Customer relationship management (CRM) has rejuvenated itself. The worldwide market has returned to positive growth and a local supplier says demand has taken off.
Research firm International Data Corporation (IDC) said this week that the CRM market had returned to positive growth in 2004 due to a resurgence of demand by users. It said last year the market grew by 8% to total market revenues of $8.8 billion (R160 billion).
"During the market downturn of the early 2000s, customers sharpened their buying criteria, enabling them to move quickly to invest in CRM projects when IT and line of business budgets thawed in 2004. This study also finds that buyers` intentions to implement CRM and to focus on CRM initiatives remain high in 2005," IDC said.
Gary Stanley, CEO and founder of Cape Town-based CRM vendor Gush CRM, says his experience echoes the IDC view.
"Our market has really taken off in the past year. For our first three years of business we had about 97 clients. Now we sign up the same number on a monthly basis."
Stanley says 60% of his new customer enquiries are coming from North America, 25% from Europe with the UK taking up about half of that, while African customers account for about 5% of the queries.
"Many of our new customers fall within the 50 to 500 employee range of companies."
"The growth of the relative newcomers as well as new functionality and licensing models from established vendors have rejuvenated the market and turned the spotlight on true customer need. End-users are the winners in this shift as the market now focuses on business benefits rather than functionality for the sake of functionality," says Mary Wardley, VP of CRM applications research at IDC.
"Users are focusing increasingly on the business benefits of CRM and what the application can deliver," says Stanley.
According to IDC, Siebel, Oracle and SAP, all established CRM suppliers, dominate the top three CRM applications market positions. Siebel, the market leader, captured 10.7% market share in 2004, while Oracle, with the supplement from its PeopleSoft acquisition, barely moved ahead of SAP to capture second place.
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