Category Archives: CMR

Making Prospecting more Profitable

When you get right down to brass tacks making money means selling something PROFITABLY.   I capitalize the word “profitably” because far too many become enamored of acquiring new customers or up-selling existing ones, but they don’t keep the eye on whether they really are making money or if the cost of goods sold (COGS) means a loss of money.

The only time you should ever lose money on a sale is when you do so consciously.   It may well be that to garner a “marquee” name customer who can be referenced to encourage others in a given industry to buy from you sell something at a loss.  When and if you do lose money on a sale you should do so with eyes wide open aware that it is a sales tool itself to gain more profitable sales.

We’re all here to make money, and if you do not know the cost of making a sale odds are you are losing money.

Tools to keep you informed are many:  from financial software to manage your “books” which include ERP (enterprise resource plannng) and CRM (customer relationship management).    We’ve discussed a few of these tools in this blog — tools aimed at start-ups, mid-size companies all the way to the Fortune 100 — tools which can help you make money profitably if used appropriately.

Which brings me (finally) to the topic of this blog:  software that helps you optimize your CRM sales funnel.

A sales funnel is the concept that to make one sale you must have X number of sales “leads” (potential customers) who become  “suspects” (research shows they could use your offer) lined up that you can target and then winnow them down to “prospects.”  Prospects are qualified businesses who could benefit from your offers — whether they know it or not.  They have budget, they have a need and you can help them meet their own goals.  The key in funnel management is to turn those prospects into customers — and in each step of the sales process of many “suspects” you will find only a few “prospects” and even fewer of them will turn into customers.

Even in the age of social media you still have to identify potential customers and somehow you need to make them aware that you have a service or a product they will find valuable. . .  the methods for reaching them may be changing, but the fundamentals remain the same.

There is a very old saying in the computer industry — about as old as the industry itself.  Surely you have heard the term GIGO (garbage in / garbage out).   You must fill your sales funnel, but if you fill it with lots of names that do not have the potential to be a customer your “funnel management” is poor and your sales profitability will also be low.

To acquire profitable customers (new ones) or even identify what you can up-sell or cross-sell to existing customers you must have a way of identifying qualified leads from the very beginning.     Cisco (the leading communications vendor) credits a company named eTrigue with increasing their SMB (small / medium business) sales appointments by 25% through just such pinpoint targeting of potential customers.

Linda Fassig-Knauer, (a Cisco marketing programs manager)  is the one making the claim about eTrigue and  3Marketeers (advertising, marketing, and demand generation/lead generation) for better lead generation:

“eTrigue Intelligent lead scoring helps us determine which technology or offer the prospect is most interested in discussing with our sales teams and enables us to funnel those leads in a timely manner to our call center, who ultimately sends to our channel partners,” says Fassig-Knauer, “The information in eTrigue lead scoring gives us three times the information so our call center agents are much more prepared before a call. It also greatly increases the number of prospects we can identify as being interested in a solution because the system does not require the customer/prospect to register.”

Salesforce.com CRM users can view active prospects in eTrigue’s demand generation application within Salesforce — making it easy to use for sales reps.    eTrigue won an award from DemandGen for its work with Cisco.

Given the fact that the economy is still slow you need to find a way to do more with less.  Your sales reps need to be more efficient than ever.  Tools like the cloud based SaaS (software as a service) Salesforce.com teamed with a demand generation tool like eTrigue  can fill your funnel with  a higher number of better-qualified leads faster, less expensively and with fewer resources.

You need to identify suspects and then you need to pinpoint target valuable information to them (using CRM with integrated email campaign tools and social media tools as well as the good old fashioned telephone!).  Doing more with less in these times means working smart with inexpensive but highly valuable tools.   Take a cue from Cisco and from Codice Software, who saw a 225% increase in qualified leads, and a 50% increase in actionable sales leads when it used eTrigue.  Response rates went up by 160% versus the same period the prior year.

Another customer, Silver Peak, generated 30% more programs without additional staff.  The cost is much lower than hiring more people — although if you get enough good leads you may need to put more feet on the street!

If you are using Salesforce.com I highly recommend that you take a look at eTrigue and see if automating your sales funnel demand generation makes sense.

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Yada Yada YaData

When it comes to making money with technology a key is knowing who your customers are, what they buy (and why they buy it) — so that you can then offer them the products and services that they need.   It is much easier to sell new products and services to existing customers than to attract a new customer — and a great new technology that allows you to discover unique customer segments one that does micro-segmentation.

Recently Microsoft acquired YaData, a company with a software tool that  provides advertisers with richer targeting capabilities than they could otherwise have — CRM business intelligence.  This software makes money for its users by more pinpoint targeting of what sells and how to offer complimentary offers.

Marketers for years worked with anecdotal information (a successful sale here being exploited in ads, or marketing what the competitors are selling.  With micro-segmentation science is now clearly identifying what sells.

One great thing about YaData is that it includes segment discovery.  Normally data mining (being able to make “what if I did this?” type of questions based on existing data) requires us humans to make the initial assumption.  The problem with this is that our assumptions may be wrong and we waste a lot of time going down a path that is not fruitful.

YaData has behavioral targeting tools within its online advertising platform, which lets marketers provide more focused and relevant advertising.    The benefit includes  better ROI for advertisers, higher yields for publishers and more on target advertising for consumers.  The software discovers and managemes market segments (rather than having people identify the segments as with traditional data mining). YaData uses a search engine, and the system is designed to discover consumer behavior patterns and then sort them into segments.  This actually has a name all its own:  segmentation relationship management (SRM).   The YaData engine can analyze companies’ quantitative databases on the basis of hundreds of variables, in order to create clusters.

