News in Brief

Although the new age of hosted CRM has already been heralded by companies like Salesforce.com, Salesnet, NetLedger, and Upshot, a report by Aberdeen Group says that more companies are taking a serious look at the hosted model. According to the report, 35 percent of respondents said they already use hosted CRM products, and 85 percent of those not using hosted CRM said they would evaluate hosting as they enter the market for CRM solutions. The worldwide analytic applications software market is forecast to reach more than $4.8 billion by 2007, according to a report issued by IDC. CRM analytics is expected to grow the fastest, with a compound annual growth rate of 12.9 percent. Financial services firms need to invest in next generation CRM technology to retain their competitive edge, says a GartnerG2 report. New functionalities like call center text-mining, event triggering, profiling, lead management optimization, marketing resource management, scenario planning, dynamic pricing tools, and partner relationship management are key areas of investment, according to the report. U.S. call center spending in the financial services industry between 1998 and 2003 increased by 118 percent, according to a recent study by business intelligence firm Cutting Edge Information. However, analysts predict slow growth for the U.S. call center market overall going forward. Brian Huff, a lead analyst at Datamonitor, expects the entire U.S. contact center outsourcing market to see a mere 1 percent compounded annual growth rate from 2001 to 2007. This sluggish growth, analysts say, is due not only to market saturation, but also to the high price of labor gnawing away at profits. Customers are looking for better integration between applications, information systems, and portals, according to a recent Vignette survey of 400 IT executives. The study reveals that 80 percent of respondents prefer a consolidated management console for all Web applications and portals. Many companies are getting into offshore business process outsourcing (BPO), but enterprises should also examine the benefits from offshore "insourcing," according to Gartner. (Gartner defines insourcing as in-house outsourcing.) Enterprises wary of control and data-security issues can benefit from the advantage of "insourcing" offshore. According to Sujay Chohan, a research vice president for Gartner, companies are just beginning to understand the rewards and risks of offshore BPO, adding that "it has become clear that there is no right model for a given company."