Indian CRM SW market to grow at a CAGR of 40%: IDC

Inspite of the economic slowdown, the CRM market in India witnessed a healthy growth. IDC expects the CRM software market to grow at a CAGR of 40 percent to reach Rs 188.4 crore in 2006. 

The CRM services market is expected to grow even faster at a CAGR of 53 percent to reach Rs 377 crore by the year 2006.

The CRM market in India is in the initial phase when there would be high demand for consulting services in order to bring a fit between the business and CRM application and also around deployment and implementation of the same. Organizations have started using 'Service Quality' as a key differentiator and are using it as their USP to increase revenues and to gain market share and that's precisely the reason why CRM has been hot in service verticals like financial and telecom services.

According to Kapil Dev Singh, Country Manager, IDC India, "Unlike ERM, which is top-driven and therefore faces a lot of inertia, CRM initiatives in most organizations are driven by the actual users (Customer Support Department, Sales Function, etc). Further, the implementation cycles for CRM are shorter and automation of CRM related processes have a direct impact on a company's profitability. Therefore more and more Indian enterprise are expected to invest in CRM solutions to provide improved services to the customers and drive CRM market."

This is supported by the fact that four out of five companies are spending on modular CRM (ie point solutions). According to IDC's end-user survey conducted among 200 organizations, nearly 81 percent stated that they are using modular CRM, while 19 percent stated that they are using complete CRM package. The CRM applications that are primarily used are marketing automation closely followed by customer care and support automation.

According to the survey, the key business drivers for investing in CRM solutions are customer retention and loyalty and improving cost efficiencies. Another important reason that emerged for CRM adoption was to make sales force management more effective. This shows that Indian businesses are beginning to feel the heat from increasing competition and are actively trying to retain their loyal customer base.

Cyber News Service