Hot Areas for CRM Investment Include Mobility, Social Media and Technologies, Web Analytics, and E-Commerce

Organizations are leveraging CRM technologies as a major part of their digital initiatives to enhance the customer experience, according to Gartner, Inc. Gartner said that demand for modern technology customer relationships is driving refreshed or expanded integration and usage of all areas of CRM software. The outlook continues to be positive for CRM as buyers focus on technologies that enable more-targeted customer interactions in multichannel environments.

“CRM will be at the heart of digital initiatives in coming years. This is one technology area that will definitely get funding as digital business is crucial to remaining competitive,” said Joanne Correia, research vice president at Gartner. “Hot areas for CRM investment include mobility, social media and technologies, Web analytics and e-commerce.”

Gartner expects CRM market growth to stay moderate in 2014, following three strong years of investment. CRM software revenue is forecast to reach $23.9 billion in 2014, with cloud revenue accounting for 49 percent. SaaS- or cloud-based CRM deployments currently represent more than 40 percent of all CRM deployments, and look set to reach 50 percent during 2015.

“Unsurprisingly, high-tech, banking, insurance, securities, telecommunications, pharmaceutical, consumer goods, IT manufacturing and IT services vertical industries will continue to be the largest spenders on CRM as they have the widest use of different types of CRM applications and technologies,” said Ed Thompson, vice president and distinguished analyst at Gartner. “All these industries are also increasing investment in emerging economies, further driving spend.”

Line-of-Business Buyers Have Different Operational Requirements for CRM

Customer support and service (CSS) has IT leaders, vice presidents and directors of customer service involved in customer support/relationship initiatives and are looking at the targeted use of big data analytics, peer-to-peer communities and the evolving customer engagement center (CEC), which is the next generation of the customer service contact center, for critical processes and technologies. A central focus of the CSS organization is on how to engineer consistent, differentiated, cross-channel customer experiences, while supporting the need for increased use of customer self-service.

E-commerce is top of mind for CEOs, chief marketing officers (CMOs) and senior executives as they seek the ability to improve overall customer experience, profitability and sales. At the same time, marketing technology is a hot area for IT investment, but solution decisions are increasingly being driven by CMOs and the marketing organization, with little to no IT involvement. CIOs will need to work more closely with CMOs and marketing leaders to adapt to the increasing technology demands emanating across the marketing organization. Mounting pressure on CMOs to drive growth, improve accountability and reduce costs is pushing marketing organizations to make significant marketing technology investments across a broad set of applications and functionality.

Internet of Things Joins the Nexus of Forces as the Fifth Driver of CRM

The main drivers behind the hot topics in CRM — cloud, social, mobile and big data — are being joined by a fifth driver: the Internet of Things, where sensors connecting things to the Internet create new services previously not thought of.

• Social — In the sales, marketing and customer service departments, marketing is being forced to monitor, communicate and engage in social commerce business with several hundred public social networks. Customer service has to respond to tweets and Facebook and LinkedIn discussions, as new service channels and sales are now using social media as a source of new leads and intelligence on prospects.
• Mobile — Smartphones, tablets and mobile apps are forcing change at an even faster rate than social networks. Connections to the Internet via smartphones will exceed PC users by the end of 2014 and smartphones have already overtaken PCs as the most common tool for accessing social networks in most countries. Bring your own device (BYOD) policies are springing up around the globe as IT departments are forced to support a proliferation of devices. It is tablets, however, that are causing the most disruption as sales departments and board directors purchase them and then demand support.
• Big Data — The marketing department has been most impacted by the explosion in customer information available to businesses during the past five years. Predictive analytic models for churn analysis, product and service recommendations direct to the customer, and/or sales prompts for salespeople are all becoming more sophisticated. Thus, the data is available and the tools are emerging, but the problem is the lack of skills and resources to use the tools.
• Cloud — This driver is a decade old now in CRM, having started back in the late 1990s with the rise of application service providers. In many ways, the low-hanging fruit for cloud adoption has already been picked. The remaining areas of CRM application functionality will be ever harder to adopt in a cloud delivery model, so the switch to cloud will steadily slow.
• Internet of Things — As cars, buildings, bodies and chairs are connected to the Internet and as the price of sensors and communications drops down toward $1, the automotive, construction, healthcare and hospitality industries, among many others, will be transformed. At the forefront of this shift will be sales, marketing and customer service departments in promoting, selling and supporting the new services.

“These drivers are spurring a critical need for more traditional operational CRM as CRM continues to top software investment priorities. This further validates businesses’ focus on enhancing customer experience and consistent investment in CRM software, especially in CSS, marketing and sales software,” said Ms. Correia.

More detailed analysis is available in the report “Market Trends: CRM Digital Initiatives Focus on Sales, Marketing, Support and E-Commerce.” The report is available on Gartner’s website athttp://www.gartner.com/doc/2657016.

Gartner analysts will share additional information on CRM trends at the Gartner Customer 360 Summit 2014 being held May 19-21 in Orlando, Florida. Additional information is available at www.gartner.com/us/crm. Members of the media can register by contacting Janessa Rivera at janessa.rivera@gartner.com. 

CRM trends will also be discussed at the Gartner Customer Strategies & Technologies Summit 2014, on April 28-29, in London. For more information on this Summit, please visit www.europe.gartner.com/crm. Members of the press can register for the Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com. 

Information from the Summits will be shared on Twitter at http://twitter.com/Gartner_inc using #GartnerCRM.

Contacts

• Janessa Rivera
• Gartner
• janessa.rivera@gartner.com

• Rob van der Meulen
• Gartner
• rob.vandermeulen@gartner.com

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner in over 13,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 5,800 associates, including 1,450 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

Source: http://www.gartner.com/newsroom/id/2665215

When looking at CRM buying decisions, I compare CRM buyers to home buyers, specifically first time buyers and previous home owners. Previous home owners (in this case CRM owners) make decisions based on their previous experience (in most cases with a previous organization). Veteran CRM users know what they need and cut to the chase with a short list of top requirements. First time CRM buyers are like first time home owners wishing for a fully loaded house; pool, media room, spa, etc. and a bunch of features they’ll rarely use.

Here’s the problem, in most cases, and as I see it from our own experience. When a good leadership team is involved in planning to implement technology like CRM or ERP, their first priority usually is based on what the ‘company needs’ in order to a) make them more efficient in their current processes, b) deliver additional value in areas they have minimal or no capabilities, and c) become an investment for the business that either helps increase revenue, provides a savings or does both. Of course there are other areas of consideration, but we’ll keep it basic.

The 4000 questions in the RFP process usually begins when you appoint the wrong person to lead the project, specifically someone who isn’t part of the leadership team and doesn’t have a holistic perspective of the company’s operations, workflow and ultimate requirements. Usually you end up with ‘Mikey’ (the person in the office who will eat anything) assigned to the project. Rather than identifying in detail what the company’s needs are, he walks around the office asking the users what ‘their ‘ needs are, just as if he was taking lunch orders. When you ask people what their opinion is on a company related matter, they often feel obligated to participate they’re going to provide information based on their personal experience and individual requirements, and disregard the overall company needs. Relevant or not, you’ll get an answer and your list. Not to mention that a lot of that list was created beginning with the words, “It would be nice if it…” rather than, “It absolutely must…”

While a CRM solution is designed to streamline workflow and ultimately make the jobs of the employees easier, the solution is really for the business. Between personnel needs and the company’s needs, the company is the only constant in the equation. Something leadership teams should remember when creating their RFPs.