Firms Face Critical Decision on AI-Driven CRM

Half of all companies will need to modernize their CRM systems by 2026 to take advantage of new artificial intelligence capabilities, ISG urges in a new report.
Modern CRM systems have evolved from simple data repositories to complex, AI-driven platforms that help maximize sales effectiveness and achieve revenue and customer service targets, the research firm says.
These systems improve data management and deliver predictive analytics and insights that let sales teams understand and manage sales opportunities and engagement and customer service teams resolve customer issues and generate new revenue opportunities, ISG says.
“CRM ensures that all customer-facing teams have access to up-to-date information, but outdated CRM systems can force teams to employ inefficient workarounds,” says Stephen Hurrell, director of research for the Office of Revenue at ISG Software Research. “New data-driven AI technology is necessary to gain market and competitive insights, engage effectively, and achieve optimal outcomes. To stay competitive, continuous alignment of CRM systems with business needs is imperative.”
But today, many companies’ approaches to CRM rely on scattered methods of interacting with customers and consume unnecessary resources, limiting revenue growth, the firm says.
Some providers have delivered add-ons that improve the ability of CRM systems to provide relevant, actionable insights, but the efficacy of these add-ons depends on the quality of the original base data, including customer data and activity records, ISG says.
The ISG report says CRM users now face a critical decision to reimplement existing systems or shift to a new provider to gain AI-driven capabilities.
Modern CRM systems should support integrated prospect and customer engagement, standardized processes, and automated data collection, it says further, noting that newer capabilities, many driven by AI, are designed to improve the quality and speed of responses to customers and prospects.
In sales, these capabilities provide new insights into who and when to engage, and in service, they provide more integrated insights into new opportunities that turn service into an additional sales and engagement channel.
“Today’s CRM platforms should be intelligent systems that help marketing, sales, service, and partner teams achieve enterprise and individual objectives by optimizing customer interactions and driving business growth,” says Mark Smith, a partner of ISG Software Research. “Unfortunately, the reality is that enterprises have disconnected and very customized deployments that are not easily advanced into the era of automated and AI capabilities. As a result, they struggle with internal inefficiencies.”

AI in CRM: A Huge Growth Opportunity

Research firm InsightAce Analytic has projected the global market for artificial intelligence in CRM to surge from $14.8 billion last year to more than $138.6 billion by 2031, growing at a robust compound annual rate of 32.5 percent.

AI technologies being incorporated into CRM systems include machine learning, natural language processing, image and speech recognition, predictive analytics, chatbots, and virtual assistants to improve customer service, automate customer interactions, streamline company operations, evaluate vast amounts of customer data, forecast consumer behavior, and deliver individualized customer experiences, according to the research firm.

CRM systems, InsightAce warns, “may soon become antiquated due to the swift speed at which AI technology is developing. Staying current with emerging trends necessitates ongoing investment and adjustment.”

The firm expects growing consumer demand for personalized experience to propel the market growth. “Consumers increasingly anticipate individualized service from companies. By evaluating client data and forecasting needs, AI helps CRM systems provide customized experiences that increase customer pleasure and loyalty,” it says.

“Sophisticated methods for data analysis are required due to the exponential growth of client data from several sources (social media, emails, purchase history). AI facilitates the effective management and extraction of useful insights from massive datasets,” it says further.

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