The CRM software market stands to get another boost as customers for the second year in a row report plans to spend...
in many technology areas.
The Technology Services Industry Association’s fifth annual member technology survey shows members plan to invest in a number of CRM technologies, including online customer community support, social media tools and enterprise CRM. The TSIA research assesses spending across the 24 areas of services and technologies used by its members. The key spending drivers include service consolidation, increasing use of best practices across service lines and the need to replace outdated tools.
Record spending planned: Where is the money going?
After the economic doldrums of 2008 and 2009, planned spending last year was high, and that trend continues this year, with every category covered by the survey seeing planned spending by double-digit percentages of members.
Spending on last year’s top spending area, mobility, has slowed a bit this year, as companies evaluate devices and strategies for supporting employees using them. The TSIA research team suspects some of the planned spending around knowledge management and communities is related to mobility, and support organizations having to overhaul self-service sites to be smart phone-friendly, or they will need to introduce separate support microsites for mobile devices.
Segments with the highest planned spending for support services
- Online communities. Spending on online communities remains high for another year, with a whopping 57% of support services members planning an investment in communities in 2011-12. With the high adoption numbers for communities, this spending indicates companies are beefing up existing community efforts, hopefully allocating funds for expanding customer communities to employees and partners, and also for stronger integrations between communities and CRM and knowledge management (KM).
- Enterprise CRM. The 360-degree view of the customer, which has been CRM’s core promise, has remained elusive for many companies whose legacy CRM systems did not allow integrations to newer systems, leaving many customer interactions -- particularly social media activity -- out of the picture. With 52% of support services members having budget for CRM tools this year, the penetration of Software as a Service (SaaS) CRM will continue to grow.
- Incident management. Though incident management is a common module of CRM suites, many support operations have adopted a new incident management tool allowing for more flexibility than what was available from a legacy CRM platform. But with high planned spending on both CRM and incident management -- 52% and 50%, respectively -- will these two areas merge again, with CRM vendors gaining back ground for incident management?
- Knowledge and content management. KM is a hot investment area this year, with 50% of support services members planning an investment. Companies are working to rationalize social media content with knowledge base content, expanding KM projects beyond customer support to other areas of the organization, and they are investing in more sophisticated tools, as well as products that adhere to industry standards like knowledge-centered support (KCS).
Top spending trends for 2011
- Aging KM infrastructure being replaced. Knowledge strategies are growing more sophisticated, with growing adoption of KCS, rapidly expanding knowledge repositories, and intelligent search making knowledge access easier for all users -- even those who are less technically inclined. Satisfaction with knowledge management tools remains very low -- averaging 3.2 on a five-point satisfaction scale for the second year in a row. This is the year many companies will finally replace their first-generation knowledge bases with more flexible platforms that support increasingly complex business rules and process management.
- Community projects grow more inclusive. The TSIA research team provoked the ire of leading community platform vendors in years past by criticizing their “customer-only” community strategies, such as by their refusals to to sell products for internal or employee communities. With case studies now showing the value of employee communities for field services and professional services, spending on communities is at an all-time high. The research shows a whopping 48% of members have budgeted for additional community investments in 2011-12. In addition, market share of community platform vendors has dropped dramatically, in favor of community tools from multichannel vendors, open source providers and homegrown projects.
- SaaS solutions make technology available for smaller firms. One of the benefits of the cloud revolution is that more slimmed-down, user-friendly versions of CRM tools, incident management and telephony are now available via SaaS. This allows smaller firms to take advantage of tools that previously were only available as more costly on-premises applications.
Greatest adoption rates
- Online communities. Last year, 48% of TSIA members offered a customer discussion forum. A lot has changed with online communities in 12 months, and one of those changes has been more focus on employee communities. Another is the blending of employee and customer communities. In the 2011 survey, 82% of support services members offered an online community for customers, and with professional services and field services also investing in communities to streamline knowledge sharing, adoption by all TSIA members grew to an average of 77%.
- Social media/social service. Tools to interact with customers via popular social media channels such as Twitter and Facebook may be all the rage in pure consumer industries, and or technology support, adoption has grown, but is leveling off. Adoption of social service tools by support services members grew from 30% in 2010 to 40% in 2011, mainly due to mainstream vendors like Salesforce.com introducing support for social media channels. Social service tools are used by 33% of TSIA members overall. However, planned spending on social service is slowing, and The TSIA research team expects attention to focus more on tools that can dramatically improve the employee and customer experience. If business-to-business companies plan to add a new channel of support for customers, it will likely be Web chat rather than Twitter.
- Enterprise CRM. While there has been no significant improvement in CRM functionality for a decade, what has changed is the deployment model. Today, Salesforce, the popular on-demand CRM provider, is in use by 46% of TSIA members, showing a huge shift away from the on-premises products in use a few years ago. With competition keeping per-seat pricing low, CRM is being highly adopted by even the smaller end of the midmarket, helping nudge adoption by TSIA members from 72% in 2010 to 77% in 2011.