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. | 
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