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Issue of May 2005 
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CRM in Indian enterprises

The Indian experience

Although CRM is not very widely used in Indian companies, its relationship with India Inc has been sweet. by Soutiman Das Gupta

The major users of CRM are companies in the telecom and financial services verticals. Both have a large number of users who need to be supported through call centres
Pranav Kumar,
Research Director, APAC, Gartner

Indian companies have traditionally focussed on processes and technologies, with the objective of optimising these processes using enterprise applications such as ERP. The focus has always been inwards. Now as companies become more customer-oriented, they realise the benefits of including customers and business partners in their value chain. As a result, Indian companies are becoming more focussed vis-à-vis external entities.

However, in spite of relatively mature CRM solutions being available, its use is not very widespread. Companies in BFSI, telecom and BPO are the only ones that use this technology extensively.

The infrastructure strategies survey conducted by Network Magazine and IMRB among Indian CIOs reveals that only
13 percent of the companies have CRM as an IT priority. Among companies which have already invested in enterprise applications or are planning to invest, only 23 percent say yes to CRM. 19 percent of the companies plan to dedicate part of their planned investments to CRM.

The figures are not very high considering that ERP is the second-highest IT priority for 41 percent of the total respondents, and that 69 percent of companies which have already invested in enterprise applications or are planning to invest want to go with ERP.

Executive Summary

CRM's relationship with India

India Inc does not consider CRM a business priority, the honourable exception being BFSI, telecom and BPO. We examine why.

Power pill

The present focus is largely on automating back-end processes before embarking on front-end processes like CRM. It will take a while for widespread CRM adoption.

Slow to gain Popularity in India

CRM is also about getting your wealth-creating processes in place, which are the back-office processes that address customer needs
Subhomoy Sengupta,
General Manager, Applications Sales, Oracle India

Indian companies are on a journey that can only end with them becoming more customer-centric. It’s only now that the use of technology to automate customer processes such as sales, marketing, and after-sales service is getting due attention.

“The reason for the slower adoption of CRM software is that many companies do not have adequate IT infrastructure to support these solutions. Also, many companies try to first automate their back-end processes such as accounting, inventory and ERP before embarking on front-end processes like CRM,” explains Ashish Kamotra, Chief Executive Officer, ADAPT Software IAP India.

Increased competition, margin pressures and demanding customers are forcing companies to look at CRM in a big way. However, it is interesting to note that while the CRM software market is indeed in comeback mode, growth may not come from increased purchases of the enormous CRM suites as in the past.

Says Girish Krishnamurthy, General Manager, India, Talisma Corporation, “Enterprises will focus on adding specific functional modules and new business models to their application portfolios. Instead of powerful, complex software, large and small enterprises are choosing CRM applications that are easy to launch and easy to use.”

The growing market

User's Choice
Company
Solutions
Contacts
Adapt Software
Applications

ADAPTcrm ADAPT Software IAP India
Phone: 91 124 5050 621, 5050 622 Website: www.adapt-india.com

Business Objects

"BusinessObjects Enterprise
"Web Intelligence
"Crystal Reports

 

Sonata Information Technology Phone: 91 80 2657 5800
Website: www.businessobjects.com
businessSolutions/crm /default.aspx
Microsoft Microsoft CRM Microsoft India
Phone: 91 124 5158 000
Website: www.microsoft.com/

Oracle Oracle CRM Oracle India
Phone: 91 124 2549 250/2549 260
Website: www.oracle.com/ applications/crm/index.html
Siebel Siebel CRM
" Sales Force Automation
" Marketing Automation "Call Centre and Service
" Business Analytics
" Hosted CRM

Siebel Systems Software India
Phone: 91 80 5136 7505 www.siebel.com/crm/customer-
relationship-management.shtm

Talisma Talisma Multi-channel CRM solution

Talisma Corporation
Phone : 91 80 2361 3377
Website: www.talisma.com
/tal_products/default.asp

Talisma quotes Frost & Sullivan’s findings that India is the fastest-growing market for contact centre systems in the APAC, with a projected CAGR of 19.5 percent. According to IDC, the CRM market will touch $11 billion by 2008, marching at a CAGR of 8.9 percent in the 2004-2008 period. The market for Customer Interaction Management is currently estimated at $400 million, and predicted to grow to nearly $1 billion by 2008 (Source: Gartner).

