CRM vendors gird for market rebound

High implementation costs and random returns on investment and integration considerations are limiting the CRM market as enterprises defer decisions, according to analysts.

Consolidation and acquisitions in the CRM market over the next 12 months will contribute to uncertainty in the short-term as enterprises defer decisions due to perceived risk from vendor change, said industry analyst group Frost & Sullivan.

However, the market is bouncing back from the tragic events of September 11 as CRM vendors are focus on the Asia-Pacific region sector as a "hot spot" for growth.

Industry analyst at Frost and Sullivan, Audrey William, who headed the analyst's CRM study, said "economic uncertainty which occurred across the globe following the [September 11] incident put a standstill on sales cycles and CRM spending."

Frost & Sullivan expects the Asia-Pacific CRM market to reach revenues of $US1.1 billion by 2005, growing at a compound annual growth rate (CAGR) of 35.2 per cent between 2001 and 2008. The analyst group says the outlook is "highly promising".

"All leading vendors are eyeing opportunities in China, Japan and Korea as the next hotspots".

Furthermore, banks, insurance companies and brokerages are aggressively moving into what is considered the next phase of CRM, CRM Analytics, according to the report.

With CRM analytic software tools, these companies can extract information from data warehouses and product data marts from disparate locations within the company to drive CRM-focused marketing and campaign management.

Frost & Sullivan say even the telecommunications sector, which witnessed low CRM deployments, has begun placing greater emphasis on CRM analytics, to lower the cost of customer acquisition, improve up-sell and cross-sell rations and win back lost customers with specific sales initiatives.

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