Customer Relationship Management (CRM) - Outlook ( ) for Cloud. explore@researchfox.com

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1 Customer Relationship Management (CRM) - Outlook ( ) for Cloud explore@researchfox.com

2 ResearchFox Consulting is an Indian market research and consulting firm based in Bangalore. We strive to provide our clients with research data and reports which they can trust and analyze. Insights gleaned from our detailed and comprehensive research reports helps our clients stay ahead of trends. ResearchFox serves clients with services from data collection to analysis and reports. ResearchFox has extensive sector expertise and its consultants are abreast of global trends and issues across industries. Our areas of expertise include Manufacturing, IT, FMCG, Healthcare, Automotive, Government Sector and NGO, BFSI and Retail. Disclaimer : This report is furnished to the recipient for information purposes only. Each recipient should conduct their own investigation and analysis of any such information contained in this report. No recipient is entitled to rely on the work of ResearchFox Consulting Pvt.Ltd. contained in this report for any purpose. ResearchFox Consulting Pvt. Ltd. makes no representations or warranties regarding the accuracy or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions therefrom. The recipient must not reproduce, disclose or distribute the information contained herein without the express prior written consent of ResearchFox Consulting Pvt.Ltd. Copyright ResearchFox Consulting Private Limited 2

3 Table of Contents 1. Introduction 1.1. Report Description 1.2. Objective 1.3. Scope of the Research 1.4. Regions Covered 1.5. Key Takeaways 1.6. Key Stakeholders 1.7. Key Terminologies 1.8. List of Abbreviations 2. Executive Summary 2.1. Executive Overview 3. Research and Forecasting 3.1. Research Methodology 3.2. Forecasting Methodology 4. Industry Landscape 4.1. Market Size and Growth 4.2. Competitive Landscape 4.3. Market Share 4.4. Company Classification 4.5. Region Outlook 4.6. Market Metrics 4.7. Porter's Five Forces Model 4.8. Key Drivers Analysis 4.9. Key Constraints Analysis Key Opportunities Identified Key Challenges Identified 5. Market Segmentation 5.1. Deployment Cloud Market Size and Forecasting Key Drivers Analysis Key Constraints Analysis Key Opportunities Identified Key Challenges Identified Sub Segments Region : North America Region : Europe Region : APAC Region : South America Region : RoW 3

4 Introduction 01 4

5 1. Introduction 1.1. Report Description Customer relationship management has played a vital role in building a strong relationship between business organisations and customers. The increase in customer attrition and the need for an effective customer engagement has made adoption of CRM software essential in business organisations in order to gain customer loyalty. Customer satisfaction play an important role in businesses to avoid churning of customers. Hence, the need for adoption of CRM software is essential for a systematic approach by businesses towards maintenance of customer interaction and to understand the requirements of customers and serve them efficiently. The report titled "CRM software" showcases an in-depth analysis of the overall CRM software market in terms of market size, end-users, deployment model and verticals served. This report also forecasts the growth numbers till 2019(on a YoY basis) and hence suggests the compound annual growth for the estimated period. The report brings about a detailed description about developed and emerging CRM markets globally Objective 1.To understand the trend in adoption of CRM Software and to focus on those factors that are influencing and affecting the growth of CRM software. 2. To estimate the size of present global CRM market and its forecast Scope of the Research The scope of the research was limited to understanding the market share across segments. Key drivers, constraints and challenges along with their impact on various business functions in both short term and long term were addressed, segmentation and forecasting were done based on: 1. End-User 2. Verticals 3. Deployment type (on premise vs cloud) 4. Region based segmentation 1.4. Regions Covered 1. North America(US and Canada and Mexico ) 2. Europe(United Kingdom, France, Germany, Italy, Spain) 3. APAC(Australia,India, Singapore and others) 4. South America(Brazil, Argentina and others) 5. Row (Middle East and Africa, Israel. ) 1.5. Key Takeaways The research conducted has been significant in understanding key trends of CRM software in different 5

