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Posts from the ‘CRM’ Category

What’s New In Gartner’s Hype Cycle For CRM, 2019

  • Worldwide enterprise application software revenue totaled more than $193.6B in 2018, a 12.5% increase from 2017. CRM made up nearly 25% of the entire enterprise software revenue market.
  • 72.9% of CRM spending was on software as a service (SaaS) in 2018, which is expected to grow to 75% of total CRM software spending in 2019.
  • Worldwide spending on customer experience and relationship management (CRM) software grew 15.6%, from $41.7B in 2017 to $48.2B in 2018, and is projected to reach $55.2B in 2019.
  • Salesforce dominated the worldwide CRM market with a 19.5% market share in 2018, over double its nearest rival, SAP, at 8.3% share, according to Gartner’s market share estimates.
  • CRM revenue in 2018 is comprised of software and services revenue from Customer Service and Support (35.7%), Sales (25.9%), Marketing (25.4%), and Digital Commerce (13%). These four categories together comprise the customer experience and relationship management market, according to Gartner.

New technologies are proliferating across the CRM landscape, driven by the need every business has to understand, communicate, serve, and strengthen customer relationships. Gartner’s decision to create its first-ever Hype Cycle for CRM Sales Technology, 2019, reflects the widening spectrum of new technologies being introduced to improve sales effectiveness while improving operational efficiency. Gartner’s Hype Cycle for CRM Sales Technology, 2019 is based on an update to their Hype Cycle for CRM Sales, 2018.  Gartner’s definition of Hype Cycles includes five phases of a technology’s lifecycle and is explained here.  The Gartner Hype Cycle for CRM, 2019, is shown below:

Details Of What’s New In Gartner’s Hype Cycle For CRM, 2019

  • Four new technologies are on the Hype Cycle for CRM, reflecting enterprises’ need for greater integration of diverse systems and the demand for more predictive and prescriptive analytics-based insights. The four technologies include the following:
    • Blockchain for lead generation. Gartner sees the potential for blockchain to provide a decentralized peer-to-peer network model that supports exchanging data to the highest bidders using smart contracts. Gartner predicts this approach reduces or in some cases eliminates the need for a centralized authority such as a data intelligence solution. It also allows for a new ecosystem of managing, sharing and monetizing data for revenue-generating purposes.
    • Knowledge graphs for sales. The ability to build an AI-enabled knowledge model of real-world entities and their relationships to one another, expressed in a data schema, shows potential to increase sales effectiveness. Gartner predicts this emerging technology provides organizations with the ability to create data-driven sales organizations using graphs arranged in a network of nodes rather than in tables of rows and columns. The significance is the ability to correlate sales activities and benchmark against performance metrics in a more digestible and insightful way, which is often too complex for human analysis.
    • Digital adoption solutions. Gartner sees potential in this technology to improve the adoption of multiple tools across a selling and marketing organization. Digital adoption solutions enable sellers to onboard more quickly and improve productivity.
    • Relationship intelligence. By relying on machine learning, sales organizations can map out their universe of network connections, both internal and external, to identify potential avenues of engagement with any prospect or client. Gartner sees this as useful in its ability to provide warm introductions or even referrals for revenue-generating activities while reducing sales cycles.
  • Gartner predicts the following five technologies will deliver the most significant transformational benefits to selling organizations in 2 years or less. The five most transformation technologies in the near term are the following according to Gartner:
    • CPQ Application Suites
    • Digital Content Management for Sales
    • Lead Management
    • Partner Relationship Management (PRM)
    • Price Optimization and Management for B2B
  • The following CRM technologies have gained wide usage and adoption in the last year, as reflected by their position on this year’s Hype Cycle. Data intelligence solutions for sales, CPQ application suites, digital content management for sales, and sales KPI analytics are among the most adopted mature technologies on the hype cycle today.
  • Visual configurators have moved at a much faster pace to mainstream adoption along the Hype Cycle this year. Gartner credits visual configurators’ rapid adoption rate to how the majority of them are now embedded or easily integrated with configure, price, quote (CPQ) applications, or in digital commerce sites. State-of-the-art visual configurator are enabling engineering, production, and sales to become real-time collaborators in creating new products. For additional insights into visual configurators, please see How To Make Complex CPQ Selling Simple With Visual Configurators published earlier this week.
  • Algorithmic guided selling is now listed as obsolete. Gartner has re-assigned this technology as it’s now an embedded core capability in many CPQ and sales force automation (SFA) applications. By doing this, Gartner is saying it is doubtful algorithmic guided selling applications will be sold stand-alone in the future.
  • Social for sales and predictive B2B marketing analytics are off the CRM Hype Cycle. Gartner has chosen to merge them into the data intelligence solutions for sales market. Social for sales is more of a process, not a technology market. The majority of social for sales-based strategies are executed over social networks that have the audience and scale to make them succeed, with LinkedIn being an example. Gartner believes the predictive B2B marketing analytics vendor landscape has shrunk and is not a viable market long term, as they have seen inquiries regarding market share in this area steadily drop in this area since 2016.
  • Gartner is seeing two main drivers of investment and innovation in CRM in 2019 and beyond. The first is digital optimization or a process and program of using digital technology to maximize existing operating processes and business models. The second is predictive/prescriptive-enabled technology or technology using capabilities such as machine learning that provides predictive signals and prescriptive “next best action” recommendations. Please see their research note, 4 Key Insights from the Gartner Hype Cycle for CRM Sales Technology, 2019, for additional details.

