CRM's open door in North Asia
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Report: James Smith (

The patchiness of CRM take-up in North Asia is a blessing in disguise for businesses looking to retain their customers and increase their lifetime value. Hong Kong's densely-concentrated market of wealthy consumers represents an implementation laboratory for many of the latest e-business software applications.

Whilst CRM is still in its infancy stages for the majority of SMEs, larger organizations have been focused on customer service for some time now. The principal hinderance to CRM implementation for North Asia's SMEs has hitherto been cost - both the cost of the solution, and the opportunity cost of implementation. But things are changing.

On the one hand the cost of applications continues to fall - witness Aspect Communications' ( ) moves to reduce the overall cost of ownership - and perhaps more crucially, the danger of doing nothing and watching your customers being poached by incresingly nimble competition is more widely appreciated than once it was. The effect has been that SMEs are placing more emphasis on customer service. The hype surrounding the industry has inevitably raised expectations of just how well the industry is set to perform. Now, all that's left is for organizations to wake up and act on the opportunities abound strategically.

Mainland China has been rapidly building up its IT capabilities and infrastructure, with a lot of hot money being sunk into customer service infrastructure. Until recently the focus of Chinese business was the acquisition of customers. Now, however, more and more businesses in China are looking to reap greater returns by focusing upon increasing the value of their existing customers. So the door is now open to the CRM vendors.

Beware strangers bearing gifts

An unknown variable hinges on the maturity of different elements of the North Asian economy. Though the openness of Hong Kong's economic infrastructure is a compelling force to jump-start the spirit of competitiveness, there is still often a lack of clarity about the stepping stones to compelling customer relationships. Hong Kong is known for its versatility, and its role as a gateway for capital and skills into the North Asian market is well understood. With the increased emphasis on the web, deregulation across various industries and integrated supply-chain, Hong Kong's e-business applications potential is immense significant in its own right, and not just as an extension of mainland China.

According to Frost & Sullivan, CRM revenue in Asia Pacific overall is forecast to be worth US$1 billion come 2003. Hong Kong itself boasts the highest tele-density in the world, with CRM installations within the telecoms sector last year accounting for 44 per cent of total CRM sales. By 2005, the biggest market opportunity for end-user implementations is expected to be found in the banking and finance sector.

Asia will be forced to re-invent their customer-focus strategies to compete on a level-playing field once greater competition sets in with China's entry into WTO. There is then an urgency to acquire complete information on customers and provide absolute customer service standards. These standards need to be transparent and the solutions interoperable with legacy systems in order to make that shift from a product economy to a customer economy. From a broader perspective, one might see CRM merging with ERP and Supply-Chain Management as a result.

Organizations in Hong Kong need to keep working on the industry's potential by remaining competitive and reducing cost and increasing efficiency and productivity. E-CRM is taking off, slowly but surely with a great potential to succeed but it needs more time as this field is still relatively new. Another potential for Hong Kong is its CRM software market which is expected to be worth US$232.8 million by 2007 according to Frost & Sullivan.

CRM: the door swings both ways

Those prepared to adopt a wait and see approach look set to be the biggest losers. Although some businesses may be prepared to wait, their customers won't. There is no better time to gear up and go head-on with competition than now. Keeping ahead of the learning curve through peer-to-peer networking, and analysis of the latest software solutions are key drivers for adding value to the customer-savvy enterprise.


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