IDC expects competition within the CRM services market to heat up

The customer relationship management (CRM) services competitive landscape is about to get much more crowded. IDC continues to see a variety of vendors from diverse backgrounds setting up stakes in this land of opportunity - an opportunity that will approach $90 billion worldwide by 2003, more than 2.5 times larger than it was in just 1998.

IDC divides the CRM competitive landscape into the following categories based on a vendor`s heritage: business and IT consultants, technology owners, telecommunications service providers/carriers, systems integrators, CRM outsourcing providers, training vendors, and emerging players responding to CRM and ebusiness opportunities.

"Customer relationship management solutions will increasingly encompass a broader array of activities within the framework of a client`s overall business," said Katrina Menzigian, program manager for IDC`s Customer Relationship Services research. "As a result, CRM service vendors will experience increasing competition from a variety of existing and emerging players that are moving away from their traditional business lines to capture new opportunities in the CRM space."

Customer relationships are becoming more important to businesses, and as a result, businesses are turning to service vendors who can help them manage and leverage these relationships. CRM has historically been associated with front-office activities such as sales, marketing, and customer support. However, this view is now expanding to encompass back-office applications such as data marts and business intelligence as well.

"Technology is increasingly being perceived as the seamless integration of products and services that enables new approaches to business activities and remodels the ways in which people work and interact with one another," Menzigian said. "The key to success in the CRM marketplace will be service providers` ability to integrate technology solutions that provide clients with distinct competitive advantages."

BMI-T Comment

Locally, the IT Professional services market is in a boom of which CRM services is a segment. BMI-T has recently completed a CRM report, the first of its kind in South Africa. The results indicate that the consulting portion of CRM is certainly a very lucrative market. CRM is a strategic area and strong growth is expected in the next 4 years. The market is expected to be valued at more than a billion rands by end of 2000. This will mean, CRM alone will make up 16% of the IT services market in SA by the end of this year.