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CRM has become a higher priority for CIOs: Gartner

Customer relationship management (CRM) has moved from 18th to 8th technology priority for CIOs in 2012, according to a global survey by Gartner.

Another Gartner study, its 2012 CEO Survey, found that CEOs cited CRM as their most important area of investment to improve their business over the next five years.

“The focus on the customer is increasingly important for business leaders, despite times of continued economic uncertainty and government austerity,” said Jim Davies, research director at Gartner.

“Effective leaders use technology to strengthen the customer experience regardless of the economic environment, and they see customers as the key factor in helping their business deliver growth and operational efficiency in 2012. They also understand that a new strategy is needed to embrace social and media trends,” he added.

Gartner predicts that by 2014 companies that refuse to communicate with customers via social channels will harm their relationship with customers as much as ignoring their emails or phone calls does today.

“In 2012, CRM executives are faced with the challenge of taking ‘social’ more seriously — not as ‘just another channel,’ but as a whole new way of doing business,” said Ed Thompson, vice president and distinguished analyst at Gartner.

“Our discussions with service providers and end users indicate that CRM services are shifting from a focus on point solution deployment centered on application suites, to a ‘customer experience’ that brings together customer information, analytics, workflows, mobility and social CRM disciplines into a richer, multichannel access to capture the entire customer journey,” he added.

Gartner said worldwide CRM software revenue reached $12 billion in 2011, a 13.5% increase from 2010, and it is forecast to grow a further 7% in 2012.

Gartner analysts added that a growing percentage of this revenue is accrued through software-as-a-service (SaaS) and cloud computing. In 2011, SaaS accounted for 32% of the CRM software market and is expected to grow 16% in 2012.

As competition intensifies, service providers will either have to grow their own CRM practice to incorporate cloud computing, social CRM, digital media and mobility, or they will have to form partnerships with specialist vendors, Gartner said.

Service providers that are still focusing on traditional on-premises CRM solutions today will gradually lose out to the competition during the next one to two years, it added.

“We recommend organisations view 2012 as a year to revisit their CRM strategy. The potentially disruptive impact of cloud, big data, social and mobile cannot be overlooked,” Davies said.

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