability and emphasis of vendors on analytical CRM is strengthening organisations ability to extend their knowledge and understanding of customers.
In the past, CRM has focused more on simply gathering data on customers, rather than deriving actionable business plans around this information. Analytical CRM applications have fuelled growth in the operational CRM market by allowing organisations to drive intelligent marketing campaigns, proactive sales calls as well as providing an overall customer picture to customer service representatives.
However, smaller budgets as well as the general economic outlook have led to increased sales cycles for CRM software vendors. Additionally, publicity fallout from the high failure rate of CRM projects has also led organisations to proceed with caution.
CRM software vendors have also suffered in recent years from trying to be all things to all people, with the result that CRM has a murky meaning to most organisations, said Ms. David.
Instead, IDC recommends CRM software vendors to revisit their heritage and strengthen their brand in that area. Rather than being a CRM player, it will mean more to customers to understand the unique selling point of your portfolio. This is harder to achieve when you're running with the pack.
These results have been generated from the April 2002 release of the Asia/Pacific Enterprise Application Software Tracker (EAT). IDC has been tracking the market and vendor movements for Enterprise Resource Management (ERM), Customer Relationship Management (CRM) and Supply Chain Applications across six strategic country markets: Australia, China, India, Korea, Taiwan and Singapore. The first of its kind, EAT monitors the performance of Enterprise Application Software vendors and provides IDCs opinion on pertinent trends, market practices and events in the applications space.
IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and eBusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts local and worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organisations, eBusiness companies and the financial community. Additional information can be found at www.idc.com.au