Sources:

4 Key Insights From the Gartner Hype Cycle for CRM Sales Technology, 2019, published October 2, 2019

Hype Cycle for CRM Sales Technology 2019, July 10, 2019 (Client access required)

How To Make Complex CPQ Selling Simple With Visual Configurators

Bottom Line: Realizing visual configurators’ full potential starts by enabling engineering, production, and sales to become real-time collaborators in creating new products.

2D, 3D, Augmented Reality (AR), Mixed Reality (MR), and Virtual Reality (VR) visual configurators are proliferating across the Configure, Price, and Quote (CPQ) landscape today. Manufacturing marketing teams say they are the most effective lead generation technology they have, responsible for 40%+ growth in Marketing Qualified Leads (MQLs) this year alone. Sales VPs and Chief Revenue Officers (CROs) are seeing from 9% to 30% improvements in deal close rates and over 90% increases in quote accuracy. Visual configurators deliver shock-and-awe to prospects and drive more leads and deals.

Product Models Need To Scale, Driving Greater Collaboration

The good test of any product configurator is whether it can scale from assemble-to-order (ATO) to Engineer-To-Order (ETO) while enabling real-time collaboration between engineering, production, and sales. A given products’ many attributes and options defined by engineering in their PLM system need to be consistent with manufacturing’s work instructions and Bill of Materials (BOM) in their ERP system. And the visual configurator sales & marketing is using needs to reflect, in real-time, what engineering defined in PLM and what manufacturing’s ERP system can build. Product models serve as the master data that enables real-time collaboration between engineering, manufacturing, and sales.

Visual configurators need to push beyond the veneer of delivering shock-and-awe and enable real-time collaboration between PLM, ERP, and CRM & CPQ systems to achieve their full potential. Visual configuration providers need to pursue the goal of enabling engineering, manufacturing, and sales to be collaborators in creating accurate products and challenge themselves to deliver the following:

  • Improve sales performance while increasing margin per deal by providing only the options that are the most buildable at the lowest cost.
  • Eliminate disconnects between what engineering designed and what manufacturing can produce leads to more sales at higher gross margins.
  • Close product configuration gaps and improving fulfillment speed and product quality, creating greater customer loyalty and follow-on sales.
  • Automatically propagate product and design changes across all functional areas to accelerate new products to market while improving product quality.
  • Real-time fine-tuning of new product features to the model level that specific customers want becomes possible when engineering, manufacturing, and sales are collaborating in real-time.
  • Update work instructions and BOMs in real-time based on changes customers make in product visualizations.
  • Improve the balance of revenue across configurable products to sell higher-margin models based on real-time collaboration between PLM, ERP, CRM, and CPQ systems.
  • See in real-time how changes in product design, Bill of Materials (BOM), and delivery dates impact the financial performance of a manufacturer.

Predicting Visual Configuration’s Future

Shortening cycle times from product concept to completed product is the secret to succeeding with visual configuration. And when each manufacturing cycle time has its cadence or speed depending on how little or much a customer wants a product customized, visual configurators need to flex and deliver what customers want when.

Companies defining the future of visual configuration today include CDSDERWID, and SAP Visual Enterprise. These three companies are defining the future of visual configuration by enabling real-time integration between PLM, ERP, CRM, and CPQ systems.  I recently spoke with John Major, CEO of CDS to get his insights into what’s driving visual configuration’s success today.  “What we’re seeing in the marketplace now are two things. One is the clients want to understand how our visual configuration solution is going to fit into their change management as it’s rooted in PLM, because to any manufacturer, PLM reigns supreme,” he said. He continued, “The second is about staffing. When you’re a manufacturing company, and you buy a visual configurator toolkit that requires you to create your app, a few things happen. You need to staff up a software team to now run that toolkit and write development. So your long-term cost is fairly significant versus a company that can deliver an entire solution at scale.” 

