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SMBs Poised to Spend on CRM

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Posted June 4, 2004 By Sean Michael Kerner     Feedback

Forecast from AMI-Partners suggests small and medium sized businesses are more keen on software purchases.

Customer relationship management software and sales force automation are favored ticket items with small and medium-sized businesses, according to a report from AMI-Partners.

The firm's study of the 2003 U.S. Enterprise Software Market found that small and medium sized businesses spent about $1 billion overall on enterprise software in 2003 out of a total $14.6 billion spend for the entire (small/medium/large) U.S market. In addition, CRM/SFA accounted for about 54 percent of the sales in 2003, up from 37 percent in 2002.

The AMI Partners study surveyed more than 1,450 small, medium and large business IT decision makers across the U.S. for the results. Most of the types of software surveyed were across CRM, SFA, ERP and supply chain management (SCM) software packages.

In the U.S. market, the top three features that were deployed across enterprises were call center, forecasting and account knowledge packages. On demand, pay as you go type packages are also seen by AMI Partners as the way in which the SMB market is headed.

The survey round that SMB's enterprise software growth rate will increase by about a 14.3 percent compound annual growth rate this year. The results also suggest SMB's have been underserved so far, with less than 10 percent of small businesses and 25 percent of medium sized businesses deploying CRM/SFA in their enterprise.

In addition, they noted other surveys that indicated the CRM/SFA/ERP/SCM sectors would be a strategic focus in the next 12 months for over 407,000 SMB's in the U.S.

AMI said large enterprises are witnessing and understand IT's contribution to their bottom-line, but that many SMBs remain skeptical that investing in enterprise software solutions will drive business growth and productivity. However, that sentiment appears to be changing, according to the survey results.

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