Customer Relationship Management

Published by: Key Note Publications Ltd

Published: Sep. 1, 2008 - 102 Pages

Table of Contents

Executive Summary

1. Introduction

OVERVIEW

DEFINITION

REPORT OBJECTIVES

PROBLEMS ENCOUNTERED

RESEARCH

2. Strategic Overview

MARKET DYNAMICS

CRM Growth

CRM and Web 2.0

Mergers and Acquisitions

CRM on the Move

MARKET SECTORS

TOTAL INDUSTRY VALUE AND GROWTH

Value

Table 1: Worldwide CRM Market Size ($bn), 2004-2008

Growth

DISTRIBUTION

COMPETITIVE STRUCTURE

Market Leaders

Table 2: Leading CRM Technology Companies by Position Among the Top 100 Most Influential Technology Companies, 2008

ADVERTISING and MARKETING

INDUSTRY AWARDS

CRM Magazine Awards 2007

Influential Leaders

Hall of Fame Entrant

Rising Stars

Market Leaders

The Elite

CRM Excellence Awards 2008

THE CONSUMER

Installed or Hosted CRM?

Installed Systems

Advantages

Disadvantages

Hosted Systems

Advantages

Disadvantages

CRM — Hosted Or On-Premise?

"Assessing Your Requirements

"Looking to the Future

"Total Cost of Ownership

"Process, Process, Process

"Tailor Made for Your Business

MARKET FORECASTS

Table 3: Forecast Worldwide Market for CRM Applications ($bn), 2009-2013

3. The On-Premise Market

BACKGROUND

MAJOR PLAYERS

Table 4: ISM Top 15 CRM Enterprise Winners, 2008

Amdocs Ltd 30

CDC Software Inc 31

Consona Corporation 31

FrontRange Solutions USA Inc 31

Infor Global Solutions Inc

Interchange Solutions Inc 32

Oncontact Software Corporation 32

Optima Technologies Inc

Oracle Corporation

Relavis Corporation

SalesPage Technologies LLC

SAP AG

Software Innovation ASA

StayinFront Inc

Update Software AG

Other CRM Vendors

SALES, MARKETING AND DISTRIBUTION

CONSUMER ISSUES

Table 5: Decision Drivers for Hosted/Installed CRM Systems Users (number and % of respondents), 2008

Table 6: Most Relevant CRM Achievements (% of respondents), 2008 38

Table 7: Contributing Factors to Budget Overruns (% of respondents with budget overruns), 2008

4. The Hosted Market

BACKGROUND

MAJOR PLAYERS

Table 8: ISM Top 15 CRM SMB Winners, 2008

Aplicor Inc

Ardexus Inc 40

Axonom Inc 41

Clear C2 Inc 41

Microsoft Corporation 41

Netsuite Inc

RightNow Technologies Inc

Sage Group PLC

salesforce.com Inc

Other Hosted CRM Vendors

MARKET MOVEMENTS

PRICE COMPARISONS

Table 9: Hosted CRM Monthly User Subscription Comparison ($), 2008

CRM VENDOR COMPARISONS

Entellium 45

salesforce.com 45

NetSuite 45

Microsoft CRM 45

Sage CRM 45

SugarCRM 45

5. An International Perspective

ECONOMIC OUTLOOK

THE ENVIRONMENT

LEADING PLAYERS — GLOBAL PRESENCE

Amdocs

Epicor

NetSuite

RightNow

SAP

6. PEST Analysis

POLITICAL FACTORS

ECONOMIC FACTORS

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

7. Industry Dynamics

INDUSTRY RESEARCH

Interviewees

Richard Bohn, President and Executive Editor, Sell More Now Inc

Neil Davey, Editor, MyCustomer.com

David Rance, Director, Round (UK) Ltd

Vivek Thomas, Managing Director, European, Middle East and Asia, Maximizer Software

Stephan Hughes, IT Director, Pafilia Developers

Questions and Answers

1. "What Are the Three Most Important Issues for Organisations When Considering Implementing a CRM System?"

Richard Bohn

Neil Davey

David Rance

Vivek Thomas

Customer Question: "What Are the Three Most Important Issues You Considered Before Implementing a CRM System?"

Stefan Hughes

2. "How Important is it for Organisations Implementing CRM Software Systems to Include Some Kind of Productivity/Sales/Satisfaction Measurement?"

Richard Bohn

Neil Davey

David Rance

Vivek Thomas

Customer Question: "How Important Was it for Your CRM Software System to Include Some Kind of Productivity/Sales/Satisfaction Measurement?"

Stefan Hughes

3. "Will Hosted or Installed Solutions Be the Most Dominant in the Next 5 Years — And Why?"

Richard Bohn

Neil Davey

David Rance

Vivek Thomas

4. "What Will Be the Other Major Trends in the Next 5 Years?"

Richard Bohn

Neil Davey

David Rance

Vivek Thomas

Customer Question: "What Improvements Do You Expect Your CRM System to Achieve Over the Next 5 Years?"

Stefan Hughes

5. "Will the CRM Industry Be Able to Withstand Any Economic Downturns?"

Richard Bohn

Neil Davey

David Rance

Vivek Thomas

Customer Question: "Will Your CRM System Help You Overcome Any Economic Downturn?"

