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mCRM's Future Lies in B2E

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Posted July 19, 2001 By Staff     Feedback

The immediate future for mobile CRM applications lies not in connecting business with consumers, but in connecting employees and their employers, according to research by Datamonitor.

The immediate future for mobile CRM (mCRM) applications lies not in connecting business with consumers, but in connecting employees and their employers, in particular in developing and enhancing business-to-employee (B2E) sales applications, according to research by Datamonitor.

The pervasiveness of mobile devices such as phones and PDAs, and the increasing bandwidth available to these devices (2.5G and 3G networks) means that the mobile/wireless channel is one that businesses, and consequently CRM vendors cannot afford to ignore. According to Datamonitor, global investment in mCRM in the B2E space will grow from a mere $70 million in 2000 to $1.3 billion in 2005.

In 2001, the global mCRM market (B2E sales applications, B2E services application and B2C applications), will be worth $118 million, compared to just $75 million in 2000. By 2005, its value will have increased to a staggering $1.7 billion. Despite many predictions of Western Europe and Asia-Pacific becoming the hotbeds of global m-commerce, North America will, by the end of 2001, account for 57 percent of global mCRM revenues, Datamonitor found. Britain will account for 16 percent, Germany 10 percent, France 7 percent, Italy 3 percent, Spain 2 percent and Belenelux and Scandinavia 3 percent each.

Sales applications are currently the most popular investment, and will continue to be over the next five years, because they offer the greatest return in investment, and sales departments have significant political force in companies because they generate revenues. B2E sales applications currently account for 52 percent of total global mCRM investment and this will continue to rise to 56 percent in 2005. Wireless connections provided by mCRM applications enable companies to automate business processes that involve employees who spend much of their time out of the office. By extending field sales solutions to mobile channels, the sales representative can update customer data at anytime, from anywhere.

B2E service applications, solutions for the service representatives (such as the employees of utilities companies) account for 41 percent of mCRM revenues globally. In 2005, Datamonitor estimates this will be reduced to just 23 percent. Despite the obvious advantages of B2E service applications, particularly with the integration of location-based services, their future is not as bright as sales applications.

Recent announcements by Siebel, SAP and Onyx, among others, prove that the major CRM players are all investing in the mobile channel. However, recent worries over the viability of m-commerce, the cost of third generation (3G) mobile licenses and the general state of telecoms and technology stocks have led a number of observers to speculate as to which areas of m-business will really justify the investments that have been, and are being, made in the mobile space.

Although B2E applications will still dominate the market, the B2C space will be the fastest growing over the next five years. New technologies such as location-based services and personal area networks (PANs - e.g. Bluetooth) will enable companies to market to and service their customers in a more personalized way, helping them to move ever closer to the holy grail of "one-to-one"customer relationships.

"M-commerce and mCRM are still very much in their infancy," said Robin Goad, technology analyst with Datamonitor. "The real promise of m-commerce still lies in the future when 3G networks become more widespread and mobile devices become more intelligent. As m-commerce becomes more of a reality, the market for business-to-customer applications will really begin to take off."

Reprinted from CyberAtlas.

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