CDS is partnering with eLogic, who is regarded as the leading system integration partner in CPQ and product configuration and is considered a global leader in delivering business solutions for manufacturers across SAP configuration technologies and Microsoft Dynamics 365, Power Platform & Azure. Together they are delivering next-generation visual configuration solutions for their shared clients. Examples of the work they are doing are shown below:

  • Real-time model updates keep engineering, manufacturing, and sales in sync. When customers are designing a new product in a CPQ session, the model is updated in real-time and saved, so engineering, manufacturing, and sales can see how their changes affect the product. An example of this is shown below:

  • When the product is configured “to scale,” 2D proposal drawings are automatically generated, and the product model is updated in real-time, making augmented reality visualizations possible. 3D models are also made available in a variety of CAD formats. Additionally, an Augmented Reality model is created that can be placed in any virtual environment. What’s noteworthy is that while the model’s appearance is changing, all relevant changes to the work instructions and BOM are happening in real-time using the SAP Visual Enterprise

  • When product models are the catalyst enabling real-time collaboration between engineering, manufacturing, and sales, selling into the aftermarket becomes profitable. Aftermarket selling has a complexity all its own. Taking on the challenge of shortening cycle times from product concept to completed products in the market is what’s needed today. The example below shows a piece of equipment selected in CPQ, then rotated, zoomed in, and exploded to see the internal components. Internal parts can now be selected, quoted, ordered and delivered for replacement.

Conclusion

Visual configurators are capable of so much more than they are delivering today. It’s time to graduate beyond the shock-and-awe stage, which has been very successful in driving leads, generating MQLs, and closing deals. It’s time to get down to the hard work of making all those impressive models buildable at scale and profitable. And that comes by doubling down efforts at shortening cycle times from product concept to completed product. That’s the true north of this market and the secret to succeeding. Getting engineering, manufacturing, and sales collaborating using product models as a single source of truth is the best place to start.

What Needs To Be On Your CPQ Channel Roadmap In 2019

Bottom Line:  Adding new features to your CPQ channel selling platform directly benefits your resellers and channel partners, driving greater revenue, channel loyalty, and expansion into new markets.

Personalization Is Key To CPQ Succeeding In Channels

Sustaining and strengthening relationships across all indirect selling channels succeeds when dealers, multi-tier distributors, resellers, intermediaries, and service providers each can personalize the CPQ applications and platforms they use. Larger dealers, distributors, and resellers are adept at personalizing CPQ selling portals by the various roles in their organization. Personalization combined with a highly intuitive, configurable interface improves CPQ applications’ ease of use, enabling channel partners to get more done. The more intuitive and easy a CPQ application is to use, the more channel partners rely on it to place orders. When distributors are representing, on average, 12 different manufacturers,  the one with the most intuitive, easily used CPQ system often gets the majority of sales.

Another aspect of personalization is defining levels of resellers. When many organizations first launch their CPQ channel selling strategies, one of the first requests they have is to organize all channel partners into performance categories. Differentiating channel partners on sales performance, customer satisfaction, and aftermarket revenue then gamifying how every one of them can move up a level is proving to be very effective at increasing channel sales. Competing with one another to be the top reseller for the manufacturing and service companies lifts an entire channel network to higher performance.

Every dealer, multi-tier distributor, reseller, intermediary, and service provider also has a unique way of selling that works best for their business. Another must-have feature on any CPQ channel roadmap is greater workflow flexibility to support increasingly complex, IoT- and AI-enabled configurable products. Smart, connected products are the future of manufacturing and channel sales. Capgemini estimates that the size of the connected products market will be $519B to $685B by 2020. Workflows like the one shown below of an internal sales rep using a multichannel CPQ system to order a customized product are due for a refresh to support even greater flexibility for more channels and greater product options.


Most Valuable Features For A CPQ Channel Roadmap In 2019

There’s a direct link between how effective a CPQ platform is across multi-tier distribution networks and the productivity of sales teams using them. 83% of sales teams are using CPQ apps today based on Accenture Interactive’s recent study, Empowering Your Sales Force: It’s Not Just Automation, It’s Personal (8 pp., PDF, no opt-in). There’s ample evidence that the more effective a CPQ platform is at equipping dealers, multi-tier distributors, resellers, intermediaries, and service providers, the greater the sales they achieve. The 2019 B2B Buyers Survey Report, by DemandGen in collaboration with DemandBase, found that B2B buyers are more likely to purchase from sales representatives who demonstrate a stronger knowledge of the solution area and the business landscape (65%) compared to competitors. B2B buyers also give high praise for sales teams who can provide quotes quickly and respond to their inquiries promptly (63%), in addition to providing higher-quality content (61%). Each of these benefits is derived from a CPQ platform that can scale across every phase of the selling lifecycle.

