Research Overview
U.S. Utilities CRM and Billing Software Spend on the Rise
Providing the utilities industry with cost-effective solutions that increase efficiency and effectiveness of customer-facing functions has given a boost to sales of CRM and billing software. Since the utilities industry is increasingly facing external pressures such as changing regulatory environments, public scrutiny, and competition, as well as internal pressures to reduce operational costs and increase productivity, high-performance CRM and billing solutions including the Web, electronic bill presentment and payment (EBPP), self-service, and mobile field service are likely to continue to draw investments from the industry.
This Frost & Sullivan research service analyzes the drivers and restraints to adoption of CRM and billing software in communications and utilities. The study discusses the various trends and opportunities while providing in-depth vendor market share analysis, revenue forecasts, and vendor profiles. It also provides guidance to vendors to best align their positioning strategies with the changing environment and end-users to maximize ROI from these solutions.
Convergence and Customer-Centricity Impel Growth for CRM and Billing Software in Communications Industry
Following the U.S. economic recovery after mid-2003, communication service providers (CSPs) are slowly augmenting their capital expenditures. Nevertheless, there is much pressure to keep operating costs such as customer service expenses low, while increasing revenues by service expansion, and also maximizing customer value. Toward this end, converged services such as triple and quadruple play, and customer centricity have emerged as top business strategies in the communications industry, thus fueling the demand for CRM and billing software applications that support convergent and customer-centric capabilities in a cost effective manner.
"Convergence and customer centricity in communications has also increased competition between CRM and billing vendors, as they increasingly compete in each others markets," note the analysts of this research service. "For the year 2004, in the U.S. communications CRM market, billing vendors held 20 percent market share, while in the communications billing software market, CRM vendors held 18 percent market share." Vendors need to align their solution strategies with the growth opportunities in the markets. Expanding solution footprints to provide self-service, and EBPP capabilities present growth opportunities for both CRM and billing vendors. Suite vendors need to unbundle packages and focus on selling modules such as mobile applications, up-sell/cross-sell applications, and integrated order management to meet immediate customer needs and thereby increase sales.
Self-service, CRM Analytics, and Convergence Billing Solutions Hold Huge Growth Potential in Communications and Utilities
"Moving customers away from expensive sales and service channels such as call centers to far more cost-efficient means such as the Web, email, and interactive voice response (IVR) systems is more profitable for CSPs," say the analysts. "Software applications such as self service and EBPP are likely to continue to draw investments from both the industries." The telecommunications industry, especially wireless, is keenly focused on retaining existing customers to improve near-term profitability. CRM software applications such as CRM analytics will drive the segment to improve its profit margins.
As both communication and utility industries begin offering multiple services, they are likely to need a homogenous billing solution for these services to capitalize on the associated cost savings, thereby boosting sales in the billing software market. The combined CRM and billing software U.S. market in communications is projected to grow from $700.0 million in 2004 to $928.0 million in 2008, representing a compound annual growth rate (CAGR) of 7.0 percent over this period. Meanwhile, the utilities CRM and billing software U.S. market was worth $200.0 million in 2004 and is expected reach $316.0 million in 2008, representing a CAGR of 12.0 percent over the same period. Self-service, CRM analytics, and field service are expected be fastest growing segments in these markets.
Extended TOC
1. U.S. CRM and Billing Software Markets in Communications and Utilities
- Introduction and Executive Summary
- 1. Introduction
- 2. Market Definitions
- 3. Executive Summary
- Industry Trends
- 1. Communications
- 2. Utilities
- 2004 Market
- 1. Vendor Peer Groups
- 2. Communications CRM Software Market Share by Vendor
- 3. Communications Billing Software Market Share by Vendor
- 4. Utilities CRM and Billing Software Market Share by Vendor
- Market I - U.S. Communications CRM Software Market
- 1. Market Drivers
- a. Cost-cutting measures in contact centers via human resource reduction and empowerment of automated self-service channels such as web and IVR
- b. Demand for CRM analytics to support churn management and customer lifecycle management strategies
- c. Customer experience is the next frontier for CSPs to build business value and competitive advantage
- d. Impetus to translate inbound service interactions into up-sell, cross-sell, or retention opportunities
- e. Pressure on service operations such as field service to increase worker productivity and reduce operating costs
- 2. Market Restraints
- a. Cost and complexity of integration of new technology within legacy CRM and billing environments
- b. Apprehension and uncertainty with TCO and near-term ROI from CRM investments
- c. Competing delivery models such as Outsourcing present reduced cost, reduced risk alternative to licensed software
- d. Carrier tendency to choose in-house or custom development over buying new software
- e. CSP Consolidation and attrition reduces the number of market participants
- 3. Market Forecasts
- 1. Market Drivers
- Market II - U.S. Communications Billing Software Market
- 1. Market Drivers
- a. CSPs need to consolidate Billing systems and operations for associated cost savings
- b. Need for Billing systems to support new and enhanced services, partner content, bundling of services
- c. Reduced operating budgets of CSPs effects increased demand for packaged software as opposed to more expensive custom development
- d. Availability of modular architecture based convergent software providing faster time to deployment and business value
- e. CSP view of Billing as a customer-centric strategy and competitive differentiator
- 2. Market Restraints
- a. Substantial investments in legacy systems and resistance to deploy new systems
- b. Competing investments such as CRM to tackle pressing pain-point of customer churn
- c. Competing delivery models such as Outsourcing present reduced cost, reduced risk alternative to licensed software
- d. Carrier tendency to choose in-house and custom development over buying new software
- e. CSP Consolidation and attrition reduces the number of market participants
- 3. Market Forecasts
- 1. Market Drivers
- Market III - U.S. Utilities CRM and Billing Software Market
- 1. Market Drivers
- a. Internal pressures to reduce operational costs and increase worker productivity
- b. Inability of Legacy CIS systems to support strategies to adapt to changing regulatory environments, public scrutiny, and competition
- c. Cost-cutting measures in contact centers via human resource reduction and empowerment of automated self-service channels such as web and IVR
- d. Unbundling in Utility markets, driving major changes across organizational structures, business processes and IT systems
- e. Availability of modular architecture based, industry-specific packaged software providing faster time to deployment and business value
- f. Utility alignment around customer-centricity as opposed to asset-centricity
- 2. Market Restraints
- a. Utility tendency to choose in-house or custom development over buying packaged software
- b. Uncertainty around the impact of deregulation and competition delay project initiation
- c. Apprehension and uncertainty with TCO and near-term ROI from CRM investments
- d. Substantial investments in legacy CIS systems and resistance to deploy new systems
- e. Competing delivery models such as Outsourcing present reduced cost, reduced risk alternative to software licence
- f. Utility Consolidation and attrition reduces the number of market participants
- 3. Market Forecasts
- 1. Market Drivers
- Vendor Profiles
- 1. CRM Suite Vendors
- 2. Billing Vendors
- 3. Analytics Vendors
- 4. Niche Vendors
- Strategic Recommendations
- 1. Strategic Recommendations for Vendors
- 2005 Frost & Sullivan Awards
- 1. Market Leadership Award
- 2. Competitive Strategy Leadership Award
- 3. Product Line Strategy Leadership Award
