Enterprises to Show CRM the Money

CRM will be a top spending focus for enterprises this year and next, according to a Gartner report. What’s more, CRM will be THE top spending focus — edging past the behemoth category of enterprise resource planning — based on a newly released survey of IT investment priorities for 2013 and 2014. Following CRM are ERP and office and personal productivity tools.

ERP is such a corporate mainstay — a veritable IT backbone — that to see any application push past it in terms of spending priorities is an interesting trend. It’s even more striking considering that the hot application is CRM — a software category that has experienced slow growth in recent years.

Digital Marketing, Social Media, Integration

The expected surge can be attributed in part to the economic cycle. Companies are emerging from their bunkers to focus less on financial risk mitigation and more on growth.

The boost in CRM spending also may be due to the evolution of the software category itself, Neolane VP of Marketing Kristin Hambelton told CRM Buyer.

“ERP has been around for a long time, and there have been many different iterations,” she pointed out. “CRM, though, hasn’t seen that many dramatic changes.”

That may have been true until recently. New technologies have come to market in recent years — especially in digital marketing, which many companies see as key to their growth.

“Marketing budgets are clearly growing this , and CRM will be part of that,” Hambelton said.

Social media is another software category that is driving interest in CRM investments.

“Both customer and prospect interactions are now all about social, and that has massive implications for customer interaction,” Michael Idinopulos, chief customer officer of Socialtext, told CRM Buyer.

“Managing customer relationships used to be about tracking transactions. Now it’s all about creating interactions — both the ones you’re having with your customers and the ones they’re having with each other. Doing that effectively and to scale requires infrastructure,” he explained.

“the old tools — email blasts, static websites, white papers — just don’t cut it anymore,” said Idinopulos.

Easier and more advanced integration technologies also are driving CRM, allowing companies to incorporate once-separate operations into the CRM backbone. Contact centers are an example of this.

“The contact center has long been siloed, but in this new era of CRM, everything must be integrated,” Marty Beard, CEO of LiveOps, told CRM Buyer.

In short, companies are turning their energies toward forward-looking activities. They are done re-engineering the back office and are now looking to the front office to find and engage customers,” Ray Grainger, founder and CEO of Mavenlink, told CRM Buyer.

“CRM is now expanding to encompass a whole host of lead-generation and client engagement activities,” he continued. “For example, new ways to find customers through social channels and digital marketing require a host of new skill-sets, processes and applications.”

Enter the Cloud

CRM is also a popular application to be delivered via the cloud — a trend the Gartner survey also captured. The survey found that organizations expressed “overwhelming interest” in cloud computing and other options that externalize IT.

There is a big need for a flexible, affordable and enterprise-strength CRM system, said Matt Gorniak, cofounder of G2Crowd.com. “Enter the modern cloud-based CRM system.”

Some of the CRM vendors are taking this trend one step further by offering platforms to build processes that are related to CRM but do not have to be, he told CRM Buyer.

“This is great for the customer because they can extend the data in their system,” said Gorniak, “and great for the vendor because it makes the platform stickier.”