Indian On-Demand CRM market worth USD 16-18 million

CRM still a new concept among mid-sized businesses with less than 40% adoption, Adoption levels for CRM solutions the highest among verticals like logistics and finance with 60% and 57% adoption levels respectively

Bangalore, November 9, 2010: Zinnov Management Consulting, a leading management consulting firm, today announced the launch of its study on the On-demand CRM market in India and the market potential for cloud based CRM solutions among the Indian SMBs. According to the findings of the study titled 'CRM - A silver lining for Cloud ', the On-Demand CRM market in India is currently at a very nascent stage with a total market size of USD 16-18 million.

The study further highlights that On-demand CRM is gaining ground in India and being in the early stages of adoption, the vendors offering On-Premise CRM solutions have the early mover advantage helping them corner a large market share. These include vendors like Microsoft, SAP, and Oracle.As a part of the released study, Zinnov conducted a survey to understand the market potential for cloud based CRM solutions among the Indian SMBs. The survey covered 403 Indian SMBs across verticals like manufacturing, hospitality, media, real estate, finance and logistics , detailing out their perspective on 'Cloud-based CRM' and providing insights on CRM adoption in India.

The findings of the survey reveal that the CRM tool is still a new concept among small and medium sized businesses in India. While as high as 63% of Indian mid-sized businesses (100 to 1000 employees) have not adopted CRM solutions, the percentage of non-users further goes up for small sized businesses (Less than 100 employees). Overall, the CRM adoption level among the Indian SMBs stands at 25%. As per the survey, the adoption levels for CRM solutions are the highest among the logistics and finance verticals with 60% and 57% adoption levels respectively, followed by hospitality, real estate, manufacturing and media.

Speaking on the launch of the report, Mr. Pari Natarajan, Chief Executive Officer, Zinnov Management Consulting, Pvt. Ltd, "The biggest challenge to the adoption of On-demand CRM in the Indian market is the basic lack of awareness of CRM solutions. Traditional marketing (cold calls and viral) techniques are unable to bring about awareness and the current sales channels are not well positioned to sell cloud solutions. Addressing this requires a three-pronged strategic approach spanning across awareness creation, knowing your customer and selling right."

The survey further reveals that the demand for CRM solutions in India is likely to be driven by both the large organizations and SMEs. In terms of demographic spread, while the Tier-I cities has a significant share of the

CRM market, Tier-II cities are now emerging as the destinations for CRM providers to sell their solutions.

For the SMBs adopting CRM, the reasons cited include the need for streamlining and managing the processes in a better manner. Strengthening the customer relationship, push from the customer and customer retention especially among the finance and logistics verticals are some of the primary drivers for CRM adoption among the Indian SMBs. Majority of the non-users cited that they don't need CRM solutions since they are self-sufficient in managing their relationships on E-mails/ mail clients, Spreadsheets, etc.

Highlighting aspects of the study, Mr. Kishan Bhat, Manager-Consulting, Zinnov Management Consulting Pvt. Ltd said, "According to our survey, sales and marketing teams create a strong case for adoption of CRM as companies find maximum beneficial impact of CRM in marketing and lead management, customer service and maintaining customer accounts. Around 50% of the CRM users interviewed, cited that demand from sales and marketing team led them to adopt CRM solutions. However, when it comes to measuring effectiveness, all the CRM users surveyed believed that CRM helps them increase the overall

effectiveness of the team".

When it comes to the vendors, on-premise CRM solutions have high brand recall among both users and non-users. On-premise solution providers like SAP and Microsoft are better positioned to adopt and even sell cloud offerings better when compared to online CRM providers due to already existing brand recall in the market. SAP pips Microsoft for a higher brand recall among the non-users of CRM solutions as well. However, overall non-users of CRM do not have any preference for known and tested brands for CRM solutions and are ready to try new brands as long as value will be delivered.

"The cloud vendors have not done enough to promote awareness and hence cloud computing/SaaS remains a new terminology for majority of users and non-users. As a result, cloud computing is yet to gain awareness and acceptance in the Indian market. According to the findings of the study,desktop application continues to be the preferred platform for CRM solution with 80% of the users. While half of companies got the solution customized to their processes but only a fourth of companies have their CRM solutions integrated with other applications used in the firm", Bhat added.