The following are the key features needed on CPQ channel roadmaps in 2019 to stay competitive and scale sales and revenue on pace with market growth:

  • Greater personalization for each type of partner portal supported by real-time integration to CRM and ERP systems, designed to scale for sales team turnover across multi-tier distribution networks. Channel partners’ sales teams tend to churn quickly, and it’s best to design in intuitive, easily configured portals by sales role to help new hires get up to speed fast. Channel sales associates are typically the fastest-churning area of any selling business. With greater personalization comes the need for greater integration to provide the data needed to enable partner portals to have a greater depth of functionality. The following graphic from Deloitte’s recent study, Configure, Price, and Quote (CPQ) Capabilities illustrates this point:

  • Support for multi-tier pricing, price management, price optimization, price enforcement, and special workflows, including Special Pricing Requests (SPR). Baseline CPQ platforms support price management and have successfully transitioned multi-tier distribution networks off of Microsoft Excel spreadsheets to a single pricing model that scales across all products and channels. Consider adopting advanced pricing logic to support SPRs so sales operations teams don’t have to do this process manually. In manufacturers who have transitioned from manual to automated SPR approvals, average deal sizes have increased over 60%, and productivity jumped over 76% according to a recent Gartner survey.
  • Augment advanced product configuration tools by making them more intuitive and easier to use to sell the more advanced products in your catalog. It’s time to push the boundaries of CPQ channel selling systems to sell more complex products and drive greater revenue and margins. Forward-thinking manufacturers are taking a virtual design and 3D-based design approach to accomplish this. Enabling channel partners to take larger orders for more complex products is paying off.
  • Upgrade guided selling strategies to be more than catalog-based selection systems, mining customer data using machine learning to see which products they have the greatest propensity to buy when. It’s time to migrate off of the guided selling systems that are selecting products from catalogs that may deliver the best gross margins or have a traditionally high attach rate with the product the customer is buying. Machine learning is making it possible to provide greater accuracy and precision to recommendations than ever before.
  • Improve the usability of sales promotions, rebates, and most importantly, Market Development Funds (MDF). It’s amazing how much time manufacturers are spending manually handling MDF claims today. It’s time to automate this area of the CPQ channel roadmap and save thousands of hours and dollars a year while enabling resellers to get reimbursed faster or get the funds they need to grow their businesses.
  • Contract management is a must-have for CPQ channel roadmaps today. Integrating a cloud-based contract management system into a CPQ platform is vital for taking one more step towards an end-to-end quote-to-cash workflow being in place. Real-time integration to contract management can save days of waiting for contract approvals, all leading to more closed deals and faster, more lucrative sales cycles.
  • Manufacturers can realize greater revenue potential through their channels by combining machine learning insights to find those aftermarket customers most ready to buy while accelerating sales closing cycles with CPQ. Manufacturers want to make sure they are getting their fair share of the aftermarket. Using a machine learning-based application, they can help their resellers increase average deal sizes by knowing which products and services to offer when. They’ll also know when to present upsell and cross-sell offers into an account at a specific point in time when they will be most likely to lead to additional sales, all based on machine learning-based insights. Combining machine learning-based insights to guide resellers to the most valuable and highest probability customer accounts ready to buy with an intuitive CPQ system increases sales efficiency leading to higher revenues.

Conclusion

Now that the solutions exist for resellers to simplify CPQ selling strategies, it’s up to each manufacturer to decide how competitive they want their channel partner roadmap to be. Any given manufacturer’s quoting and configuration tools today are competing with 11 others on average for a reseller’s time, it is clear that roadmaps need a refresh to stay competitive. Suggested options include offering greater personalization, multi-tier pricing and a more thorough approach to price management, advanced product configuration support, revamped guided selling strategies and improved usability of sales promotions, rebates, and Market Development Funds (MDF). Manufacturers need to prioritize each of these features relative to their product- and revenue-specific goals by channel. A fascinating company who has deep expertise in designing, implementing, and scaling analytics, service, sales, IoT, and CPQ solutions for manufacturers is eLogic. The company’s mission is to enable manufacturers to achieve the highest value customer engagement and product & service lifecycle performance. eLogic is regarded as the leading system integration partner in CPQ and product configuration and is considered a global leader in delivering business solutions for manufacturers across SAP configuration technologies and Microsoft Dynamics 365, Power Platform & Azure.

Salesforce Now Has Over 19% Of The CRM Market

 

  • Salesforce dominated the worldwide CRM market with a 19.5% market share in 2018, over double its nearest rival, SAP, at 8.3% share.
  • Worldwide spending on customer experience and relationship management (CRM) software grew 15.6% to reach $48.2B in 2018.
  • 72.9% of CRM spending was on software as a service (SaaS) in 2018, which is expected to grow to 75% of total CRM software spending in 2019.
  • Worldwide enterprise application software revenue totaled more than $193.6B in 2018, a 12.5% increase from 2017 revenue of $172.1B. CRM made up nearly 25% of the entire enterprise software revenue market.

CRM remains the largest and fastest growing enterprise software category today according to the latest market sizing, and market share research Gartner published this weekGartner defines CRM as providing the functionality to companies across the four segments of customer service and support, digital commerce, marketing, and sales. All four subsegments of the CRM market grew by more than 13.7%, with marketing emerging as the fastest growing segment, increasing by 18.8% and representing more than 25% of the entire CRM market. Customer service and support retain its No. 1 position, contributing 35.7% of CRM market revenue, attaining $17.1B in revenues in 2018.

