Landscape is Shifting for CRM Solutions, Says IDC
NORTH SYDNEY – JUNE 4, 2003 – Research into the CRM solutions market has revealed Australian organisations are now taking CRM more seriously than ever. In a new study released today, IDC found the CRM solutions market was valued at A$422.1 million in 2002, including software license fees and associated services. Renewed interest in CRM solutions will see the Australian market grow at a compound annual growth rate of 6.7 percent to reach $582.9 million in 2007.
Total Australian CRM Solutions Market for 2002 ($A million)
CRM Software 169.1
CRM Services 253.0
Total CRM Solutions 422.1
Bharati Poorabia, Senior Analyst for enterprise applications, says Overall, the market has changed, and a theme of measurable ROI predominates buying decisions. This increased discipline means that organisations want to see how expenditure on CRM solutions will impact the enterprise and organisations are looking for direct payback, and better management of information.
In 2002, IDC estimated the Australian CRM Software market at A$169.1 million. . The Australian market was dominated by a few key providers at the top end, with the top two market leaders (Siebel and SAP) accounting for over 30% of the market in 2002. PeopleSoft and Oracle are pursuing their CRM strategies more aggressively. The low-end to midsize markets are seeing a continual encroachment of higher end vendors looking to penetrate what is the largest proportion of the Australian market.
According to IDC, the marketplace is also showing evidence of increased interest in analytics, which can provide better management information. "As CRM implementations are beginning to expand across the enterprise and become a more core part of guiding business philosophies, analytics can and will play an increasingly important role," said Ms. Poorabia
There is also a growing awareness that CRM strategy requires other enterprise-wide changes to be made in order to maximise business values including process re-engineering, organisational change, incentive program change or in some cases a complete transformation of corporate culture. These activities often require significant investment in professional services. In 2002, the Australian CRM Services market is estimated at A$253 million.
In the Australian marketplace, CRM is now being perceived as a business strategy which can positively impact profitability and customer satisfaction. To achieve these business objectives, CRM implementations are focusing on developing behaviour, and processes that support coordinated customer interactions throughout all customer channels, said Phillip Allen, Senior Analyst, Services.
In the CRM Services market, we are seeing the largest segment of spending on implementation, as organisations need to reengineer established business practices to accommodate applications architecture, or to customise the applications to fit their needs. The major costs are the necessary consulting and programming resource associated with implementation and integration. Additionally, support and training are also important to match business needs with the CRM solution, said Mr Allen.
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