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CRM and ERP – Global Market and Latest Trend – How Will the Collaboration of these Two Technologies Impact the Market?

ERP (Enterprise Resource Planning) software has been designed to make organizational processes more effective and efficient. It allows organization to efficiently manage all key functions related to accounting, warehouse, inventory, and supply chain. On the other hand, CRM (Customer Relationship Management) software supports the customer-part of the business. CRM manages information about clients and captures all relevant details as well. This allows organization to build better relationships with their clients and increase customer loyalty which enables long term growth for the businesses.

Global Market
As per the market research, the global ERP market is estimated to grow at a CAGR (2016-2020) of 7.3% to reach US$41.8 billion by 2020. The global ERP market stood at US$29.4 billion in 2015. The chart below depicts the estimated growth in the global ERP market in between the period from 2016 to 2020.

Global ERP

The growth in the global ERP market is driven by increasing adoption of ERP cloud solutions among the organizations to reduce deployment costs, especially in the field of education, healthcare, and retail. In addition, growing reliance on providing easy and convenient access to ERP software via smartphones to allow continuous connection to business related information and facilitate real-time decision making is also driving this market.
The global CRM market stood at estimated US$26.30 billion in 2015. The market is estimated to grow at a CAGR (2016-2020) of 17.8% to reach US$59.7 billion by 2020. The chart below depicts the estimated growth in the global CRM market in between the period from 2016 to 2020.

Global CRM

The growth in the global CRM market is primarily driven by cloud service revenue, which in the application sphere, utilizes SaaS (Software-as-a-Service) as the major delivery model.

Latest Trend in CRM & ERP Market
The latest trend in the global CRM and ERP market seems to be the integration of both software. Integration of these two software allows organizations to streamline their business processes and boost productivity. This help organizations to remove data silos and to enhance efficiency through operations optimization. The integration enables organizations to get a complete view of their customers. That is, their integration provides complete insight into the customer’s needs, buying habits, order history, preferences, account standing, etc. from prospect of sales and support, to finance and accounting.

One such example is of “Microsoft Dynamics 365”, which was launched on November 1st, 2016 by Microsoft. Dynamics 365 is set to offer features and functions that were previously accessible through a bunch of several products. With this offering, Microsoft aims to follow its plan to start a price war with other leading players in the CRM market, especially the market leader Salesforce. The company claims that Dynamics 365, through its bundling of CRM and ERP software in the cloud, while incorporating AI (Artificial Intelligence), will allow its customers to save up to four to five times the cost of traditional CRM providers. The chart below depicts the current market landscape of the global CRM market, where Salesforce is clearly a market leader with 20% market share.

CRM Market

Through this initiative, Microsoft aims to diversify its years of dependence from the company’s Office and Windows, towards business applications. Going forward, it needs to be seen what products Salesforce, SAP, Oracle, and other leading business applications providers will introduce to counter Microsoft, and gain stronger foothold in the market.