Cloud Computing CRM
CRM search»International CRM»Asia Pacific Region»Australia CRM Market

 Chuck The Asian CRM Software Landscape

4 stars Average rating: 4 (from 82 votes)
 By

Cloud Computing and Software as a Service CRM Are Growing in Asia

Cloud computing adoption in the Asia-Pacific region is accelerating sharply. According to a Springboard Research report, business software applications continue to be the most widely adopted cloud-based enterprise software solutions. The bulk of this category is comprised of on demand customer relationship management (CRM) systems, as they currently represent the single largest individual SaaS market in the Asian region.

While cloud adoption is "most significant" in Australia and New Zealand where 34% of survey respondents reported that an online implementation was either underway or completed, Southeast Asia markets reported the highest incidence of planning to make the move.

Springboard benchmarked the Asian SaaS CRM software market at just under USD $70 million in 2006, and estimated a growth to just over USD $460 million by end of this year.

"Asia Pacific (excluding Japan) companies are particularly keen to exploit the cost savings potential of cloud solutions, with 49% viewing the cloud as primarily a cost-saving measure, versus only 23% who mainly view [cloud computing] as a strategic investment," said Sanchit Vir Gogia, associate research manager of Software at Springboard Research.

There is an increasingly decided preference for CRM software-as-a-service (SaaS) over on-premise versions with the primary reason being lower cost. A substantial number of new CRM buyers are looking to replace existing on-premise CRM deployments. The 2009 report by Springboard said that on-demand CRM was the most frequently used hosted application after email. The current evidence suggest this shift is a trend that will continue after 2010.

India CRM software deployments are primarily intended to support their call center industry. Japan, Singapore, and Australia show CRM deployments similar to those in the U.S. and represent slower but steady growth in CRM deployments. Malaysia is small but growing. Korea is also showing marked increase of interest in deploying CRM software online. The Philippines and Thailand are showing strong potential, primarily due to a fairly recent influx of call center business.

According to Global Industry Analysts, Sales Force Automation (SFA) software is picking up fast in the Asia pacific region. Asia represents the fastest growing enterprise software market with a CAGR (compound annual growth rate) of more than 12% over the analysis period. Growth in the market primarily stems from China, Australia, South Korea and India, which are the leading application software markets in the region.

Small and midsize businesses (SMBs) in the region tend to prefer cheaper, local CRM vendors over western vendors. Large enterprises, however, often use big brand western CRM vendors although several analyst firms, including Datamonitor, warn vendors to use caution in entering the region because government and localization requirements are often not favorable. Nearly all western CRM vendors achieve market share in the region via acquisition of local CRM vendors, system integrators or consulting shops. Straight land and expand introduction of western CRM tends to fail miserably.

Global Industry Analysts also reports the CRM and SFA software markets are dynamic and highly competitive with low barriers for entry in the sector. "As a result, the number of players operating in the SFA software market is as myriad as the solutions available in the market," says the report. "Competition in the market has intensified further in recent years as point solutions and pure play vendors continue to battle to add value, and strengthen position in the regional and global markets."

Actual Customer Relationship Management software deployments vary extensively throughout the Asian region as there is little to no consistency in the cultural, economic or political arenas. Software, compliance and business process localization requirements can be extremely taxing and government interference can result in poor returns. Business processes tend not to be uniform between offices of the same company placed throughout the region. Since this largely negates many of the benefits of CRM software automation, failure rates are often more reflective of disjointed processes than of software malfunction.

"Cultural differences certainly impact CRM service and support deployments too," says Kris Brannock, vice president of Corporate Development for Vertical Solutions. "However, I'm not sure cultural differences are the biggest culprit. Typically, we've found what matters most is how developed and technology-driven a country is that impacts a CRM deployment."

"Often times when we work with CRM service and support deployments, and specifically those that include field mobile deployments. What seems to be a perfect solution in the U.S. often doesn't work at all in various other countries," he said. "There could be only 15 miles between countries but the mobile solution that works perfectly in one, may have little or no connectivity (even in reviewing multiple providers) in another."

