CRM will be the heart of digital spending in the coming years, says Gartner in a new report.
"This is one technology area that will definitely get funding as digital business is crucial to remaining competitive," said Joanne Correia, research vice president at Gartner.
CRM software revenue is forecast to reach $23.9 billion in 2014, with cloud revenue accounting for 49% of this.
SaaS- or cloud-based CRM deployments currently represent more than 40% of all CRM deployments, and look set to reach 50% during 2015.
Hot areas for CRM investment include mobility, social media and technologies, Web analytics and e-commerce.
Sectors like telecommunications, high-tech, banking, insurance, securities, pharmaceutical, consumer goods, IT manufacturing and IT services vertical industries will continue to be the largest spenders on CRM.
"They have the widest use of different types of CRM applications and technologies," said Ed Thompson, vice president and distinguished analyst at Gartner. “All these industries are also increasing investment in emerging economies, further driving spend."
Five drivers of CRM
According to Gartner, there are five big technology trends that drive digital spending. Here are how these trends will impact CRM:
- Social media. Sales, marketing and customer service departments need to monitor and engage customers on several hundred public social networks. For example, customer service has to respond to tweets and Facebook discussions, and sales use social media as a source of leads and intelligence on prospects.
- Mobility. Connections to the Internet via smartphones will exceed PC users by the end of 2014 and smartphones have already overtaken PCs as the most common tool for accessing social networks in most countries. BYOD policies are springing up around the globe as IT departments are forced to support a proliferation of devices.
- Big Data. In the last five years, the marketing department has been most impacted by the explosion in customer data available to them. Predictive analytic models for churn analysis, product and service recommendations to the customer, and sales prompts for salespeople are some examples of how customer data can be used to eke out a competitive advantage.
- Cloud. This driver is a decade old now in CRM, having started back in the late 1990s with the rise of application service providers. In many ways, the low-hanging fruit for cloud adoption has already been picked. 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.
- Internet of Things. As cars, buildings, bodies and chairs get connected to the internet and as the price of sensors get cheaper, industries like automotive, construction, healthcare and hospitality will be transformed. At the forefront of this shift will be sales, marketing and customer service departments in promoting, selling and supporting the new services.