Key insights include the following:

  • With 19.5% market share, Salesforce has over 2X the CRM sales SAP has and over 3X of Oracle. Salesforce continues to dominate CRM globally, increasing its market share from 18.3% in 2017 to 19.5% in 2018. Adobe is the only other vendor to grow its market share in 2018. Microsoft and SAP successfully held onto to market share while Oracle lost share.

  • Adobe and Salesforce grew faster than the overall market, increasing CRM revenues 21.7% and 23.2% respectively. Adobe’s CRM sales jumped from $2B in 2017 to $2.4B in 2018. Salesforce CRM revenues increased from $7.6B in 2017 to $9.4B in 2018, growing the fastest of all competitors in this market. SAP grew 15.5% between 2017 and 2018, just below the overall market growth of 15.6%. Microsoft (15%) and Oracle (7.1%) grew slower than the market. The following graphic compares growth rates between 2017 and 2018.

  • Adobe dominates the marketing subsegment of CRM with 19% market share in 2018. Salesforce has 11.7% of the marketing subsegment, followed by IBM (5.7%), SAP (4%), Oracle (3.6%) and HubSpot (3.4%). Gartner estimates the marketing subsegment was a $12.2B market in 2018, increasing from $10.3B in 2017, achieving 18.8% growth in just a year.
  • Eastern and Western Europe were the fastest growing regions at 19.7% and 17.5% respectively. North America and Western Europe were the largest two regions with North America growing at 15.2% to reach $28.1B in revenue.

Sources:

Gartner Says Worldwide Customer Experience and Relationship Management Software Market Grew 15.6% in 2018

Market Share: Customer Experience and Relationship Management, Worldwide, 2018 (client access required)

Which CRM Applications Matter Most In 2018

 

According to recent research by Gartner,

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.

These and many other fascinating insights are from Gartner’s What’s Hot in CRM Applications in 2018 by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj, Sandy Shen and Olive Huang, published on August 14, 2018. Gartner clients can access the study here  (10 pp., PDF, client access reqd.).

Gartner continually tracks and analyzes the areas their clients have the most interest in and relies on that data to complete their yearly analysis of CRM’s hottest areas. Inquiry topics initiated by clients are an excellent leading indicator of relative interest and potential demand for specific technology solutions. Gartner organizes CRM technologies into the four category areas of Marketing, Sales, Customer Service, and Digital Commerce.

The following graphic from the report illustrates the top CRM applications priorities in Marketing, Sales, Customer Service, and Digital Commerce.

Key insights from the study include the following:

  • Marketing analytics continues to be hot for marketing leaders, who now see it as a key business requirement and a source of competitive differentiation. In my opinion and based on discussions with CMOs, interest in marketing analytics is soaring as they are all looking to quantify their team’s contribution to lead generation, pipeline growth, and revenue. I see analytics- and data-driven clarity as the new normal. I believe that knowing how to quantify marketing contributions and performance requires CMOs and their teams to stay on top of the latest marketing, mobile marketing, and predictive customer analytics apps and technologies constantly. The metrics marketers choose today define who they will be tomorrow and in the future.
  • Artificial intelligence (AI) and predictive technologies are of high interest across all four CRM functional areas, and mobile remains in the top 10 in marketing, sales and customer service. It’s been my experience that AI and machine learning are revolutionizing selling by guiding sales cycles, optimizing pricing and enabling CPQ to define and deliver smart, connected products. I’m also seeing CMOs and their teams gain value from Salesforce Einstein and comparable intelligent agents that exemplify the future of AI-enabled selling. CMOs are saying that Einstein can scale across every phase of customer relationships. Based on my previous consulting in CPQ and pricing, it’s good to see decades-old core technologies underlying Price Optimization and Management are getting a much-needed refresh with state-of-the-art AI and machine learning algorithms, which is one of the factors driving their popularity today. Using Salesforce Einstein and comparable AI-powered apps I see sales teams get real-time guidance on the most profitable products to sell, the optimal price to charge, and which deal terms have the highest probability of closing deals. And across manufacturers on a global scale sales teams are now taking a strategic view of Configure, Price, Quote (CPQ) as encompassing integration to ERP, CRM, PLM, CAD and price optimization systems. I’ve seen global manufacturers take a strategic view of integration and grow far faster than competitors. In my opinion, CPQ is one of the core technologies forward-thinking manufacturers are relying on to launch their next generation of smart, connected products.
  • It’s in customer service where AI is receiving the highest investments in real use cases rather than proofs of concept (POCs) and experimentation. It’s fascinating to visit with CMOs and see the pilots and full production implementations of AI being used to streamline customer service. One CMO remarked how effective AI is at providing greater contextual intelligence and suggested recommendations to customers based on their previous buying and services histories. It’s interesting to watch how CMOs are attempting to integrate AI and its associated technologies including ChatBots to their contribution to Net Promoter Scores (NPS). Every senior management team running a marketing organization today has strong opinions on NPS. They all agree that greater insights gained from predictive analytics and AI will help to clarify the true value of NPS as it relates to Customer Lifetime Value (CLV) and other key metrics of customer profitability.
  • Sales and customer service are the functional areas where machine learning and deep neural network (DNN) technology is advancing rapidly.  It’s my observation that machine learning’s potential to revolutionize sales is still nascent with many high-growth use cases completely unexplored. In speaking with the Vice President of Sales for a medical products manufacturer recently, she said her biggest challenge is hiring sales representatives who will have longer than a 19-month tenure with the company, which is their average today.  Imagine, she said, knowing the ideal attributes and strengths of their top performers and using machine learning and AI to find the best possible new sales hires. She and I discussed the spectrum of companies taking on this challenge, with Eightfold being one of the leaders in applying AI and machine learning to talent management challenges.

