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Cloudy Outlook for Enterprise Customer Relationship Management

There's new research from software consultancy Software Advice on the way enterprises are deploying customer relationship management (CRM) systems. It shows sales force automation is the most requested application — and that the vast majority of enterprises prefer CRM in the cloud.

Emerging CRM Trends

The fact that most enterprises are moving toward the cloud is interesting enough.  But the idea that prospective buyers want to test best-of-breed solutions rather than integrated suites should come as a warning to big suite vendors.

The findings are contained in Software Advice: CRM Software BuyerView 2013, which was released this week. The report is based on an analysis of 5,279 interactions with prospective CRM buyers during the first nine months this year. From this analysis, Software Advice was able to identify four significant vendor-neutral trends:

Best-of-Breed

Half of those interviewed  by Software Advice said they were still deciding if they wanted a cloud or an on-premises system. However, among those who had decided, 96 percent selected cloud-based systems. Only 2 percent wanted an on-premises system.  Presumably, the remaining 2 percent want a hybrid system.

What are enterprises looking for in the cloud? The vast majority want to test and try a single best-of-breed solution (like marketing automation or sales force automation) rather than a large integrated system with all the CRM applications  thrown together.

In fact, for the large suite vendors, the news gets even worse. Not only do the majority of buyers seem to be looking for agile, cloud-based applications, only 9 percent of prospective are interested in even testing multiple applications, let alone integrated suites.

Software Advice  Integration Requirements.jpg

Desired Applications

If cloud vendors and the rise of cloud computing has resulted in more affordable and agile choices for buyers, it also offers those buyers the possibility to pick and choose the applications in which they want to invest.

However, while there is a wide choice of applications in the CRM portfolio, the majority of buyers seem to be looking for sales force automation applications from CRM vendors. In fact, sales force automation was requested by 76 percent of all companies considering best-of-breed solutions and 75 percent of those looking at integrated suites.

After sales force automation, the next most popular application was field service software among best-of-breed buyers (8 percent), but those looking for integrated suites showed little interest in this. For both kinds of buyers, marketing automation was a popular choice.

Software Advice Top-Requested Applications.jpg
Enterprise top-requested CRM applications

 

Contact Management

Asked about the features they wanted most in their CRM deployments, prospective buyers rated contact management as most important. Second was note taking and reporting, followed by analytics.

Of all those contacted, 90 percent rated these the most important features. This was followed by the abilities to integrate with other enterprise legacy systems like content management, email and existing CRM systems.

At the moment, 68 percent of buyers are using non-industry specific software or manual methods like spreadsheets to manage their customer relationships. Until the rise of cloud computing, it was not financially possible to invest in specific types of software.

Efficiency is the principal driver for all organizations, whether they were enterprises buying for the first time or replacing existing systems. Among first time CRM system users, 26 percent opted for a commercial system rather than a proprietary system.

Software Advice Software Features.jpg
Enterprise CRM features requested

Buyer Types

When it came to buying integrated systems, large enterprises outnumbered small enterprises. The latter tend to focus on best-of-breed systems.

This was reflected in revenues and number of employees of the enterprises questioned. Integrated suite buyers averaged at least $5 million in revenues and had 21 or more employees. Those who were interested in the best-of-breed suites tended to have smaller revenues, with 50 percent earning less than $1 million annually and 60 percent employing fewer than 20 employees.

From all this, it's clear CRM vendors should be focusing on adding or improving existing capabilities that will make enterprises more efficient, especially across sales force automation and contact management.

Above all, they should be providing ways to improve customer service through integration with social networks and company data that will improve customer interactions.

 
 
 
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