Published monthly, November 2003

 

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.. Midmarket Perspective
Customer Relationship Management for Midsize Businesses
By James A. Browning

Onyx, Pivotal and SalesLogix are the midsize business customer relationship management (CRM) market leaders, however, with Microsoft and more traditionally large enterprise-focused application vendors now in the midmarket, the choices midsize businesses (MSBs) have for CRM applications has grown significantly during 2003.

The following Magic Quadrant examines CRM application suites for North American MSBs with between 100 and 1,000 employees or annual revenue in the range of $50 million to approximately $500 million, or midsize divisions of large enterprises. Interviews with the vendors, inquiries from Gartner clients and customer reference checks form the basis for this Magic Quadrant analysis:

The minimum criteria for inclusion in the Magic Quadrant are support for the three primary applications that make up a CRM suite (sales, customer service and marketing automation). Although these three functions are found in all of the rated suites, the balance of functionality varies significantly from suite to suite. Most offer stronger and deeper sales or customer service than marketing functionality. In some cases, these variations reflect the vendors’ application development heritage, but may also be reflective of MSBs' emphasis and demand as well. A growing trend for MSB CRM is the availability of pre-built industry- or subindustry-specific functionality. Many vendors rely on their own professional services or those of their systems integration partners to provide industry specific functionality by customizing their general-purpose CRM applications.

Also driven by MSB preferences, the majority of CRM application suites available and rated in this Magic Quadrant are in the form of packaged licensed software. Through 2006, purchased packaged software will remain the most popular approach for MSBs to acquire business applications. And, because of a growing trend for MSBs to consider CRM applications from hosted or online CRM service providers, such as SalesForce.com, NetLedger and interlinkONE, these vendors are included in this analysis as well. By year-end 2004, online CRM application service revenue will account for more than 25 percent of the MSB CRM application market.

Most MSBs that are acquiring CRM applications in support of their CRM strategies are looking for pre-integrated suites of CRM applications. Nevertheless, about 50 percent of MSBs start by implementing one application, such as for sales or customer service, or to support a part of the organization. The other 50 percent pursue phased, but enterprise-wide, CRM implementations.

Of importance to note, Gartner predicts that the midsize business CRM market will soon shrink because of consolidation. As a result, MSBs are advised to begin their search for CRM applications only after creating an enterprise-wide CRM vision and strategy. Additionally, vendor commitment to market requirements and viability should be a key decision criteria. For more information on selecting a CRM vendor, refer to "The Complete SMB Guide to CRM Vendor Evaluation" and "An SMB's Guide to Evaluating CRM Technology" on gartner.com.

Questions on CRM for your midsize organization? E-mail midmarket@gartner.com now or learn more at Midsize Enterprise Summit. Click here to qualify to attend now.

James A. Browning is Vice President and Research Director in Gartner Research, where he is part of the Small and Midsize Business Research organization at Gartner, Inc.

Reference
Research Note
CRM Suites for North American MSBs: 1H03 Magic Quadrant
Published: April 4, 2003
Author: Wendy S. Close, Research Director, Gartner, Inc.



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..Did You Know?
That focusing solely on getting a good initial price when purchasing a software license can be expensive in the long run? More of the total cost of ownership (TCO) of a software license is based on the flexibility of the contract for future use.

CRM Budget Levels for
Midsize Businesses
How does your IT spending for customer relationship management (CRM) compare with that of your colleagues? Gartner Dataquest statistically surveyed North American midsize business executives who represented a cross-section of industries and sizes. Slightly more than half of the survey respondent organizations’ CRM annual budgets were in the range of $50,000 to $250,000; while less than 10 percent had budgets of more than $500,000.

Learn more. Network with a group of your peers at Midsize Enterprise Summit. Click here for details.

Source
Customer Relationship Management for Midsize Business Initiatives, Gartner Dataquest, November 22, 2002

 

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