Dataquest: CRM Services Rising

Customer-relationship management software remains a bright spot in the overall gloomy IT landscape. The worldwide CRM services market reached $22 billion last year, a 10.6 percent increase from the year prior, according to Dataquest, a business unit of Gartner Group. And more good news is on the horizon: Dataquest forecasts this market to hit $25.3 billion this year, and $47 billion by 2006. So what's driving the CRM services market? The technology's promise to retain customers and boost the top line continues to resonate with companies recovering from a tough economy. While some large enterprises pause to re-evaluate their CRM strategies, the mid-market is ready to spend. Specifically, integrated enterprise architectures, new solution delivery models and an overall reduction in price points for software bode well for mid-market adoption of CRM, according to Dataquest. But CRM is wrought with custom development and integration challenges -- and thus CRM services should swell. CRM systems touch practically every major application inside a company, which means integrators well-versed in Web services should find a boatload of opportunity for tying disparate systems together. Moreover, business process management, including contact center outsourcing in support of CRM solutions, should also show healthy growth this year, according to Dataquest. Call it the dirty work of CRM projects. "In the coming year, the focus of CRM initiatives is expected to turn from operational and tactical CRM initiatives to CRM analytics and business intelligence, with Web-based customer support stabilizing, though still quite important," said Debashish Sinha, principal analyst for Gartner Dataquest's IT services program, in a statement. Not every CRM integrator, consultant and service-focused vendor stands to prosper, warns Dataquest. Simply put, the services market is heating up, the competition fierce. And the winning service providers will be those that produce a clear road map for phased implementations that "take into account near-term 'pain points' but which has a long-term view to execute on the strategy for the enterprise transformation to becoming customer-centric," stated Beth Eisenfeld, research director at Gartner. Tom Kaneshige also writes for Line56.com