Information technology infrastructures vary widely throughout the region. Australia, Japan and South Korea, for example, normally have strong infrastructures and highly sophisticated technology users. Thailand, Cambodia and Vietnam, on the other hand, often do not. CRM software deployments can often fail merely because of technology issues ranging from connectivity problems to integration and compatibility conflicts.

Whether acquiring traditional packaged software or software as a service CRM solutions, Asian Pacific countries often purchase CRM systems based on local customs and programs spurred forward by governmental initiatives. Some individual country examples and highlights include the following:

  • The iN2015 plan in Singapore is a prime example. The Singaporean government is aiming to adopt a completely online delivery model for all services by the year 2015. As this directive crosses all industries, cloud CRM software deployment is on the rise both in the public and private sectors.
  • In China, inexpensive adaptations of Customer Relationship Management systems fare the best. High-cost, intricate CRM products fare the worst. SaaS CRM is a stronger play in the country. Government intervention and censorship are high, software piracy is high and non-technical local or cultural differences can have a big impact in cloud systems.
  • Japan, South Korea, Australia, New Zealand, Taiwan (plus Singapore and Hong Kong), all have savvy users and sophisticated companies, typically interested in full suite CRM application plays. Social media does well is these regions and is usually a welcome addition to customer management software products. Strong infrastructures and rampant mobile use make mobile CRM easy to deploy and highly desirable.
  • Philippines, Thailand, Vietnam, Cambodia, Laos and Malaysia are all are emerging markets and attractive software development and call center offshore outsourcing locations. As a result CRM focused on call centers will likely do well in this region. Inexpensive adaptations of CRM systems fare the best. But again, software piracy is high and local customs present non-traditional challenges to many customer relationship management software manufacturers.End

 

How would you rate this article?   

div
 Filed In Categories: Asia Pacific CRM
div
 Tags Tags: Asia CRM, Australia New Zealand CRM
div
 Trackback Permalink: www.crmsearch.com/asia-crm.php
div
Author  Author: Chuck Schaeffer
div
 Share Share:    Bookmark and Share

 

Comments — Comments for this page are closed —
Guest Harold McGladrey
  You highlight some big issues for CRM software vendors looking at the China market. Do you think this will limit CRM adoption in China?
  Chuck Chuck Schaeffer
    Somewhat, however, CRM adoption will rise with the overall China economy. Gartner reported that the Asia Pacific CRM market grew 20 percent in 2011—that's approximately twice the growth rate as the U.S. However, the Asia Pacific region is large and growth in CRM is quite disproportional. More mature markets such as Japan, Australia and New Zealand lead the growth, countries such as China, Singapore and India trail the leaders, and other countries such as Indonesia, the Philippines and Vietnam lag far behind. In China, local competitors (such as Kingdee and Ufida) have historically fared well in the SMB market, however, I am clearly seeing this change as global SaaS CRM leaders (such as Salesforce.com, Microsoft CRM, NetSuite and Oracle CRM on Demand) generally team with local providers and are making big gains in nearly all Asia Pacific markets.
 

 

Share This Article

 

Quote

What seems to be a perfect solution in the U.S. often doesn't work at all in various other countries. There could be only 15 miles between countries but a mobile solution that works perfectly in one, may have little or no connectivity in another."

Kris Brannock, VP, Vertical Solutions

 

Related Articles

 

More Articles By Chuck

 

 

Global CRM Markets

Customers and the vendors which serve them exist from Austria to Zimbabwe and everywhere in between. CRM strategy and supporting CRM software applications must adapt to differences in culture, data structure, business processes, privacy, compliance and views of the customer relationship by region and country.

Software as a Service (SaaS) CRM continues to be the highest growth sector channel in the customer relationship management software industry, however, few of the SaaS CRM data centers reside in Asia, which poses both regulatory and data privacy concerns. Our next global CRM article will highlight the issues and alternatives for SaaS CRM adoption in Asia and other global regions.

 

 

CRM Price Quote

 

 

Global CRM

Follow Us
social
social
social
social

crm search

Home   |  CRM  |  Sales  |  Marketing  |  Service  |  Call Centers  |  Channels  |  Resources  |  Blog