BANGALORE, INDIA: According to IDC's India Packaged Software Market Analysis and Forecast 2009-2013 report, the Customer Relationship Management (CRM) solutions market, in India, was estimated to be $81.5 million, $115.7 million and $140.8 million respectively during 2006, 2007 and 2008.

The current slowdown has pushed a large number of enterprises to look at more cost-effective IT models such as Software as a Service (SaaS).

According to a Springboard Research January 2009 report, the Indian SaaS market was pegged at Rs. 251 crore in 2009, and is expected to reach Rs. 488 crore by 2010.

New avenues of CRM

Earlier, the focus of CRM deployments was to cater to core functionalities like opportunities, selling processes, sales operations and help desk services. Because of the financial crisis and tight budgets, SaaS has now become more prevalent. Besides, use of smart phones will increase to drive CRM adoption. "Sage had a very good experience with customers right through last year.

There has been an upsurge in 'CRM interest' among customers given the fact that 'generating and nurturing leads' was becoming even more important in a slow market. The higher involvement of customers in implementations, the success rate of 'going live' also was quite high for ACT! by Sage, SageCRM and Sage SalesLogix. In any case our partner community continues to build up domain skills in different verticals to be able to provide value-added consulting at an affordable price in the marketplace. Surely this will have a very positive impact in the 'take up' of CRM across segments," said Thomas Abraham, MD-India, Sage.

The application segment of cloud computing has proven successful as a business model. By running business applications such as CRM over the Internet from centralized servers rather than from on-site servers, customers are able to cut some serious costs.

"SaaS is steadily growing popular. On-premise solutions are the still the way to go for large and complex CRM implementations, because on-demand solutions have limited configurability. But vendors are continuing to add features and encourage third-party developers to add applications to their platform," said A Balakrishnan, president-Business Solutions, Religare Technologies.

On-demand software services come in different varieties that vary in their pricing scheme and the way the software is delivered to the end users. Previously, the end-user would purchase a license from the software provider, and then install and run the software directly from on-premise servers. Using an on-demand service however, the end-user pays the software provider a subscription fee for the service. The software is hosted directly from the software providers' servers and is accessed by the end user over the internet. Considering the cost and effort needed to install traditional CRM, vendors have started driving aggressive marketing for CRM on demand.

"The role of Web 2.0 for CRM is to provide customer with a view of the world, powering the development of new offers that can be served up in anticipation of customer needs, and in ways that promise to delight the customer, promote loyalty, and improve margins," mentioned Diane Fanelli, senior VP-Industries and Solutions, SAP Asia.

Talking about the developments that would take place in the year ahead, Sushant Dwivedy, director-Business Solutions, Microsoft said, "xRM is the concept of using the dynamic CRM platform to build business applications to manage other things besides customers. xRM is a tool that accelerates development. It gives a power of choice to customers through public cloud and private cloud options. It provides flexibility to fit people, business, environment and budget."

Challenges galore

India is a highly fragmented market place and different ways of offering the business application have their respective business opportunities. Also, the CRM penetration in India has not yet reached at a very high level and hence the potential is significant across segments. Some challenges that the vendors face include trust in the SP and their service levels, service portfolio, customization ability of service offerings, perception of loss of control in the minds of customer or CIOs and privacy concerns in the minds of users. In limited cases, there are barriers imposed by broadband penetration, especially for SMEs.

Opportunities for Sps

Small players in the market are gaining expertise in specific areas within CRM such as contact management, lead management, investment management and wealth management. Customization at small scale opens market for the customers at small and medium enterprises who do not intend to shell out large sum of money on CRM applications but are willing to automate their business processes.

"Customers are still looking for solutions that help solve problems peculiar to their industry or domain. For example, Religare Technologies' Broker CRM solution provides several value adds like Value of Account, Integration with Back Office broking software, Know Your Customer (KYC) modules and domain specific reports. Our strategy is to use our domain expertise in the BFSI and healthcare domains to build vertical CRM solutions," said Balakrishnan of Religare.

The road ahead

"Ability to provide customer self-service is the new trend for CRM vendors. This is because the customer now owns the business ecosystem-not just the company. The new look of CRM would include the incorporation of communication enabled business processes, social tools, tailoring customer experience by successfully integrating the social data with the demographic information," said Fanelli from SAP.

In the year ahead, CRM would be designed and executed in a way that would lead to enhancements to core functionality, integrations of hand held devices and smart phones and assisted selling of customized solution for specific verticals.