Customer Management Spending Will Increase 16% in 2008

A new AMR Research report finds that customer management application spending will increase 16% in 2008 to nearly $2,200 per employee. Mid-market companies (<$1B in revenue) will see the greatest spending increase at nearly 22%.

This year's report reveals a number of industry positives: 2008 will see the largest average planned increase in CRM budgets to date, and the appeal of software-as-a-service (SaaS) is growing and impacting the industry average for upgrade rates (65% of companies now upgrade at least once a year, with 25% upgrading even more frequently).

But these positives are counterbalanced balanced by a set of somewhat alarming data points:

CRM failure rates remain far too high: 29% of companies reported an implementation failure that kept them from going live with the software versus 31% last year and just 18% in 2005.

User adoption remains a challenge, with 33% to 47% of customer management applications facing serious adoption issues.

Unused seats of CRM remain a challenge, with 25% of all licenses undeployed.

More information can be found at www.CRMindustry.com.