6 regions and to identify the drivers and constraints impacting the growth of the CRM software. 1. North America and Europe hold a major share and have been significant adopters of CRM software. As higher importance is given for customer engagement and customer satisfaction in these nations, the CRM software will retain its demand in North America and Europe. 2. The CRM software vendor companies have paid more attention towards customer data privacy and security. This is being done in order to abide to strict government norms and regulations that are in place to prevent data breaches and cyber-attacks. 3. Asia Pacific and South America are emerging markets in adoption of CRM software. Preference is given to local CRM vendor due to extreme localisation needs that will further impact penetration into these markets. 4. Financial services and retail industries have been significant adopters of CRM software, as quick accessibility of data and providing of real time services play a crucial role in these industries. Thus, CRM software has become an essential tool in these industries to retain customers by providing customer centric service. 5. On premise CRM software hold the major share as enterprise level businesses prefer to have complete control over data. Using on premise CRM software, companies will know the data centre location hence, quick measures can be taken during downtime to avoid impact on business process. 6. Cloud based CRM software is growing as effective solution, enabling small and medium companies to overcome budget constraints. 7. Social media platform has been an effective tool for customer engagement and campaign management. Hence, adoption of social CRM will support businesses to promote their products effectively and also stay responsive towards customer queries and complaints. Thus, social CRM is expected to grow in the days to come Key Stakeholders The key stakeholders for CRM software are those budding start-ups looking for innovation in CRM software. These companies can be benefited from this report, as they would be able to understand market scenario and requirements of the customers. 1. Small and midsize business planning to adopt CRM software in their operations to gain efficiency and offer customer centric service. 2. Financial services, healthcare, retail industries will benefit from this report as the necessity for adoption of CRM software is high in these industries to provide customer oriented services. 3. Software product developers and cloud based solution providers can utilize this report to understand trend, customer requirements and accordingly develop products as per the requirements. 6

7 1.7. Key Terminologies 1. Vendor Lock in : Vendor lock in is a condition in which a customer using a product or service cannot easily change to competitors products or service. Vendor lock in is usually the result of proprietary technologies that are ill-matched with those of competitors. 2. Social CRM :Social CRM is customer relationship management that strengthen business with customers by maintaining conversation and connection through social media platform. 3. Mobile CRM : Mobile customer relationship management (mobile CRM) is a type of customer relationship management application designed to implement, manage and access customer data through mobile platforms. Such as smartphones and tablets to interact with customers. 7

8 1.8. List of Abbreviations 1. CRM : Customer Relationship Management. 2. ROI : Return on Investment. 3. TTM :Time Taken To Market. 4. BYOD : Bring Your Own Device. 5. SaaS : Software as a Service. 6. PaaS : Platform as a Service 7. KYC : Know Your Customers. 8. AML : Anti Money Laundering. 9. FATCA : Foreign Account Tax Compliance Act. 10. HIPPA : Health Insurance Portability and Accountability Act 8

