The Indian CRM Market

by Sandeep Mittal, Amit Sharma, and Praveen Wicliff Icicle Consultancy, Mumbai, INDIA This report is an !ecutive Survey of about "# C$M Consultants, %sers, and &endors involved 'ith C$M practices and technolo(y in India) The report is restricted to the Indian mar*et, and the purpose is to (ive an overvie' of the mar*et before investi(atin( different aspects in further depth in subse+uent research pro(rams) Contents ,) C$M Mar*et Si-e . The Mar*et can be si-ed at $s) /#0,## Crores 1, Crore2,# million3 . 4utsourced C$M Services forms the lar(est se(ment 5) Mar*et Prospects . 6uyers are either lo'0a'areness or unconvinced . The mar*et shall sho' slo'er than e!pected (ro'th 7) Mar*et Drivers and Inhibitors . Need for improved customer service shall drive service0oriented industry sectors to adopt C$M . 8i(h cost and poor customer0orientation hold bac* acceptance 9) 6uyer Sectors and &endor $ecall . 6an*in(, Insurance, and :inancial Services sectors are best0fit sectors for C$M . Siebel, 4racle and Talisma emer(e top0of0mind vendors /) $espondent Profile

1. CRM Market Size

Quick Glance: . The Indian C$M mar*et can be si-ed at $s) /#0,## Crores 1, Crore2,# million3 . The C$M mar*et can be se(mented into the mar*et for soft'are and services . The services se(ment includes outsourced C$M services, inte(ration, trainin(, and consultancy . The mar*et for C$M services is considerably lar(er than the mar*et for C$M soft'are Fig. 1. Si-in( the Indian C$M Mar*et

Obser ations and In!erences A clear ma;ority of our respondents si-e the Indian C$M Mar*et at the $s) /#0,## Crore ran(e but 'ith 77< of our respondents puttin( the mar*et at a si-e (reater than $s) ,## Crore= there could be a hi(her benchmar* for the mar*et si-e applicable than the $s) ,## Crore mar*) 4ur findin(s are in a(reement 'ith the fi(ure most published in the media stated by Denis Collart, the (lobal head of PWC>s C$M practice 'ho, in an intervie' in November 5###, stated that the Indian Mar*et for C$M Soft'are and Services 'ould (ro' to about $s) ,## Crore by 5##,) Fig. ". C$M Mar*et Se(ments

The mar*et se(ments for C$M can be broadly out as the Soft'are, Services, and 8ard'are mar*et) 4ur study has been restricted to the Soft'are and Services mar*ets) Fig. #. 6rea*up of the ?lobal C$M Mar*et

This chart (ives the brea*up of the ?lobal C$M Soft'are and Services mar*et) The pro;ected revenues for each of the se(ments for the year 5##, from past research have been used to arrive at the relative percenta(es) This brea*up is merely indicative, as the revenue pro;ections have been ta*en from more than one source) Obser ations and In!erences The brea*up bet'een revenues from various se(ments in the India n conte!t is not e!pected to vary from (lobal mar*et to a si(nificant de(ree) With this assumption, the si-e of the mar*et for C$M implementations 1includin( Soft'are, Inte(ration, Consultin( and Trainin(3 in India lies in the 9#0@# Crore ran(e) ?iven the small mar*et, a local vendor loo*in( for business is (oin( to find himself up a(ainst tou(h competition) Ma;ority of the C$M solution providers in India do not have a product but act as consultants and inte(rators for soft'are li*e Siebel, 4racle, SAP etc) providin( consultin(, soft'are deployment and inte(ration, and trainin() 4utsourced C$M Services has the ma!imum potential for (ro'th, but the number of players enterin( this mar*et is (ro'in( at a si(nificant rate) Telemar*etin( :irms, Direct Mar*etin( :irms, Data Collection firms, Mar*et $esearch firms, and even Advertisin( A(encies have be(un to add the C$M ta( to their services) With the Call Center mar*et findin( the international mar*et tou(h (oin(, they are increasin(ly turnin( to the domestic mar*et to supplement revenues)

". Market $ros%ects

Quick Glance: . Indian firms are a'are of C$M, but are yet to ta*e concrete steps to'ards implementation . The mar*et is e!pected to catch on, but slo'er than anticipated . The overall sentiment is A'ait0and0'atch> The ne!t t'o charts indicates 'hat our respondents feel is the sta(e of evolution of the Indian C$M mar*et and 'hat they feel are the mar*et prospects) Fig. &. Sta(e of evolution of the Indian Mar*et