Source: Gartner by Ed Thompson, Adam Sarner, Tad Travis, Guneet Bharaj,  Sandy Shen and Olive Huang, published on August 14, 2018.

2015 Gartner CRM Market Share Update

  • Worldwide customer relationship management (CRM) software totaled $26.3B in 2015, up 12.3% from $23.4B in 2014.
  • SaaS revenue grew 27% yr-over-yr, more than double overall CRM market growth in 2015.
  • Asia/Pacific grew the fastest of all regions globally, increasing 9% 2015, closely followed by greater China with 18.4% growth.

These and many other insights into the current state of the global CRM market are from Gartner’s Market Share Analysis: Customer Relationship Management Software, Worldwide, 2015 (PDF, client access) published earlier this month.  The top five CRM vendors accounted for 45% of the total market in 2015. Salesforce dominated in 2015, with a 21.1% annual growth rate and absolute growth of over $902M in CRM revenue, more than the next ten providers combined. Gartner found that Salesforce leads in revenue in the sales and customer service and support (CSS) segments of CRM, and is now third in revenue in the marketing segment. Gartner doesn’t address how analytics are fundamentally redefining CRM today, which is an area nearly every C-level and revenue team leader I’ve spoken with this year is prioritizing for investment. The following graphic and table compare 2015 worldwide CRM market shares.

CRM Market Share 2015

table 1

Adobe, Microsoft, and Salesforce Are Growing Faster Than The Market

Adobe grew the fastest between 2014 and 2015, increasing worldwide sales 26.9%. Salesforce continues to grow well above the worldwide CRM market average, increasing sales 21.1%. Microsoft increased sales 20% in the last year.  The worldwide CRM market grew 12.3% between 2014 and 2015.

Spending by vendor 2015

 Analytics, Machine Learning, and Artifical Intelligence Are The Future Of CRM

Advanced analytics, machine learning and artificial intelligence (AI) will revolutionize CRM in the next three years. Look to the five market leaders in 2015 to invest heavily in these areas with the goal of building patent portfolios and increasing the amount of intellectual property they own. Cloud-based analytics platforms offer the scale, speed of deployment, agility, and ability to rapidly prototype analytics workflows that support the next generation of CRM workflows. My recent post on SelectHub, Selecting The Best Cloud Analytics Platform: Trends To Watch In 2016, provides insights into how companies with investments in CRM systems are making decisions on cloud platforms today. Based on insights gained from discussions with senior management teams, I’ve put together an Intelligent Cloud Maturity Model that underscores why scalability of a cloud-based analytics platform is a must-have for any company.
cloud-maturity-model

Sources:  Gartner Says Customer Relationship Management Software Market Grew 12.3 Percent

What’s Hot In CRM 2013: Strong Interest In Mobile For Streamlining Sales And Service

Whats Hot in CRM 2013 imageGartner published the report What’s Hot in CRM Applications in 2013, by Ed Thompson on June 20, 2013.  The report covers areas of interest by clients in the four areas of marketing, sales, customer service and e-commerce.

The report states that “the 2013 What’s Hot list was compiled after examining Gartner inquiry volumes by topic. It was then supplemented by asking all Gartner CRM analysts to offer their opinions on what has been generating the most interest during all the client inquiries they have taken since the end of 2012 and in the beginning of 2013.”

Big data, cloud, social, mobile and the Internet of Things are the five catalysts that are driving inquiries in the hottest areas of interest.  Gartner’s Ed Thompson, author of the report, states that “this is where our clients’ interests lie, although not their current CRM spending.”  Technologies highlighted in red are the hottest in terms of interest, shown in the following table Highest CRM Application Priorities for 2013.

What This Says About the Future of CRM

Mobility is just one part of delivering an excellent customer experience.

