Market Overview
What is CRM?
Industry Background
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Industry Background

Large companies have traditionally led the way in developing and implementing software applications such as customer relationship management (CRM) and Enterprise Resource Planning (ERP). These software applications are business tools designed to optimize certain processes and have a direct impact on company performance.


The drive behind the growth in CRM software was the realization it is difficult to differentiate one's company in the today's marketplace -- many companies now offer the same or similar products at the same or competitive prices. Integrating and streamlining internal processes became one of the few sources of competitive advantage available.


Another recent business trend is that marketing has moved from a brand or product-centered to a customer-centered approach.  Large companies began implementing CRM applications to help capitalize on their current customers, allocating large amounts of time and money into getting a system perfectly suited to their needs. 


However, these solutions were complex and characterized by relatively high initial purchase prices and a long and expensive implementation process, with uncertain end-results. It was very easy to spend almost $1 million for a proprietary CRM/ERP system. According to some industry estimates, more than 60 percent of the projects failed to meet expectations. One reason was that CRM was being used to only track and manage sales rather than to improve service and customer support. Another problem was that many projects were IT-driven rather than implemented as part of an integrated business process.


Small and medium-sized enterprises with limited budgets and IT support continued to miss out on the BeYond Horizons due to the exorbitant cost and complexity.


However, in recent years a new market has emerged that has leveled the playing field for these small companies. This market includes fully customizable CRM and ERP systems designed to be adapted by the end user and priced to allow even the smallest business the opportunity to capitalize on business-specific applications.


This SME market is extremely attractive sector for software application vendors in search of new sources of revenues. This is due to saturation of the top-end of the software market, lower penetration of enterprise applications in the mid-market hence a source of untapped revenues and sales potential, and reduced presence of legacy applications, which facilitates technology implementation and integration and potentially favors the use of single software providers. Today, there are almost 8 million SMEs in the US alone, with annual IT spending of more than $85 billion[2]. (We use the U.S. Small Business Administration definition for SMEs, which describes small enterprises as firms with less than 500 employees and medium-sized businesses as firms with anywhere between 500 to 1000 employees.)





CRM has advanced to the point where it is no longer viewed as just another software package but is seen and used as a competitive tool.  Every business will adapt CRM if they want to remain competitive in their industry. Successful SMEs recognize this and formulate strategies that will make them more competitive in Marketing, Sales, and Customer Care and integrate them into a CRM application.


Another important market trend is solutions to support increased demands for end user mobility. Leading firms are embracing mobile CRM (mCRM) to improve productivity, increase CRM system adoption, and enhance the customer experience. Mobile CRM is now a high priority for many field sales and service organizations as it allows reps to access and update CRM information anywhere they can use a mobile device. This leads to several key benefits including improved service scheduling, more professional sales interactions, and shorter cycle times in areas such as quote generation.


Web services and service-oriented technology will also become more central in both the users´ and vendors´ platform architectures. In future, these Web services environments will become the focal point for most application development and integration.






(1) The Free On-line Dictionary of Computing


(2) Wikipedia: