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 Chuck Middle East CRM Software Market Growing at Double Digits

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 By Chuck Schaeffer

Middle East CRM Software Business Partners and VARs Key To Continued Growth

Although parts of the Middle East and Africa (MEA) are mired in political and civil unrest, many regional organizations face business issues common elsewhere in the world: Ensuring existing customers are satisfied and interested in buying additional products and services, while simultaneously cutting costs and boosting productivity.

These companies are implementing customer relationship management (CRM) software systems , whether on-site or hosted, to support and grow their operations. In 2008, analyst firm Gartner forecast CRM software sales to reach $174 million in the region. In fact, CRM software adoption in the Middle East has exceeded the 20%-mark, the Annual Middle East Call Centre/CRM Conference figures reported.

"In terms of the industries that we're really talking about for MEA, it's some of the industries within professional services, financial services, basically those areas which are at the moment seeing a boom. As Dubai and other middle eastern countries transform their economies from being more oil-based towards more professional services and financial services-oriented, we expect some of the growth in CRM to come into play," Chris Pang, principal research analyst at Gartner, told ERP Insights.

CRM Growth in the GCC

Within the Middle East and Northern Africa (MENA) region, some nations' CRM software investments are growing at a more rapid clip than others. The GCC maintains the highest IT spend in the Middle East. Organizations in Oman are predicted to spend $327 million on IT in 2010, according to Business Monitor International. While the collective spending between Dubai and Abu Dhabi may give the UAE the regions highest growth, Saudi Arabia accounts for nearly half of the GCC's total IT spend, with a forecast value of $3.3 billion in 2010 and an expected $4.8 billion in 2014.

And much of that money is going toward business-critical applications such as Customer Relationship Management (CRM) software systems, said Reggie Fernandes, sales manager for the Gulf Region, at Sage Software. "This year signals the start for MENA companies to initiate efforts and moves that can drive them to recovering from the current financial downturn and they can only do this by looking towards developing their internal systems and other integral IT components of their businesses," said Shabeer Ahmad, CEO of Centria Consulting and author of 'The Inspired Manager', in a statement.

In the United Arab Emirates, the retail sector alone is slated to spend heavily on enterprise application software such as CRM, enterprise resource planning (ERP) and human resource management (HRM) solutions, according to Sage. Spurred on by additional competition in the property management and retail space, businesses are expected to begin investing heavily in these enterprise-wide applications by 2013, the ERP and CRM software developer said.

Sage's families of business systems software account for about 30% of the UAE market, AMEinfo.com said. All-told, the UAE should invest about $580 million on enterprise software in 2010, according to Sage.

"As MENA companies concentrate on transitioning from manual environments to full automation of back-office systems with aims to boost efficiencies, our goal is to deliver robust technologies that can accommodate the diversity of all major markets. Through our solutions, organisations can build competitive advantages and increase their profits, which will effectively drive the growth of various markets," Vikram Suri, managing director of Sage, told AMEinfo.com.

The Middle East's call centre businesses also are growing rapidly - and expanding their use of CRM systems, according to Sage. Although some were impacted by the global economic slump, many continue to thrive, in part because of their adoption of cost-saving measures such as CRM, experts say.

"After dodging a massive hit from the global economic meltdown, the MENA region's call centre industry has proven its maturity and forward-looking approach towards strategic growth amidst tremendous challenges," Sage's Fernandes told AMEinfo.com. "By allowing regional call centres to run their business their way, 'SageCRM' holds tremendous potential to help not only call centres in the region but companies in other industries, which experienced stronger drawback from the crisis, in their customer retention efforts and other initiatives targeting growth. We have designed this CRM software to promote complete flexibility, and we are expecting many call centres in the Middle East to appreciate this, adopt the solution and contribute in maintaining the industry's impressive growth momentum."

Onsite vs. SaaS CRM

With its lower cost of entry and accelerated time to market, software as a service (SaaS) CRM adoption is expected to pick-up, although industry-watchers doubt SaaS will enjoy the same rapid adoption it's seen in regions such as North America and Western Europe, comments Sage's Fernandes. Some nations have strict laws that could impact businesses' desire to adopt a hosted software approach. In other cases, end-customers may have limited access to service providers.

"However, in the Middle East, we expect the uptake to be a little bit slower and follow the trend of continental Europe, places like France and Germany as opposed to places like the UK and Netherlands which have been faster adopters of SaaS," Pang said.

That doesn't mean software developers and managed service providers are not marketing and selling SaaS CRM solutions to clients in the region. Whether they are directly targeting end-companies or teaming up with established, local service providers, international manufacturers of customer relationship management systems are branching out in the region. In addition, local MENA companies are bolstering their efforts to expand within their borders and in neighboring nations.

Earlier this year, LINK Development debuted bSolutions.com, a hosted CRM solution for small and midsize businesses throughout MEA, available in Arabic and English. Based on Microsoft Dynamics CRM, the hosted service gives customers access to easy deployment, software upgrades, enhanced analysis of customer information, data management, and increased secure storage, according to the Microsoft Gold partner.

Global CRM Publishers Seek Local Partners

Whether they offer an in-house or hosted CRM solution, local and international developers are partnering with regional and vertical-market experts to educate prospects and earn new contracts.