  • It is surprising that Gartner clients aren’t looking to create a more unified strategy to customer experience across all channels at all times. As the report states, “The refreshing of an aging agent desktop with a new, more intelligent and unifying user interface has shot to the top of the heat charts once more.” The findings of this Gartner analysis make the highly promoted claims of usability by many CRM vendors look overly hyped.  I think usability is the fastest path to greater system adoption of any CRM system, and that has to include mobile.  It is surprising that a related technology in this area didn’t rise farther in the rankings.
  • Second, mobile sales on smartphones and tablets dominate, followed immediately by Social – Internal Collaboration and Social – Integration with Social Data. What is fascinating about this group of four top items in Sales is the indication that the behavior of how sales teams work individually and together is changing fast. Collaboration is a strong catalyst for Return on Investment (ROI) from social technologies and the sequence of these priorities in Sales underscores that.
  • Third, the vision of the mobile-enabled support representative able to be autonomous yet fully supported to solve customer problems is rapidly approaching.  Of all patterns emerging from this data, this is one shows the greatest profit potential.  Service Lifecycle Management (SLM) and the many forms of service management all have very significant profitability associated with them for manufacturers.  The quicker this area of mobility moves, the faster SLM and Maintenance, Repair and Overhaul (MRO) strategies will grow – giving manufacturers and service providers the ability to mine their installed bases for more profits.
  • Fourth, predictive analytics and big data are reordering how marketing strategies are designed, implemented and managed.  Given the increasing complexity of marketing automation systems and the strategies they support, predictive analytics and big data are starting to dominate the conversations I’ve personally had with Chief Marketing Officers (CMOs) and many demand generation professionals.  I expect the predictive analytics aspects of marketing, combined with big data, to accelerate quickly over the next year.
  • Fifth, the rapid adoption of mobile-based platforms including the Apple iPad in the Configure, Price, Quote (CPQ) continues throughout the professional services, discrete and process manufacturing companies I often visit.  One manufacturer I often work with on their CPQ strategies has the ability today to present a completed 3D model of the proposed product, embed it in a quote and e-mail it to the prospect all from an iPad.  The future of CPQ is going to be dominated by mobility and enterprise support for key order management, pricing and product configuration options.
 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner Predicts CRM Will Be A $36B Market By 2017

CRM in 2017The latest enterprise software forecast from Gartner shows Customer Relationship Management (CRM) increasing to a $36.5B worldwide market by 2017, a significant increase from the $20.6B forecasted in Q1 of this year.  CRM also leads all enterprise software categories in projected growth, showing a 15.1% CAGR from 2012 to 2017, also revised up from 9.7% in the Q1 forecast.

The latest round of forecasts published in the report,  Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update shows CRM eclipsing ERP in worldwide market size in 2017.  The following graph compares the relative growth of CRM, ERP, Business Intelligence (BI), Supply Chain Management and Web Conferencing, Collaboration/Social Software Suites.  Source: Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update.  Please click on the image to increase its size for easier reading.

Figure 1 Forecast

Key Take-Aways

Figure 2 Forecast

  • Worldwide enterprise software spending is projected to be $304B in 2013 in the latest forecast, up from $279B in the Q1 forecast. Gartner claims stronger demand for CRM, supply chain management and security are leading to accelerating market growth.
  • ERP spending worldwide is projected to grow from $26.03B in 2013 to $34.3B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7%.
  • Business Intelligence (BI) worldwide is projected to grow from $14B in 2013 to $18.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7.3%.
  • Supply Chain Management (SCM) worldwide is projected to grow from $9.16B in 2013 to $13.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 10.4%.
  • Data Integration Tools and Data Quality Tools worldwide are projected to grow from $4B in 2013 to $6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of  10.3%.

 Bottom Line:  Gartner’s latest forecasts show that enterprises are realizing the most valuable assets they have are solid, long-term customer relationships.  Trust really is the new currency, as my friend Michael Krigsman often says.

2013 CRM Market Share Update: 40% Of CRM Systems Sold Are SaaS-Based

CRM-Market-Share-Analysis-Image-2012Last year, four out of every ten CRM systems sold were SaaS-based, and the trend is accelerating.

In the recent Gartner report  Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012 published April 18, 2013 the authors provide insights into why the worldwide CRM market experienced 12% growth in 2012, three times the average of all enterprise software categories.  Gartner cites demand they are seeing from their enterprise clients for CRM systems that can help acquire customers, analyze and act on customer behaviors, and increase all-channel management performance.  Big data inquiries are also increasing in CRM, driven by the interest enterprise clients have in getting more value from social network data and interactions.

