The need to be customer centric is the underlying essence of any business. The turn of the century saw how having a Customer Relationship Management strategy and solution in place helped companies from telecom and BFSI verticals achieve huge revenue targets. Industry analysts and observers feel that the CRM wave is only getting stronger and more mature.

Vertical Penetration
Financial institutions, insurance companies, brokerage, software products and services, trading and distribution, general services, and telecom still remain the hottest verticals driving CRM implementation.

The adoption of CRM is also being driven by new insights along with tighter integration with ERP and supply chain management software. The shift toward service-oriented architecture (SOA), the need to deliver a better branded customer experience, and expansion of offshoring operations continue to drive this market. The insights and analytics are further helping them in making their processes more effective. The other verticals, including automobile, professional services, manufacturing, FMCG, and retail, are adding the much-needed "extra punch" to the CRM story in India.

Gopakumar Sivanandan, head, Solution Architecting Team, says, "It is interesting to see how verticals are getting more mature, and how it is picking up in others. These verticals now understand the value in leveraging technology in knowing customers better."

Gopakumar points out that banking, professional services, and telecom verticals make up for 70% of the CRM market in India. SAP has identified a set of six upcoming verticalsautomobile, ITeS, pharma, lifecycle, consumer product, and retailas their focus for the next couple of years.

However, Sanjay Agarwala, director, ESS, points out that though the CRM as a terminology or technology may not be new to India, its influence, in the way majority of our businesses are run, is yet to be realized."

According to market estimates, while the mid-market is catching up at the rate of 40% annually, the SMB segment has a relatively poor penetration, approximately 5%.

An IDC report had estimated the 2005 CRM market in India to be worth $73 mn and forecasted it to increase at a CAGR of 22.5%, to reach $200 mn by 2010. While CRM comprises the largest segment of packaged applications in business, industry analysts have predicted that Europe and Asia Pacific would represent the next huge growth opportunity for CRM vendors.

The CRM market in Asia Pacific is forecasted to grow at an annual rate of 19% between 2006-2010, to reach $846 mn in total software revenue.

Changing Perspective
Organizations are beginning to understand that it is a management strategy that enables them to become customer-focused and develop stronger relationship with its clientele by aligning business around customers needs. Software is just a part of this process. Implementation of CRM packages by various companies from the telecom and BFSI verticals at the turn of the century has helped newer verticals in understanding the need for a CRM solution, say industry analysts.

There is a lot happening within the CRM market, says Gopakumar. "One sees a lot of traction within CRM services as the quest to differentiate yourself from the rest of the competitors is clearly becoming the prime differentiation."

Strategic Focus
Sudhir Shetty, senior director, International Services, Talisma says, "Over a period of time, Indian companies have realized that the key to a successful CRM initiative is to have a defined CRM mission. Along with that there should be certain strategic organizational changes in processes with effective post implementation strategies like training, RoI analysis, and business assessments. And, strategies to identify key drivers for a CRM initiative to ensure a quick and long-term step-by-step CRM implementation."

Vendors feel that the starting point for any company is to have a strategic focus on CRM as it addresses problems in a number of areas. Sales force automation is one of the most important areas as most organizations grapple with the basics of a database that should have prospects, leads, and customers.

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