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Understanding the TCO of SaaS CRM and KM in the contact centre

Ovum Plc
October 20, 2009
49 Pages - SKU: OV2497267

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This report looks at the current trends in the hosted contact centre customer relationship management (CRM) and knowledge management (KM) markets, and the effects on enterprise balance sheets of software-as-a-service (SaaS) versus on-premises solutions. It also presents a matrix of the leading global CRM vendors, which offers a valuable insight into the strengths of various hosted vendors’ CRM solutions.

EXECUTIVE SUMMARY: In a nutshell; Ovum view; Key messages; Flexible CRM deployment options are appealing in a difficult economy; Web self-service is high on the list of enterprises’ priorities; Enterprises need to consider the TCO rather than just the capex and opex advantages of SaaS; On-premises CRM vendors offer new pricing models in a highly competitive market; Vendors need to develop social media and KM strategies; Market opportunity; The CRM market is changing to include more flexible pricing and deployment options; Enterprises are focused on cost reduction and customer retention; CRM and KM play an increasingly important role in the contact centre; Flexible deployment methods are appealing in a difficult economy; SaaS CRM is growing from a mid-market option into larger enterprises; Vendors are changing their pricing for on-premises CRM to meet demands for more flexible pricing; KM is gaining traction to help agents and customers find accurate information; Web self-service is high on the list of enterprises’ priorities; Vendors are providing ways to monitor information from social media as usage grows; Vendors must overcome scepticism about hosted CRM and provide RoI statistics for KM; A difficult economy has led to a longer procurement cycle; There is still a stigma attached to hosted CRM and SaaS; The RoI for KM has yet to be fully understood; Technology evolution; CRM is evolving to include more flexible delivery and deployment options; Web-based delivery models are increasing in popularity; Platform-as-a-service provides users with even greater flexibility; CRM follows the market from on-premises to hosted, SaaS and now cloud computing; Enterprises are linking CRM solutions with business process objectives; Unified agent desktop solutions tie together different applications; On-demand CRM needs to be integrated with legacy applications; New features include contact priority management; KM vendors are embedding their solutions within CRM applications; Knowledge solutions are moving from agent-facing to customer-facing; Social media is influencing CRM vendors and CRM interfaces are becoming akin to online services; Vendors are adding interactive features and providing users with the ability to add and rate information; CRM and knowledge management applications now incorporate information from social media; Customer impact; Cost transparency especially pertinent in the current economic climate; TCO encompasses use, maintenance, support and services over a solution’s lifetime; The associated costs vary for different deployment models; Financial statements are impacted differently depending on the deployment model; Expensing treats subscription fees as a period expense; The non-cost-related benefits to SaaS include faster deployment and reduced IT resources; Disadvantages of the hosted model; The key target for SaaS has been SMEs; Hosted CRM is not industry-specific; Technology industry customer focus: iRobot; Travel and tourism customer focus: NJ Transit; Retail customer focus: Zappos; KM is deployed to ensure accurate information is available to agents and customers; Gaming industry customer focus: Second Life; Retail industry customer focus: online auctioneer; Competitive landscape; CRM vendors are targeting a broader range of customers; The competitive landscape for hosted CRM is disjointed; Acquisitions and increased demand for web self-service help KM play a greater role within the CRM market; SaaS CRM vendors include NetSuite, RightNow, Salesforce.com and TeamSupport; NetSuite; NetSuite: strengths; RightNow; RightNow: strengths; Salesforce.com; Salesforce.com: strengths; TeamSupport; TeamSupport: strengths; There are a number of vendors offering both on-demand and on-premises CRM; Oracle; Oracle E-Business Suite; Siebel CRM; Oracle: strengths; SAP; SAP: strengths; Microsoft; Microsoft: strengths; SugarCRM; SugarCRM: strengths; Proprietary on-premises vendors are gradually offering more flexible deployments; CDC Software; Ciboodle; Niche CSA and KM specialists remain mostly premises-based; KANA; KANA: strengths; KPS; KPS: strengths; InQuira; InQuira: strengths; nGenera; nGenera: strengths; Parature; Parature: strengths; Go-to-market approach; Hosted offerings require different go-to-market strategies and partners; Targeting the mid-market requires a diverse partner base including resellers and developers; As enterprises focus on business processes, services and integration become more important; Future trends; The on-premises market will remain strong despite continued growth in SaaS CRM; The Web enables changing consumer patterns, and the self-service trend will only increase; Mobile and video communications will become part of the knowledge base; Vendor acquisitions, partnerships and consolidation are likely; Recommendations; Provide cost transparency and flexible pricing for both on-demand and on-premises models; Map software capabilities to business processes; CRM vendors should work closely with partners or enhance their KM solutions; Develop a social media strategy; Definitions; CRM; Deployment models; Cloud computing
List of Tables: Table 1: Forecast segment revenues ($ million); Table 2: Simple cost differences between hosted and premises-based CRM deployments
List of Figures: Figure 1: Forecast global spending on hosted and premises-based CRM in the contact centre; Figure 2: Enterprises must provide consistent information across all channels; Figure 3: KM is embedded within CRM applications; Figure 4: Effects of the on-premises model on the financial statements of end users; Figure 5: Effects of the on-demand model on the financial statements of end users; Figure 6: Common customer pain points and how they can be resolved with KM solutions; Figure 7: Pure-play SaaS vendors and hybrid CRM vendors are competing more frequently; Figure 8: The leading CRM and KM vendors

Understanding the TCO of SaaS CRM and KM in the contact centre

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