The cloud and CRM have a long history together, starting with the rise of application service providers in the late 1990s. In many ways, the low-hanging fruit for cloud adoption has already been picked, according to Gartner. 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.
Correia says these five drivers spur a "critical need" for more traditional, operational CRM. "This further validates businesses' focus on enhancing customer experience and consistent investment in CRM software, especially in CSS, marketing and sales software," she says.
Line-of-Business Buyers Have Different CRM Requirements
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.
The largest spending industries include banking, insurance, securities, telecommunications, pharmaceutical, consumer goods, manufacturing and IT services, "as they have the widest use of different types of CRM applications and technologies," says Ed Thompson, vice president and distinguished analyst at Gartner. "All these industries are also increasing investment in emerging economies, further driving spend."
Customer support and service (CSS) involves IT leaders, vice presidents and directors of customer service in customer support/relationship initiatives. They look at targeted uses of big data analytics, peer-to-peer communities and the evolving customer engagement center — seen as the next generation of the customer service contact center — for critical processes and technologies. A central focus of the CSS organization is engineering consistent, differentiated, cross-channel customer experiences, all while supporting the need for increased use of customer self-service.
Ecommerce is top of mind for CEOs, chief marketing officers (CMOs) and senior executives as they seek the capability 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 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 pushes marketing organizations to make significant marketing technology investments across a broad set of applications and functionality.