The State of the CRM Industry and the Impact on Small-to-Midsize Businesses

By Art Hall, Manager, Alvarez & Marsal; President, CRM Association, Atlanta Chapter

Recent studies predict the global CRM market will double within six years and CRM adoption across every segment will continue to rise mostly fueled by the explosiveness of on-demand CRM delivery models.

"CRM Market Fertility" - the percent of companies deploying or plans to deploy CRM, stands at 38% compared to 18% to 25% historically. On-demand CRM offerings with a set of rich functionality set is making it possible for small to midsize businesses (SMB's) to afford and implement a CRM solution.

CRM needs for SMB's have become increasingly sophisticated over the years. 87% of SMB's are driving towards CRM deployments that are on-demand versus premise based. While there are some CRM solution providers that cater to this segment, they have been typically underserved and their needs often ignored by some of the larger enterprise CRM providers. Most enterprise solution providers offer SMB's a skinny down version of their enterprise solution which doesn't meet the needs of a SMB. As a result, we see some SMB's developing an in-house customized CRM solution to meet their unique business needs, objectives and budget or reverting back to spreadsheets and applications to help them manage their customer & partner relationships.

So what are SMB's looking for in a CRM solution? Increasingly, SMB's are looking for a solution to help with front to back office integration of customer data, business process mapping, and ease of use for non-technical or non CRM administrators. With the rise of the mobile CRM market, SMB's have increasing expectation to integrate with accounting/ERP systems with PDA or Blackberry integration. Some challenges that most SMB's face in their CRM initiatives are the lack of IT staff to assist in the development and implementation of CRM solution, and failing to plan for an implementation. SMB's desire a simple interface for user community. In a recent survey of SMB customers conducted by AMI-Partners, nearly 83 percent said that getting staff to use the software was their biggest CRM challenge and the critical driver behind this was the complexity of the user interface.

Like enterprise CRM deployments, SMB's should focus a lot of their efforts planning their CRM or SFA implementations. Gaining executive support, creating a CRM vision and road map, conducting a needs assessment, benefits rationalization, defining or standardizing their processes, training and change management programs are still core essentials for any CRM initiative regardless of segment. Most of CRM failures are attributed to buying technology without the up front effort & planning required to make the initiative successful and hoping the technology selection is a panacea for their business.

Bottom line - the SMB market is riped with opportunities and with the emergence of on-demand CRM delivery, this undeveloped segment will become more competitive in the near future.