Key take-aways from the report include the following:

  • The CRM worldwide market grew from $16B to $18B attaining a 12.5% growth rate from 2011 to 2012.
  • 80% of all CRM software in 2012 was sold in North America and Western Europe.    North America CRM sales grew 16.6% from 2011 to 2012.  The highest growth regions of CRM sales between 2011 to 2012 included Greater China (26.9%) and Latin America (24.3%).
  • Salesforce.com is the world’s leading CRM software vendor with 14% market share in 2012 ($2.5B in sales), surpassing SAP (12.9%, $2.3B in sales), Oracle (11.1%, 2.01B in sales), Microsoft (6.3%, $1.1B in sales), IBM (3.6%, $649M in sales) and all others.  The top ten vendors worldwide generated $10.9B in sales alone in 2012.

Figure-1-Market-Share-CRM

  • Worldwide CRM software spending by subsegment shows Customer Service and Support leading all categories with 36.8% of all spending in 2012 ($6.6B), followed by CRM Sales (26.3%, $4.7B), Marketing (includes marketing automation) (20%, $3.6B) and e-commerce (16.9%, $3B).   The following chart shows the distribution of revenue by category:

CRM-Software-Subsegments

  • 40% of all CRM software sold in 2012 worldwide was SaaS-based.  Gartner states that they are seeing their enterprise clients seek out easier-to-deploy CRM systems compared to on-premise alternatives.  The report states that many enterprises are now replacing their legacy systems with SaaS-based CRM systems as well.  Enterprise clients also report that SaaS-based CRM systems are delivering net-new applications that deliver complementary functionality not possible with legacy and previous-generation CRM platforms.
  • Ten fastest growing CRM vendors as measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).
  • Communications, media and IT services were the biggest spenders on CRM in 2012 due to their call center requirements.  Manufacturing including Consumer Packaged Goods (CPG) was second, and banking & securities were third.

21 Most Admired Companies Making IT A Competitive Advantage

time-and-IT-competitive-advantage1-300x215All enterprises, regardless of what they produce or the services they deliver, are really information businesses.

The accuracy, speed and precision of IT systems means the difference between winning or losing customers, keeping supply chains profitable, and solidly translating new concepts into revenue-producing products and services.  The world’s best-run services businesses have customer-driven IT as part of their DNA; it is very much who these companies are internally.

In the recently published Garter report CEO and Senior Executive Survey 2013: 21 Top Companies Admired for Competitive IT  completed between October and December, 2012, which was part of the 2013 CEO and Senior Business Executive Survey, C-level respondents were asked to name the companies they most admired in terms of their ability to apply IT-related business capabilities for competitive advantage.   Respondents were also asked to limit their responses only to their own and related industries.

391 respondents participated in the survey with 147 being CEOs, 149, CFOs; 49, COOs; and 46 being board members including Chairman of the board and president.  Geographic distribution included 152 respondents from North America; 124 from Europe; 78 from Asia/Pacific; 20 from Brazil; 12 from South Africa; and 5 from the Middle East with minimum company size being $250M in annual sales or above.

The following is the list of the world’s most admired companies using IT for competitive advantage.

Most Admired Companies Making IT A Competitive Advantage

Accenture
Amazon
Apple
Cleveland Clinic
General Electric
Goldman Sachs
Google
Hospital Corporation of America
IBM
Intermountain Healthcare
JP Morgan Chase
Kaiser Permanente
Mayo Clinic
Microsoft
Nestle
Proctor & Gamble
Progressive Insurance
Schlumberger
Target
Toyota
Wells Fargo

Key Take-Aways

  • Customer-driven IT is the single most admired trait of all 21 companies in the list.  Associated with this attribute is the proven ability of these enterprises to manage complex e-commerce systems & platforms, support multichannel management, in addition to continually show the ability to innovate quickly.
  • Enterprises need to consider how the business successes their investments in  IT are enabling can be used for branding and recruitment.   Providing benchmark performance data and stories of how IT helped create entirely new markets and solve customer problems needs to be used for recruiting.  Many of the 21 companies mentioned are doing this, using success stories as a catalyst for driving recruitment efforts for analytics, cloud computing and systems integration experts.
  • Don’t underestimate the disruptive power of cloud computing and mobility to completely re-order enterprise systems quickly.  Gartner mentions that there are enterprises whose IT organizations would have made the list had they not slowed down.  While not directly stated, Gartner warns IT departments to not become complacent over time.  From personal experience working in IT departments however, it is clear that complacency is a leading career hazard.  It’s imperative for CIOs to keep challenging their organizations to stay intensely focused on new developments, seeking out how they can be used to strengthen business strategies.
  • Four of the top five factors that most impressed respondents about the admired companies are customer-related.  Customer-facing IT (15%); followed by an integrated/standardized/unified IT organization and process framework (13%); exceptional use of CRM (11%); customer-centered innovation (9%);  and product design & offerings (9%) are the most mentioned attributes of the highest-performing companies. Multiple responses were allowed to this area of the survey.  The following graphic provides an analysis of which factors most impressed the C-level executives who were respondents to the survey.

What Impressed Business Leaders Most

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