Stefan Hughes

KEY NOTE SUMMARY

8. Company Profiles

EPICOR SOFTWARE CORPORATION

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 10: Financial Results for Epicor Software Corporation ($m), Years Ending 31st December 2006 and 2007

Future Company Developments

INFOR GLOBAL SOLUTIONS

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Future Company Developments

MAXIMIZER SOFTWARE INC

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 11: Financial Results for Maximizer Software Inc ($000), Years Ending 30th November 2006 and 2007

Future Company Developments

MICROSOFT CORPORATION

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 12: Financial Results for Microsoft Business Division ($m), Years Ending 30th June 2006 and 2007

Future Company Developments

NETSUITE INC

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 13: Financial Results for NetSuite Inc ($000), Years Ending 31st December 2006 and 2007

Future Company Developments

ORACLE CORPORATION

Corporate Strategy 74

Strengths and Weaknesses 74

Products 74

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 14: Financial Results for Oracle Corporation ($m), Years Ending 31st May 2006 and 2007

Future Company Developments

SAGE GROUP PLC

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

UK & Ireland

Mainland Europe

North America

Rest of World

Distribution

Profitability

Table 15: Financial Results for Sage Group PLC (£000), Years Ending 30th September 2005, 2006 and 2007

Table 16: Financial Results for Sage Group PLC by Geographical Division and Product Sector (£m), Year Ending 30th September 2007

Future Company Developments

SAP AG

Corporate Strategy

Strengths and Weaknesses

Products

New Product Development and Innovations

Marketing

Distribution

Profitability

Table 17: Financial Results for SAP AG (_m), Years Ending 31st December 2006 and 2007

Future Company Developments

9. The Future

overview

Table 18: CRM Plans for 2008 (% of respondents), 2008

MARKET DEVELOPMENTS

MARKET SHARE

MARKET FORECASTs

Table 19: Forecast Worldwide Market for CRM Applications ($bn), 2009-2013

10. Further Sources

Publications

Other Sources

Bisnode Sources

Abstract

Executive Summary The past 3 years have seen much consolidation in the customer relationship management (CRM) industry, with some of the large CRM players being acquired by even larger software development companies. The divide between enterprise resource planning (ERP) software developers and CRM software developers has closed, as all software developers have extended their product ranges to provide total business-management solutions for their customers and have either acquired the technologies to integrate the functions provided by different software solutions or have developed them themselves.

True to its early promise, CRM has turned out not to be a passing fad, but rather an essential way for organisations to understand their customers and, in the words of one of the respondents to the CRM roundtable discussion in this report, `sell more now!' Technological advances have allowed organisations to link their `front-office' functions (i.e. customer contact centre operations, marketing and sales) to their `back-office' enterprise solutions (i.e. accounting, inventory, payroll and personnel, stock control, etc.). This was, after the initial euphoria from CRM early adopters, the big issue, and one that barred companies without huge IT resources — and huge development budgets — from entering the CRM arena.

This has changed: CRM products, understanding of these products, and the technology involved have all improved, allowing vendors to begin marketing their products to small to medium businesses (SMBs).

At the same time, Web 2.0 — the much vaunted new era of Internet usage enabled by the widespread availability of broadband for greater access — has given rise to a new generation of Internet users, both developers and consumers, who use open-source technology and the Internet to collaborate and network online.

Users have become more mobile. CRM systems had already developed Web-based accessibility, enabling sales and other personnel access to the system via a Web browser, so it has been a small step for vendors to make the entire system available to the whole organisation this way but by hosting it themselves.

Hosted solutions provide a relatively low-cost entry for SMBs and, with this sector being increasingly targeted by vendors, the case for developing their own hosted offerings has proven irresistible: almost all of the major CRM (and ERP) vendors now offer hosted solutions.

Nonetheless, these companies face competition; there are a number of software companies, backed by the venture capital that has fuelled so much of the economic growth seen in recent years, that have entered the hosted CRM market, designing their products largely around sales and marketing processes.

For SMBs, facing up to a decline in economic growth, and increasing costs, the attraction of being able to increase productivity and to generate better-quality leads for a low monthly subscription fee is attractive. It is likely that vendors offering basic CRM functionality to SMBs will enjoy some growth during the next 2 to 3 years (i.e up to 2010 or 2011).

The question is whether or not they will survive. As customer needs change and the economy picks up again, SMBs may look for deeper functionality. This is where the established software providers — the giants in the marketplace, such as Oracle and SAP — will win. Unless the start-ups have something new to offer that has not been already developed by existing vendors, they will not survive in the long term.

The major software vendors are extremely acquisitive but, having already bought the CRM software leaders, their acquisitions now are all in the area of technological development, where the research and development (R&D) has been done by the target acquisition company, such as in mobile functionality.

Other targets for acquisition are companies that are strong in particular vertical markets: specialists in finance or pharmaceuticals, manufacturing or retail, with large customer bases, will be attractive to acquiring companies, as will be companies that already have a strong presence in emerging markets. Vendors are all looking to extend their geographical reach, into Eastern Europe, China, India and South America.

The CRM industry, even in the face of an economic decline, is growing. Indeed, many of the commentators Key Note spoke to for this report suggested that the economic decline would fuel the continued growth of the CRM industry, as CRM can be the tool used to make cost savings and increase productivity. Moreover, with hosted solutions ready to tap into this need, the short-term future for this sector especially looks very promising.

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