The key verticals fuelling the growth of operational CRM in India are banking, finance, insurance, telecom, utilities, manufacturing and healthcare. According to the infrastructure strategies survey, companies in the verticals of BFSI and telecom/IT/BPO show the maximum amount of CRM use. 39 percent of BFSI companies and 36 percent of telecom/IT/BPO companies are among those companies that have either invested or plan to invest in enterprise application tools.

After the initial phase of euphoria, organisations have realised that there is more to CRM than just setting up call centres or deploying some sales force automation tools. “It’s about getting your wealth-creating processes in place, which are normally the back-office processes to address customer needs,” explains Subhomoy Sengupta, General Manager, Applications Sales, Oracle India.

So far, CRM has been more popular with telcos and financial services organisations, but it is increasingly getting more attention from mid-size organisations in other verticals as well.

“The major users of CRM are companies in the telecom and financial services verticals. Both have a large number of users who need to be supported through call centres. There is an increasing importance of churn and customer profitability issues,” says Pranav Kumar, Research Director, APAC, Gartner.

Growth inhibitors

An organisation’s inability to get a quick ROI is a hurdle in the adoption of this technology. The high cost involved in deploying CRM—hardware, implementation, software, and expertise to handle the implementation—acts as a barrier to proactive adoption by Indian enterprises.

“The Indian market is characterised by a pool of small and medium-sized companies. These companies lack awareness and the necessary infrastructure to deploy full-scale solutions, inhibiting the growth of CRM,” says Prachi Kanekar, Research Analyst with Frost & Sullivan.

Not much CRM here

The reason for the slower adoption of CRM software is that many companies do not have adequate IT infrastructure to support these solutions Ashish Kamotra,
Chief Executive Officer, ADAPT Software IAP India

In the conventional sense, any mass-distributed product where the company has no direct contact with the end-user would not find much value in CRM. “However, if the partner is treated as a customer then there is no vertical that can remain untouched by CRM,” explains Kamotra.

The infrastructure strategies survey reports that companies in verticals such as FMCG, consumer durables, government and PSUs use CRM the least, with only seven percent of those who have either invested or are planning
to invest in enterprise application tools giving it the go-ahead. Companies in the chemical, pharmaceutical, services, auto and auto components verticals show relatively less use as well at 19 percent.

“Manufacturing organisations, especially small and medium ones, have not been so far much interested in CRM, largely because of pre-occupation with ERP, which is usually more important for them,” says Pranav Kumar. However, in companies where conventional CRM components such as sales force automation and after-sales-service automation are not really needed, CRM finds its place in terms of data mining, cross-sell and up-sell opportunities.

New verticals

Segments with increasing competitive pressures and high-value sales will deploy sales force automation systems. Support-oriented organisations are the next big gainers if they deploy CRM
Rajeev Mittal,
Director, Small and Medium Solutions and Partners, Microsoft India

Companies that are likely to deploy CRM solutions in the future are pharmaceuticals, BPO, retail, FMCG, healthcare, airlines and the government. Manufacturing is also showing potential for CRM deployment with a focus on maintaining relationships with dealers and helping them enhance their sales and service capabilities.

“Segments with increasing competitive pressures and high-value sales will deploy sales force automation systems. Support-oriented organisations are the next big gainers if they deploy CRM. A typical example of this would be IT resellers and systems integrators, since they need both sales and service to remain competitive,” says Rajeev Mittal, Director, Small and Medium Solutions and Partners, Microsoft India.

Quality, consistency and customised care to the patient help the healthcare service providers to retain the patient as well as the entire family for their lifetime. “CRM technology is implemented to minimise cost and time in healthcare, and ultimately enhance the customer relationship,” says G Radhakrishnan Pillai, Head, IT, SRL Ranbaxy.

It helps to re-use the information available with business in order to analyse the customer’s behaviour and expectations. Technology can play a role to make this process a lot easier.

New application areas

Along with maturity of enterprise applications such as ERP and databases, companies will want to integrate their ERP systems with CRM and supply chain software. This will bring about, in the true sense, what is known as an extended enterprise. It will enable more enterprise users to look at CRM as an enterprise-wide software solution with back-end integration, rather than being understood as a stand-alone software module for functions such as call centre automation, sales force automation, and selling on the Web.

Soutiman Das Gupta can be reached at

soutimand@networkmagazineindia.com

 
     
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