9 dfgfd dfgfdh dfgfh dfhgf Executive Summary 02 9

10 2. Executive Summary 2.1. Executive Overview The increase in customer attrition has driven business organisations to adopt a systematic approach towards customer data management in order to track customer behavior. CRM software support business organisations to develop effective sales and marketing strategies to gain profitability. Adoption of CRM software has become essential in business organisations to obtain a complete view of customer data through quick and easy flow of information in business organisations. CRM software supports businesses in segmentation of customers to utilize cross sell and upsell opportunities by approaching customers with products that suits their requirements. Customers expect businesses to be quick in responding to their queries and complaints. This has increased the necessity for businesses to adopt CRM solution that offers effective contact centre management and, to respond to customer's complaints and queries in real time without latency. Customers' higher usage of digital channels has made customer engagement and satisfaction, play a crucial role to gain customer loyalty. Hence, business are trying to stay connected to customers through social media platform by adoption of social CRM software. Financial services and retail industry have been major adopter of CRM software. In financial services, the necessity to provide real time service to customer is high. Hence, adoption of CRM software will help in quick accessibility of customer's profile is possible in real time. These requirements of financial services to track customer transactional behavior, to offer better products that meet customer requirements to gain cross sell and upsell opportunities has made CRM software essential. The requisite for obtaining a sheer view of customer profile has become important in financial services to track customer's transactional behavior, avoid illicit funding from wrong sources and to prevent identity theft. Hence, financial services is termed to be a major adopter of CRM software. In retail sector, higher dependence of customers on digital channels to meet retail their requirements has increased. Digital channels provide a wide variety of option under a single platform for customers to select by comparing brands, features and prices. This has resulted in reduced customer loyalty of most of the customers these days. The need to understand customer preference and make smart inventory choices is important in retail industry. Hence, adoption of CRM software is important in retail businesses to provide targeted options to customers. This in-turn, will provide a greater opportunity for retail businesses to effectively upsell and cross sell. In healthcare industry, easy flow of patient's data is crucial to make effective medical decisions at the right time. The need to track patient's health progression and keep patients informed regarding their health check-ups, through automated updates have made adoption of CRM software important. Patient's necessity have increased to make informed health decisions under medical emergencies through 10

11 doctor's guidance. This has made Adoption of social and mobile CRM important in medical center to provide patients centric services. Hence the necessity to keep patients in contact with doctors through online channels like mobile apps and social media has increased in healthcare industries. Asia Pacific are emerging regions in CRM adoption Businesses in North America form the biggest adopters of CRM software. Companies here give greater importance to customer engagement and, satisfying the customers is of prime importance. To do this, businesses have to understand the needs of their customers and possessing of tools like CRM software would certainly help them in this direction. Cloud based CRM software is gaining significance as the onus of software upgrades, data centre maintenance is on the vendor. As cost reduction and return on investment (ROI) play a crucial role in small and midsize businesses. These cloud based CRM solutions has been an effective method for small and midsize businesses to overcome budget constraints. Pay as you go subscription model of cloud based CRM solution has been an effective method for cost reduction. Hence, North America government has paid attention for cost reduction in government services through adoption of cloud based CRM software, from cloud CRM vendor companies that is certified under government certification known as "FEDRAMP". On premise CRM software, has greater adoption in businesses where high importance is given for meeting customization needs, and to have complete control over customers data so as to ensure better security and protection of data. In Europe, the government norms and regulations are strict over customer data privacy and security. These reasons have made businesses to adopt an organised approach towards customer data management to avoid identity theft and data breaches. Hence Europe businesses has given higher importance towards adoption of CRM software. Language barriers, cultural differences in Europe will have an impact on foreign CRM vendor companies. Preference of local vendors is high in Eastern Europe. However, Western Europe is flexible towards adoption of CRM software if customization needs of business are met by foreign vendors. Adoption of cloud based CRM software is expected to grow, due to low upfront investment, easy implementation and low maintenance. With customer data privacy play a major role in Europe businesses preference of private cloud over public cloud is high. In Asia pacific, businesses have given high importance to understand and meet customer requirements in order to gain customer loyalty and achieve profitability. Hence, adoption of CRM software is expected to grow significantly in Asia pacific. In Asia Pacific, variability in IT infrastructure, cultural differences and language barriers will impact CRM software vendor companies trying to penetrate into the CRM market. Hence, CRM vendor companies have to possess a keen knowledge on local business needs and methodology in order to achieve software localisation and customisation. Enterprise level businesses have been major adopters of CRM software in Asia pacific region. With the need 11