Fig. '. C$M Mar*et Prospects

Obser ations and In!erences While there has been a (reat deal of attention on C$M technolo(y and practices in recent times, 'hen it comes to puttin( it in practice, the mar*et is in a very early sta(e of evolution) Most respondents felt that the Indian firms 'ere either una'are, or unconvinced about the benefits and applicability of C$M) The overall sentiment 'hen it comes to (ro'th prospects is upbeat in the sense that people are convinced that it shall ta*e off, albeit slo'er than anticipated) Si(nals for Solution and Service providers are that they are (oin( to have to stic* throu(h this early sta(e till the mar*et matures in terms of a'areness and acceptance, and the number of implementations increase)

Media reports have put the annual (ro'th rate for the C$M Soft'are mar*et in India at 5/07#<, and Services mar*et at about /#0@#<) 4ur respondents ho'ever feel the (oin( shall be slo'er than pro;ected)

#. Market (ri ers and Inhibitors

Quick Glance: . The need for improved customer service and hi(h (lobal adoption shall drive the Indian C$M mar*et . The hi(h cost of implementation and lo' a'areness of benefits is (oin( to prove a ma;or deterrent The ne!t t'o charts indicate the factors our respondents feel 'ill drive acceptance of C$M in India, and the factors that 'ill hold bac* acceptance) Fig. ). Mar*et Drivers

Fig. *. Mar*et Inhibitors

Obser ations and In!erences A need for improved Customer Service shall be the main driver for Industry sectors that depend on the +uality of their customer interactions to retain e!istin( customers and 'in ne' ones) 8i(h ?lobal adoption is li*ely to drive the MNCs to adopt C$M first in line 'ith ?lobal implementations)

While the first hurdle holdin( bac* the mar*et is a lac* of a'areness, respondents have put hi(h cost of implementation as the main inhibitor) Complete and comprehensive C$M pac*a(es such as those of Siebel and 4racle costin( in the ran(e of $s) , to 5)/ Crores 1and more3 are too e!pensive for most Indian firms) 8o'ever, 'ith soft'are vendors brin(in( do'n prices and offerin( relatively affordable pac*a(es bundled 'ith inte(ration and consultin( services, this could soon chan(e) In the Indian conte!t, lac* of customer orientation and poor e!istin( IT infrastructure can prove ma;or factors) :irms need to evolve their customer thin*in( by a si(nificant e!tent before they accept C$M as the strate(ic imperative it is, and internal systems and database mana(ement practices need to be up(raded before C$M soft'are can be used to any effect) Another ma;or inhibitor indicated by respondents 'as that Indian firms lac* the s*ills and strate(ic vision re+uired to successfully implement C$M)

&. +u,er Sectors and -endor Recall

Quick Glance: . 6an*in(, Insurance, and :inancial Services are the sectors that shall benefit most from C$M practices and technolo(y . Siebel emer(es as the most top0of0mind C$M pac*a(e, follo'ed by 4racle and Talisma Fig. .. 6est0fit sectors for C$M practices and pac*a(es

Fig. /. Top0of0mind C$M Pac*a(es

Obser ations and In!erences 4ur respondents voted over'helmin(ly in favor of the :inancial Services sector as the best fit sector for C$M) $ecent implementations in the ban*in( and financial services sector, especially those of ICICI and Citiban*, have clearly (rabbed attention) The best0fit sectors as e!pressed by our respondents (ives an indication as to ho' closely C$M is associated 'ith improvement in customer service) Siebel is the (lobal leader 'hen it comes to C$M soft'are and has clearly (rabbed mindshare in the Indian mar*et as 'ell) While ""< of the respondents mentioned Siebel as a *no'n C$M vendor, Siebel 'as the first C$M pac*a(e that came to mind for @9< of the respondents) SAP and 4racle have recently entered the Indian mar*et 'ith a((ressive plans tar(etin( the SM mar*et in particular) 6oth firms are tar(etin( a (ro'th in the mar*et for their products of about 7#<)

'. Res%ondent $ro!ile

Fig. 10. $espondent Profile

Fig. 11. $espondent Involvement 'ith C$M

Total res%ondents: *1

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