The evaluation of chances and threats of the development of ERP, CRM, eCRM markets
By Ernest Syska
(esyska@it-investment.pl)
ERP systems
According to analysts, the Polish IT market grew by eight percent in 2003. It is estimated that the sale of ERP systems grew by no more than the above mentioned eight percent. Although the IT market offer including ERP solutions is impressive, there are few new big investments in the sector. It is closely connected with the specific requirements of implementing such systems (generally regarded as being the most difficult to implement) as well as the financial resources of Polish investors. The potential of the Polish market measured by the ability to improve IT solutions in Polish enterprises is really impressive. With the current conditions of the ERP market, investment budgets of medium and big companies seem to be the only harsh and effective restriction. Today the market is characterised by some companies trying to concentrate on stabilization and others trying to focus on optimisation of changes in IT systems. However, when IT budgets increase, there are some conditions that facilitate complex solutions. The year 2003 saw such a change. IT departments put maximum efforts into maintaining efficiency and developing their existing IT systems. The year 2004 is likely to see the increase in investments in new ERB solutions. Such a surge of investments is facilitated by increasing IT budgets stimulated by the GDP growth, new technological initiatives, a relatively bigger functional flexibility of solutions that are available on the market, more comprehensive experience of leading integrators, implementing a series of analytical solutions, being similar to Business Intelligence solutions, into standard ERP systems.
CRM systems
It is a real challenge for IT companies to encourage entrepreneurs to invest in CRM systems. The purchase of such systems is not so much conditioned by the financial possibilities of companies, but by the need to comprehend how advantageous such investments are and what the estimates and assessment are. The owners and management boards of companies have never given priority to the introduction of some changes in the key sector, namely in companies' Front Offices. A number of benefits resulting from adopting a proper strategy in the sector can be obtained by setting medium and long term objectives. The change in the strategy that is required by CRM systems includes carrying out thorough analysis and taking consistent action.
Moreover, having some IT infrastructure is another problem connected with CRM system implementation. The IT infrastructure should have efficient ERP applications to make use of Front Office instruments. Information coming from the market directly translate into optimising production strategies, increasing or decreasing the service potential and managing infrastructure investments.
The increase of IT investments in CRM on the market is a long-term trend. It results from an average rate of ROI. According to some research, such investments have a bigger rate of ROI than IT initiatives, which compensates for the risk that accompanies such investments. The scale of possible measures of CRM performance is another driving force behind the CRM sector. ERP that focuses on Back Office is limited by the number and diversity of processes which take place in a given company. Unlike ERP, CRM systems may practically include an indefinite number of measurement systems. Observing market trends, shaping customers' behaviour, data-mining of customers' behaviour models may be an important source of information which is likely to shape company development.
Companies that were courageous enough to adopt such a strategy of complex customers' knowledge management receive information that is of strategic importance. The sooner the processes of customer data collection start, the faster key decisions will be taken. The efficient management of a portfolio of investments in CRM in a company requires the ability to effectively minimize insecurity connected with project profitability. Achieving a time to market advantage and the knowledge of real investment risk is of crucial importance.
eCRM, eBiznes
eCRM systems, a subclass of CRM systems, constitute an interesting solution and are an example of business applications development. Their final user differentiates them from CRM systems. While in a traditional CRM application an employee interacting with a customer is a final user, in eCRM he is a customer interacting with a company. eCRM systems are products of an evolution of the philosophy of CRM systems that favours management of contacts facilitated by the Internet. These systems influence decisions taken by those companies whose sale relies on the Internet sale and promotion networks. The Internet sale market is expanding every year. Companies which make use of the Internet to sell their products gather data about their customers. The information is much cheaper than the information collected by CRM systems. The reduction of Total Cost of Ownership is possible due to unique conditions that the Internet provides companies with. eCRM applications enable companies to automate data gathering. Unexpectedly, an Internet customer becomes a part of advanced systems monitoring data and movement on web pages. Being an integral part of applications examining customers' identity, he watches personalized advertisements that the system has chosen for his segment.
eCRM systems have natural restrictions. The degree of popularity of the Internet as a basic means of commercial communication is a critical factor hindering its development. Overcoming the obstacle poses numerous problems: how to win a loyal Internet customer? How to find a proper market segment? The Internet in Poland is too young to have experienced as efficient methods of managing marketing companies as traditional media Above the Line. It is a consequence of changes in the popularity of promotion channels. The process of creating popular Internet media is much slower and more vulnerable to influences, alterations and fluctuations. There are only few services that have abundant groups of loyal users.
Apart from these restrictions, eCRM is bound to become an important element of marketing strategies of many companies. Even today a lot of companies purchase systems that lay the foundations for the technological philosophy. The Content Management system market is expanding, there are more and more Internet shops that sell B2B platforms. Nowadays more and more people can observe higher storage capacities of companies, make Internet transactions and payments.