12 for effective customer engagement and satisfaction is high in enterprise businesses, adoption of CRM software has become essential in enterprise businesses to serve customers efficiently. Budget constraints and misfit in integration after adoption of on premise CRM software will adversely affect return on investments (ROI) for small and midsize businesses. Therefore adoption of on premise CRM software by midsize and small businesses is not as effective compared to enterprise businesses. Hence cost efficient cloud based CRM software is gaining significance in small and midsize businesses of Asia Pacific region. South America has been emerging as a favourable IT and call centre destination, due to preference of the US companies for nearshore services and similar time zones. Hence, the necessity to satisfy offshore and nearshore customers through effective customer engagement has made adoption of CRM software to grow significantly in businesses of South America. South America businesses have unique and complex CRM requirements because of language and cultural differences. Basic fields like names could lead to misfit in customisation as after adoption of CRM software, as the approach towards naming a person differs between nations of South America. This differences make foreign CRM vendor companies difficult to achieve software localization and customization in South America. Local CRM vendors in South America, have an upper hand compared to foreign vendors as they are able to understand local business needs and deliver customised CRM software for businesses to meet their complex CRM requirements. 12

13 dfgfd dfgfdh dfgfh dfhgf Research and Forecasting 03 13

14 3.1. Research Methodology Base Year: 2014 Forecasting Period: Sampling The leading suppliers of each end-user product categories that were chosen to provide a larger representative sample. Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth aspects of the market Secondary Research The research methodology that was carried out was desk research through various journals, association reports, and in house database to build a knowledge base on various market service segments, product categories and industry trends. Various fact based data was analyzed. Some of the sources included: a. ResearchFox Knowledge Base: Previous data on the market has been put through a rigorous and comprehensive analysis to analyze the current state. b. Desk Research: Industry reports, annual reports, press releases, webinars, journals and publication, independent rating agencies and government statistics Primary Research Primary interviews were conducted among various stakeholders: Product and service companies Members of associations and alliances Subject Matter Experts and Evangelists Consultants and Strategists 14

15 Industry Information It was essential to understand the current industry landscape, market dynamics, security ecosystem and competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales Managers and product stakeholders were interviewed Technical Information In addition to the interviews with leading participants for industry-related information, ResearchFox conducted interviews with Research and Development (R&D) and Design and Development teams to understand the current usage of the products by service type and also to find out the emerging trends. Finally, interviews with suppliers were conducted to cross check the validity of information and also to understand the emerging trends in the end-user segment. The detailed methodology for primary research is outlined below Primary Interview Questionnaire Design ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their discussions. This process ensured the collection of all necessary data. The questionnaire was designed to elicit unbiased industry level data (market size, production, sales, and others), that had check points (questions such as company level information and their position in the industry acted as check points) to ensure accuracy of the data. The questionnaire included the following sections: 1. Industry level information 2. Characteristics and Dynamics 3. Company-specific information 4. Market segmentation data Interview Questionnaire Test and Validation Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the appropriate market and technology data was generated. After the final design of the questionnaire, ResearchFox began full scale primary research. Specific companies targeted for primary research interviews were selected based upon market participation. Higher was the entity's profile, more attractive was the entity. 15

16 Interview Process As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key data, operations, and competitive information. Multiple contacts within a single organization and with an individual are often planned and/or staged in order to optimize and complete the information gathering process Research Validation At a point, when 20 percent of the research interviews and/or data collection had been completed, ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with project objectives. The analyst team analyzed the information from the interviews and information was validated through a combination of the following validation techniques: Cross checking with other primary data and previously developed in-house research Review of secondary information, such as trade journals, annual reports and industry directories 16

17 3.2. Forecasting Methodology Step-by-Step Methodology for Market Estimation and Forecasting Market Estimation and Forecast Methodology, 2015 Step 1 Method Understand the market mechanism for the market through structured, systematic and theoretically established norms of analyzing, designing, introducing and quality assurance of the market estimation 2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time 3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team 4 Market estimation and forecast calculation 5 Delphi method and Causal Analysis used as and when required 6 Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final publication Source: ResearchFox Significance and Importance of the Market Forecast, 2015 Sr. No. Significance and Importance 1 Helps revisit on the company's R&D investments 2 Keeps the Sales and Marketing team posted on the market prospects 3 Strategize investment and expansion plans 4 Improve business planning 5 Helps create business aims and set sales figures within the company 6 Aware of the current market competition 7 Support plans for Merger and Acquisition (M&A) Source: ResearchFox 17

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