Putting CRM at the Heart of Your eBusiness Strategy: IDC Predicts CRM Solutions Will Grow 26% in Europe

COPENHAGEN – JULY 18, 2001 – The CRM solutions market in Europe, including software and services, will show a healthy yet sustainable growth of 26% over the next five years. IDC expects the improved focus on strategic planning around entire CRM implementations and expected technology enhancements to existing application designs and vertical expertise will contribute to this growth.


Many systems currently in place have proven difficult to implement, but offer excellent training ground for users and insight into how systems can be improved in the future. As a result, the critical need for a clear framework around developing a CRM implementation strategy is becoming easier to identify and address.

Given that the total market is expected to reach nearly $50 billion by 2005, IDC believes there is significant room for both software vendors and service providers to increase their business. "The emphasis lies in being able to develop strong CRM strategies while clearly defining the business value proposition for clients. Today, the issue is less about technology and more about how to optimize and differentiate through process improvement," said Rasika Versleijen-Pradhan, senior research analyst with IDC’s European eCRM Services research program.

The key to success is to balance the company’s internal requirements and develop revenue goals and profit margins while positioning for competitive growth in the future. "End users should expect that the competition is still fierce enough among CRM software and CRM services suppliers to drive better implementation practices based on improved technology and strategic planning," Versleijen-Pradhan said.

IDC analysts identify key CRM drivers as business pains associated with improving the focus on external relationships, visibility via the Internet, and operational efficiency. These drivers are very important among companies considering, or in the process of implementing, CRM solutions. "’Transparency to the market’ and the creation of a ‘total communication portal’ are phrases we often hear when we speak to end-user companies across Europe," said Bill Clough, senior research analyst with IDC’s European CRM Applications research program.

Among the largest perceived problems, according to a survey recently carried out by IDC, are integration issues, given that CRM solutions are generally quite complex, and understanding the business value, or ROI, of CRM. "Consequently there is a call for more education on the long-term benefits, which encompass not only the company itself but to an even larger extent suppliers and customers," Clough said.

This is the first time IDC has provided a combined view of the total European CRM solutions market, including both CRM applications and CRM services in the analysis. This will be followed up with case studies to be published later this year offering a view to success criteria on the combined market.

For more information on IDC’s views on the European CRM solutions market, please go to http://emea.idc.com/forum/webconf/software20010703.htm where you will be able to download slides and an audio presentation of our recently held web conference "Reality Check on the European CRM Solutions Market: High Value for Companies in a Down Market".

About IDC

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 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 organizations, ebusiness companies, and the financial community. Additional information can be found at emea.idc.com.

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


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