Corporate spending on customer service technology will top information technology initiatives over the next two years, says Jupiter Media Metrix. Total U.S. CRM spending will rise from $9.7 billion in 2001 to $16.5 billion in 2006. A total of 26 percent of U.S. businesses expected to spend $500,000 or more on CRM technologies over the next 24 months, Jupiter says. Only 23 percent of companies will spend as much on content management, and just 19 percent will do so for supply chain management, Jupiter says.
"Businesses must realize that investing in CRM technology does not alone ensure that they will be able to implement the organizational changes needed to gain a competitive strength," says David Daniels, Jupiter senior analyst.
The financial services sector is expected to be the single largest market for CRM technology. Spending will increase from $3.1 billion in 2001 to $5.4 billion in 2006, Jupiter says. In a survey last year of 1,527 information technology executives, Jupiter found that 25% of financial services companies plan to spend more than $1.5 million for their operational CRM infrastructure in the next 24 months.
Much of the activity to consolidations within the financial services industry. The mergers have spurred large projects which often require new investments in common systems and platforms, Jupiter reports.
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