CRM Is a Priority Overseas

According to new reports by the Economist Intelligence Unit (EIU), customer-service issues and CRM initiatives have become a major factor in IT budgeting and prioritization. The two studies, both sponsored by SAP, focus on the Asia Pacific market and the United Kingdom, and offer a glimpse of how overseas companies rate CRM among their list of pressing needs. Laurel West, senior editor with the EIU and primary author of the Asia Pacific report, says the responses to the surveys reflect "what [executives] think on the subject and where it fits into their business plans." One report, "A Science, Not an Art: Growth Strategies in the U.K.," highlights a move away from advertising expenditures toward a newfound interest in CRM investment. "Only a quarter of respondents plan to spend more on advertising and marketing as a means of improving sales to existing customers, and just 37 percent say they will do so to lure new ones," it says. "Instead, respondents are placing more faith in better customer relationship management...and improved segmentation of the customer base in order to generate new sales." Asked to name the areas in which technology will have the greatest impact on revenue growth over the coming 12 months, U.K. respondents cited integration of processes and CRM as the top two. According to the other study, "Riding the New Wave: Growth Strategies For a Recovering Asia-Pacific," 41 percent of senior executives in the region see efficient CRM systems as "crucial" to the success of multinational and local companies in the current environment. Consumer demand, these execs say, will be the driving force in revenue growth, and that emphasis, West says, is an outgrowth of a "new focus on improving business processes and getting closer to customers. [That] represents a change from the boom years in Asia, when companies could expect high growth based simply on the region's booming economies." Current economic trends require an approach that focuses on improving customer-facing operations. Productivity concerns are also a factor. To increase productivity, 61 percent of respondents said they planned to focus on improving IT-enabled customer service processes, and 52 percent said collaboration with suppliers, partners, and customers was on their list of planned improvements. "The increased focus on CRM is a reflection of increased competition in the market and less-certain growth prospects, compared to the boom years of the early 1990s," West says. It's also significant that "competitive pricing pressures were listed as the greatest constraint on growth in both Asia [57 percent of respondents] and the U.K. [49 percent]," she says. Among the other regional findings:

India: 35.6 percent of local executives plan to substantially increase their investment in CRM

China: 45 percent of local executives believe IT will most greatly affect revenue growth in CRM/customer service

Australia: 41 percent of local executives plan to substantially increase their investment in CRM

Singapore: 58 percent of local executives expect IT to have the greatest impact on improved customer service/CRM

South Korea: 30 percent of respondents view customer service as a key competitive advantage in periods of economic growth.

West says she was surprised to see a uniformity of response in both regions: "The results [in Asia Pacific] are not that different from [those of] our U.K. study. We have a tendency to think that we [all] live in a different world, but many of the issues are the same. Price pressure, for example, is obviously a global phenomenon." Related articles: CRM World Domination Vendors are finding that there are regions that are just starting to warm to CRM. Microsoft CRM Goes Global Onyx Expands Its Global Focus