CRM space hotting up for SMBs

Over the next couple of years, India is poised to witness a veritable explosion in the number of companies going in for “sales management systems”: that include some form of “sales force automation (SFA)”:,,sid9_gci350521,00.html and “customer relationship management (CRM)”: tools.

Sales management systems first began to attract companies in the early “eighties”: The failure rates of those projects, however, were then as high as 70-80% and except for some of the larger corporates with deep enough pockets, the “rate of induction”: of this technology by most companies was rather sluggish.

Over the years, the technology improved and “studies tracking performance of CRM projects”: reported that during the period 2001-04 about 25% companies world-wide reported significant improvement in their front office operations due to CRM while another 45% reported minor improvements and the remainder reported no improvements at all. Studies in 2005 and 2006 have reported a further rise in the number of companies reporting significant improvements in their operations due to CRM although the success rate still remains below 35%.

Right from the early days it has been the larger companies which have taken to CRM in a big way. Given the very large volumes of customer related data that they handle on a daily basis, the benefits of data digitalisation, automation and much enhanced analytical ability far outweighed cost considerations and helped companies to handle customers better in a fiercely competitive market. Even now success stories abound about how Fortune 500 companies or large Indian corporates have successfully implemented SFA/CRM. “Bharti Airtel”:, “HSBC Bank”: or “Raymond”: are good examples of such success in the Indian context.

While most of these successes are based on on-premise systems, over the last 5 years CRM users have split into two major groups – those who use on-demand systems (as offered by, Seibel OnDemand, Netsuite etc) and those who use on-premise systems (as offered by Oracle, Seibel, PeopleSoft, SAP and Microsoft). CRM success tracking studies show that users using on-demand systems have reported significantly better results than on-premise CRM users across a range of metrics.

Moreover, the availability of several on-demand suppliers of SFA/CRM as software as a service (SaaS) has at last allowed small (20-99 employees) and medium (100-999 employees) businesses (SMBs) to join the CRM party as they can now skirt the bag load of technical issues associated with maintaining systems in-house while cutting down the implementation times and costs. Interestingly, Indian SMBs are now gearing up for a “major spending splurge”: on application service delivery models – that is on On-demand software application services. IT vendors expect that this spending will be largely driven by the need for Indian SMBs to climb the On-demand CRM bandwagon.

Today, with On-demand CRM services available at rates as low as less than “Rs 3000 per employee per month”:, and with over 95% of Indian companies falling within the SMB category, sales personnel and sales managers can expect large scale induction of On-demand SFA/CRM in thousands of companies across the entire size spectrum. Today, not only have costs come down but the technology too has improved so that on-demand services can be customized to fit the needs of SMBs while ensuring for them a reasonably high rate of return on investment (ROI).

Such large scale induction of technology will also require large scale training, changes in recruitment norms and several other headaches for HR managers. Marketing heads and sales managers too need to start picking up knowledge on the benefits of SFA/CRM, how the technology can be customized to the specific needs of the particular companies they serve, the business process re-engineering that will be required to suite the needs of automation and several other related issues.

With SFA/CRM no more remaining the too expensive and exotic technology that only the biggies go for, SMBs throughout the country can be expected to undergo yet another round of technology overhaul even as many of them are still struggling to get their basic IT infrastructure in place. CIOs, marketing honchos, sales personnel, and, of course, HR managers can expect the action to hot up in CRM space over the next few years. The smarter ones among them must have already started to gear up for the emerging brave new world where technology is all set to give a new edge to the street savvy marketer!

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