Singapore's CRM application software market is expected to cross US$79m by 2004, from US$26m last year, growing 32% a year between now and then

By Andrew Wee

SINGAPORE leads East Asian countries in adopting CRM (customer relationship management) solutions and will see a dramatic jump in companies embracing CRM.

'In East Asia, Singapore is a little ahead of Hongkong in terms of CRM adoption,' Dick MacDonald, Hongkong-based managing partner for CRM practice at PricewaterhouseCoopers (PwC), told BizIT. 'There's a lot of competition being spurred in Singapore's telecom and financial services' sectors. World brands like Singapore Airlines are very concerned about continuing to evolve their brand and keep ahead of the competition.'

PwC's East Asia practice covers Singapore, Malaysia, Thailand, Indonesia, Hongkong, China, Taiwan, and the Philippines. The key driver for this trend here is due to the availability of options or alternative service providers. 'What prevents options in the market are regulatory or political barriers,' he said. 'Choices, associated with deregulation or other changes, force companies to do something different to keep customers. This involves two aspects - keeping up and differentiating themselves.'

However, despite most Singapore companies having some form of CRM, very few have implemented it effectively.

'CRM is not a brand new thing because every company needs to have customer care and sales and marketing in their operations,' he said. 'But less than 30 per cent of the top 50 Sin gapore companies have really embraced CRM effectively.'

The reason the other 70 per cent of the top 50 Singapore companies have not adopted CRM effectively is because they want ROI (return on investment) justification.

'Implementing CRM is not a cost-saving exercise and local companies struggle with that issue,' said Mr MacDonald. 'There are cultural factors involved as well, with Asians typically being reluctant to be in the forefront of change.'

Other analysts are more optimis tic. According to researcher IDC (International Data Corp), Singapore's CRM application software market is expected to cross US$79 million (S$143 million) by 2004, from US$26 million last year, growing 32 per cent a year between now and then. Comparatively, the Asia-Pacific CRM market outside of Japan is expected to touch US$1.2 billion by 2004, from US$339 million in 1999, growing at 37 per cent a year.

CRM could be a form of disruptive technology - just like PCs when they first debuted - which businesses can use to their benefit.

'When PCs were first introduced, there were lots of articles that said we cannot justify, through ROI, the purchases of PCs; it doesn't make sense, it sits idle 99 per cent of the time, and the one per cent that you do use it, it's a very expensive word processor and just a waste of money,' Mr MacDonald said. 'Thank goodness people didn't believe those things because most people will not be able to do their jobs now without a computer, even if it's just word-processing. It's disruptive technology that evolved into a new way of doing business.'

He said companies in the late 1970s and 1980s competed on marketshare, and in the 1980s and 1990s on operational efficiency. 'Now, companies are competing on customer experience and customer relationships. Electronic channels are also coming up. That's a disruptive force and companies can embrace it and succeed, or they can ignore it and die.'

Companies implementing CRM will require some time to fine-tune their efforts. 'My expectation is that there is going to be an exponential increase in CRM adoption in Singapore,' he said. 'It's going to happen within the next 12 months. Once one company starts, everyone's going to have to scramble to keep up to be successful. You'll probably see a flurry of activity over the next two to three years and I guess 50-60 per cent of the top companies here are going to do something in the next 12-18 months.'

An inhibitor: changing corporate mindsets. 'Singaporeans are extremely proud of the success they've earned. They've been taught to think through problems methodically, but it can also be limiting,' he said. 'If you want that hard ROI justification before you do a single thing, you will fail because you can't justify CRM in hard dollars.'

In the US and Europe, companies have succeeded or failed depending on how they have serviced customers. 'Singapore and Hongkong's strength lies in that they're very logical and numbers driven, but it may prevent them from seeing creative opportunities to expand or change the way they do business,' he said.