Gartner’s Hot CRM Applications for 2011 Show SaaS is Accelerating in the Enterprise

Gartner’s report, What’s ‘Hot’ in CRM Applications in 2011 shows clients are moving to the next stage of their strategies for using SaaS in the areas of customer service, marketing and sales.  They’re asking for more analyst time, discussing how to quickly deploy applications company-wide versus just in departments, and most important, how to measure the results. Cross-CRM applications including Business Process Management Systems (BPMS) and Master Data Management (MDM) are two of the more popular areas of inquiry Gartner is getting right now from infrastructure initiatives standpoint to unify CRM data and strategies as well.

Factors Driving Faster Adoption

Escaping high maintenance fees on their legacy CRM applications, facing chronic time shortages that make the traditional lengthy application deployment cycles unaffordable and impractical, and a mindset of measuring results from software spending are fueling greater SaaS adoption.

A local financial services firm is migrating to SaaS-based feedback management and analytics to capture customer satisfaction more effectively than their legacy CRM application could.  Chief Marketing Officers (CMOs) are also driving more technology adoption in the areas of social media for marketing, lead management, mobile marketing and Web analytics as they’re more accountable for delivering measurable results.  The new mindset in many companies about measuring results and continually improving strategies is a powerful catalyst of SaaS application adoption.  A summary table from the report is provided below (please click on it to expand for easier reading) along with key take-aways.

Key Take-Aways from the Report:

• Software-as-a-service (SaaS) delivery represented approximately 26% of all CRM application spending in 2010. Spending on CRM applications grew by more than 8% in 2010.

• In sales applications, almost 50% was delivered via SaaS, where it is now widely viewed as a mainstream model.

• Operational CRM is the automation of processes such as campaign management or case management. It represents more than 70% of all CRM spending and grew at around 4% in 2010.

• Analytical CRM, which includes predictive analytics and segmentation applications, grew 9% and according to Gartner represents nearly 25% of CRM spending.

• Social CRM grew at over 50%, but still represents less than 5% of all CRM spending. According to the report, 90% of social CRM spending is by business-to-consumer (B2C) companies and approximately 85% of spending is initiated by companies based in North America.  Gartner expects the social CRM market to reach $1B in revenue by year-end 2012, up from $600M in 2010.

• In terms of inquiry traffic, Social CRM is the hottest area of interest in customer service and marketing departments, followed by related areas like digital marketing and e-commerce. Gartner points out that Social CRM is used both within and outside an organization and is of equal importance to its clients today based on their inquiries.

Bottom line: This report shows more companies are confronting the need to change their customer service, marketing and selling strategies to be customer driven on an enterprise, not just department basis.  They are relying on SaaS based applications as  the catalyst of changing customer-driven strategies in companies.  CMOs and other senior managers are focused on measuring customer satisfaction, loyalty and profitability instead of just cost reductions as a result.

Source: What’s ‘Hot’ in CRM Applications in 2011 Ed Thompson, Michael Maoz, Kimberly Collins, Michael Dunne Publication Date: 17 March 2011 ID Number: G00211657