The author runs IT Investment Consulting company specializing in ROI of IT and Total Cost of Ownership.
(esyska@it-investment.pl)
ERP systems
According to analysts, the Polish IT market grew by eight percent in 2003. It is estimated that the sale of ERP systems grew by no more than the above mentioned eight percent. Although the IT market offer including ERP solutions is impressive, there are few new big investments in the sector. It is closely connected with the specific requirements of implementing such systems (generally regarded as being the most difficult to implement) as well as the financial resources of Polish investors. The potential of the Polish market measured by the ability to improve IT solutions in Polish enterprises is really impressive. With the current conditions of the ERP market, investment budgets of medium and big companies seem to be the only harsh and effective restriction. Today the market is characterised by some companies trying to concentrate on stabilization and others trying to focus on optimisation of changes in IT systems. However, when IT budgets increase, there are some conditions that facilitate complex solutions. The year 2003 saw such a change. IT departments put maximum efforts into maintaining efficiency and developing their existing IT systems. The year 2004 is likely to see the increase in investments in new ERB solutions. Such a surge of investments is facilitated by increasing IT budgets stimulated by the GDP growth, new technological initiatives, a relatively bigger functional flexibility of solutions that are available on the market, more comprehensive experience of leading integrators, implementing a series of analytical solutions, being similar to Business Intelligence solutions, into standard ERP systems.
CRM systems
It is a real challenge for IT companies to encourage entrepreneurs to invest in CRM systems. The purchase of such systems is not so much conditioned by the financial possibilities of companies, but by the need to comprehend how advantageous such investments are and what the estimates and assessment are. The owners and management boards of companies have never given priority to the introduction of some changes in the key sector, namely in companies' Front Offices. A number of benefits resulting from adopting a proper strategy in the sector can be obtained by setting medium and long term objectives. The change in the strategy that is required by CRM systems includes carrying out thorough analysis and taking consistent action.
Moreover, having some IT infrastructure is another problem connected with CRM system implementation. The IT infrastructure should have efficient ERP applications to make use of Front Office instruments. Information coming from the market directly translate into optimising production strategies, increasing or decreasing the service potential and managing infrastructure investments.
The increase of IT investments in CRM on the market is a long-term trend. It results from an average rate of ROI. According to some research, such investments have a bigger rate of ROI than IT initiatives, which compensates for the risk that accompanies such investments. The scale of possible measures of CRM performance is another driving force behind the CRM sector. ERP that focuses on Back Office is limited by the number and diversity of processes which take place in a given company. Unlike ERP, CRM systems may practically include an indefinite number of measurement systems. Observing market trends, shaping customers' behaviour, data-mining of customers' behaviour models may be an important source of information which is likely to shape company development.
Companies that were courageous enough to adopt such a strategy of complex customers' knowledge management receive information that is of strategic importance. The sooner the processes of customer data collection start, the faster key decisions will be taken. The efficient management of a portfolio of investments in CRM in a company requires the ability to effectively minimize insecurity connected with project profitability. Achieving a time to market advantage and the knowledge of real investment risk is of crucial importance.
eCRM, eBiznes
eCRM systems, a subclass of CRM systems, constitute an interesting solution and are an example of business applications development. Their final user differentiates them from CRM systems. While in a traditional CRM application an employee interacting with a customer is a final user, in eCRM he is a customer interacting with a company. eCRM systems are products of an evolution of the philosophy of CRM systems that favours management of contacts facilitated by the Internet. These systems influence decisions taken by those companies whose sale relies on the Internet sale and promotion networks. The Internet sale market is expanding every year. Companies which make use of the Internet to sell their products gather data about their customers. The information is much cheaper than the information collected by CRM systems. The reduction of Total Cost of Ownership is possible due to unique conditions that the Internet provides companies with. eCRM applications enable companies to automate data gathering. Unexpectedly, an Internet customer becomes a part of advanced systems monitoring data and movement on web pages. Being an integral part of applications examining customers' identity, he watches personalized advertisements that the system has chosen for his segment.
eCRM systems have natural restrictions. The degree of popularity of the Internet as a basic means of commercial communication is a critical factor hindering its development. Overcoming the obstacle poses numerous problems: how to win a loyal Internet customer? How to find a proper market segment? The Internet in Poland is too young to have experienced as efficient methods of managing marketing companies as traditional media Above the Line. It is a consequence of changes in the popularity of promotion channels. The process of creating popular Internet media is much slower and more vulnerable to influences, alterations and fluctuations. There are only few services that have abundant groups of loyal users.
Apart from these restrictions, eCRM is bound to become an important element of marketing strategies of many companies. Even today a lot of companies purchase systems that lay the foundations for the technological philosophy. The Content Management system market is expanding, there are more and more Internet shops that sell B2B platforms. Nowadays more and more people can observe higher storage capacities of companies, make Internet transactions and payments.
The author runs IT Investment Consulting company specializing in ROI of IT and Total Cost of Ownership.
