Consulting Firms to See Growth in 2003

Consulting firm META Group Inc. this week released what it calls its METAspectrum evaluation, covering the CRM consulting services market. The report indicates an expected growth in CRM services of 5 to 6 percent in 2003. METAspectrum evaluates vendors whose services include third-party strategy formulation, software selection, software implementation, business process improvement, team/end-user training, and deployment. META Group claims its studies indicate that clients have had a low level of confidence with regard to CRM service providers, based largely on early CRM stumbles usually associated with enterprisewide projects. According to META Group, clients that have deferred CRM evolution in 2001 and 2002 will be more inclined to move ahead, resulting in CRM services growth of 5 to 6 percent in 2003 and 8 to 10 percent in 2004-2005. The report added that as CRM consulting services firms mature, they realize the importance of business process versus technology. The CRM service providers have evolved beyond the notion that CRM excellence can be achieved through software implementation and have instead focused on value creation through CRM that speaks to client needs and leads to more tactical CRM endeavors, the report said. "As CRM services firms get more tactical, more affordable, and their strategies are easily executed and produce measurable visible results, the stigma of CRM initiatives has been lifted, and this will result in the growth we have calculated," says Michael Doane, vice president of Professional Services Strategies at META Group. Another finding was that a major market shift occurred from mid-2001 to late 2002, wherein fewer clients are investing in enterprisewide CRM endeavors. Instead, they are proceeding with smaller, shorter, and more tactical projects, and chaining these projects across time, according to the report. "A year and a half ago, if you stripped away the veneer of marketing campaigns, you would see that most CRM service firms were simply Siebel [Systems Inc.] implementers," Doane says. "Now that is not the case, as more and more service revenues are not vendor-related and are based on firms helping companies reemploy existing platforms to achieve better CRM ends." Doane also says that services firms that have not adopted this new type of business strategy may not survive, as those firms pushing process over technology are likely to gain the majority of new business.