For example One1 Software technologies is a Salesforce.com partner that serves more than 1,000 customers in Israel. "As a Salesforce.com partner we offer extensive services from developing CRM strategy through to implementation and user training. We help customers make their business more successful with salesforce.com CRM on-demand solutions," the company said.

For its part, YellowPoint Custom Software teamed up with SugarCRM to deliver cloud-based services to its clients in the United Arab Emirates. "We specialize in deploying ERP, CRM, eCommerce, BI and DMS solutions. We have strong foundations in software development for the web, desktop and mobile platforms," the company said.

South African-based Microsoft Gold Certified Partner IMMIX designs, implements and supports Dynamics CRM solutions for clients in professional services, retail, manufacturing, logistics, and other market segments. "In our market, comparatively small numbers of customers are spread over a vast area, and we don't want to limit ourselves in terms of the customers we serve or the solutions we provide. We deliver the entire portfolio of Microsoft Dynamics solutions, including Microsoft Dynamics CRM, Dynamics NAV, Dynamics GP, Dynamics RMS, and Dynamics SL, which is not very strongly represented in this region," said Warren O'Reilly, director of IMMIX.

Businesses in many vertical markets are adopting CRM software systems, often integrating the solutions with other enterprise software applications. The BankDhofar is in the process of moving to Finacle from Infosys Technologies, a move taken to enhance the customer experience and gain a competitive edge. As a result, the bank plans to implement Finacle core banking, CRM, Trade Finance, treasury, eBanking and mobile banking solutions for its operations.

"We have embarked on a technology-led business systems transformation in line with the Bank's growth strategy which implies broad development of our product portfolio, services, sales network and for enhanced overall customer experience. We are confident about strengthening our leadership position in Oman's banking industry, by providing our customers with a world-class banking experience," Ravi Khanna, assistant general manager, IT, at BankDhofar, told AMEinfo.

Elsewhere, the Information Systems Division of the Israel Ministry of Defense (MALAN) chose Microsoft Dynamics CRM, implemented by partner Matrix, to allow its 22 help desk operators to support the division's thousands of end-users.

"Consumers want to receive prompt, first-rate, complete, and effective customer service, and this means that IT entities need to implement a solution that provides a comprehensive response to the needs of the organization. The customer support solution must be flexible, easy to operate, and able to interface with the organisation's systems. Plus, the deployment of the solution needs to be quick and simple," said Shai Naimi, security sector account manager for Microsoft Israel.

No matter their vertical market or geography, organizations in MEA are speedily gaining access to the CRM software tools they want and need to support their customers and their companies growth efforts. Developers' ongoing initiatives coupled with crucial partnerships across the Middle East region mean more value and more choices for customers across the Middle East and Africa. End

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Comments — Comments for this page are closed —

Guest Sesha Arad
  Besides One1 Software's Salesforce.com with FinancialForce, what are the more popular ERP systems in Israel?
  Chuck Chuck Schaeffer
    I believe the market share leading ERP system in Israel is Eshbel Priority. Despite only having a few implementation partners in the country, the Priority ERP system has become a de facto accounting software and ERP system in the country - and also exists in many other countries. The new up and comer ERP application in Israel is likely to be from Microsoft. The maker of four different ERP systems (GP, NAV, AX and SL) finally localized one of them - Axapta / Dynamics AX - in 2010. While Microsoft is aggressively marketing this solution, I believe the localized Dynamics AX version is sold exclusively through a single VAR which may limit the growth. Despite Israel being prone to early IT adoption, SaaS ERP and open source ERP systems have not made much progress.

Guest Shai Feldman
  Are you sure Microsoft Dynamics AX is localised? I saw a demo some time ago and it was not.
  Chuck Chuck Schaeffer
    Yes. I'm pretty sure the Israel firm Eyron did the localization for Microsoft. Among other items, Microsoft Dynamics AX is available in in Hebrew with right-to-left mirroring. The system has also passed Israel compliance standards.
 

 

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... In the Middle East, we expect the uptake [in SaaS CRM] to be a little bit slower and follow the trend of continental Europe, places like France and Germany as opposed to places like the UK and Netherlands which have been faster adopters of SaaS."

~ Chris Pang, Gartner

 

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Middle East IT Forecasts

Analyst firms consistently project the Middle East and GCC to outpace most of the rest of the world in IT spend and technology adoption.

  • IDC is forecasting a year‐over‐year growth in IT spend for the region of 11.0% in 2010, compared to 9.1% for Central and Eastern Europe, 6.3% for Latin America, 4.4% for Asia-Pacific, and just 1.2% for Western Europe.
  • IDC forecasts the global SaaS industry to increase sales to $40.5 billion by 2014, up from $13.1 billion in 2009 and that the 2010 shift to subscription software will result in a $7 billion fall in world-wide traditional software license revenue. The research firm indicates Europe, the Middle East and Africa account for just a small piece of the SaaS market, 13% in 2009, versus 74% in the Americas. By 2014, IDC projects the region will increase its share of such sales to 35%.
  • The Middle East and Africa is set to account for 17% of the world's net ICT expenditure from 2010 through 2012.
  • Companies in the MEA region are set to spend US $49.77 billion in 2010, with the Gulf region contributing about 25% of the total.
  • The UAE is projected to spend US $4.79 billion in ICT investment in 2010 alone, an increase of 12.4% on 2009.
  • The UAE leads all the Middle Eastern and African countries with US $983 in IT spending per capita.
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