Interesting enough, YaData originally received much of its funding from Oracle, only to be sold to Microsoft!  Strange world!

A Belated Congratulations!

Hal Howard has been promoted to corporate vice president of Microsoft Dynamics ERP Research and Development, from general manager.  Hal is an amazing person, who has overseen the four ERP solutions Microsoft acquired years ago Dynamics AX was Axapta, Dynamics GP was Great Plains · Dynamics NAV  was Navision, and Dynamics SL was Solomon. . . and the terrific Microsoft Dynamics CRM which is modeled after Microsoft’s email product, Outlook.

I’m very late on my congrats — as this happened in January.  Oops, sorry it took me so long to notice, Hal!  Still, no one deserves it more.

Speaking of the Dynamics family, there is news on that front from Convergence 2010 Europe.   Both the ERP products and the CRM offer have done very well, and the CRM product has penetrated the Fortune 500 — not its initial target.  It was initially aimed at small and medium sized businesses.   Unlike many CRM platforms, Dynamics does not cost a fortune to implement.  The “big boy” CRM suites cost at least $1 in professional services to integrate it and customize it for every $1 spent on the purchase.

Microsoft Dynamics CRM integrates with Outlook so most people can be productive on day one — it is not a huge learning or integration curve — although it can be customized and integrated if need be.   Now at Convergence 2010 Europe the long awaited cloud (SaaS — software as a service) version is said to be available very soon.

This aims Microsoft Dynamics CRM squarely at Salesforce.com — the leader in SaaS CRM.    Microsoft Dynamics CRM 2011 and Microsoft Dynamics CRM Online will have launch events sometime in January 2011.   The beta of Dynamics CRM 2011 is currently available, having been released in September.  If you want to check it out, now is a perfect opportunity!

Since this blog is about making money (or saving money) with technology — which is the goal of good customer relations facilitated by CRM — definitely take a look at the beta of CRM 2011 and also consider the very attractive  promotional price for Dynamics CRM Online of $34 (31 Euros) per user per month for the first year of service.   This price is available to new customers and will start when Dynamics CRM Online is launched in January. The offer will end on June 30, 2011.

Again, congratulations Hal!

Two Ways to Make Money – Email and Social Media Marketing

The chicken or the egg?

Many Social Media pundits have stated that “email is dead.”    Social media applications like Facebook and Twitter have killed email.

With 500 million users on Facebook it may not be a stretch to understand why all the “Chicken Little’s” are going around the chicken coop yelling “the sky is falling!” on email marketing.   But Chicken Little was wrong, and so are the “experts.”

Email marketing still makes money in a relatively low cost way.   There are numerous online vendors for small and medium size businesses which offer free or low cost email marketing tools that include analytics (so you can see what works and what does not work).  I use MailChimp which promises it is always free for less than 500 email addresses, and I’m quite impressed with its abilities and the staff’s responsiveness.   One great thing about MailChimp (and a competitor, Constant Contact) is that both have recently integrated Social Media into their offers. Constant Contact announced Social Stats which tracks Facebook “Likes,” tweets, Linked In posts and such.  Social media statistics are shown on the email analytics report.  With MailChimp their social sharing tool lets you post your email marketing campaign on your social  networks with one click in your campaign dashboard.  Be careful, though.  Social Network users HATE “sales pitches” and you can destroy your credibility.   Like Constant Contact, MailChimp lets you you can track the activity on those networks, too.

I’ve mentioned Constant Contact and MailChimp which are great for small and medium size companies, as is iContact.  There are even more out there:  AWeber and Vertical Response are two more.

According to Forrester Research, email marketing is growing, not dying. 

Considering that you can email for free (MailChimp) then Forrester’s research should impress you that you can indeed make money via email marketing.  Their research shows that ROI is two to three times higher with email marketing than with any other form of direct marketing.   Two thirds of the marketing executives interviewed concurred that email marketing is the most cost-effective marketing tool they have.

So much for the death knell!

Far too often techno-geeks (and hey, I like to think that I AM one) decry the death of a technology when something new comes along.  Fact is that it takes a while to kill things off.   There are still people using land line telephones, TVs with picture tubes, and even horse buggy whips.   Direct mailers still “snail mail” catalogs.  Billboards still blight our nation’s highways.  Newspapers still get printed.

So, no, email is not dead.   When it comes to making money with technology, email (with opt-in permission so that you are not SPAMMING) is a very efficient way of communicating sales or new offerings to your customers.

Social media is a fantastic communications media, but it is not meant to be a sales tool (well, not directly).  If you pitch a sale on Facebook you are likely to get flamed and slammed.  Social media is all about conversations, and if along the way people come to hear of a great new product, and buy it — terrific!  Yet, Facebook and others are more likely to be a passive, indirect sales channel rather than an immediate one.  The only difference is an entity like Dell Outlet who may tweet a special sale on Twitter — but most of us are not Dell.   You have to be in a unique position to be able to use Twitter or Facebook as a sales platform directly.

Email marketing and social media are not an “either / or” decision of email OR social media for making money.  Email marketing is still a very strong approach for staying in touch with customers and cross-selling and up-selling into your base.  Social media is a wonderful way to stay in touch more often than you can via email (without irritating your base).  Both are complimentary if used properly, and the email marketing tools with their integration efforts can help you do that — as long as you abide by the “rules” of both email marketing and social media and enhance your customer’s experience.  Don’t over stay your welcome in either venue.

The blog is moving.  If you like the blog, please visit us at http://www.it-sme.com/blog .

37% of employees using social media w/o IT permission

We make money or save money by providing value to others in a cost effective manner.  Pretty simple, really.  Technology can streamline the process and make us more efficient at a lower price point — but just as easily technology can be a massive time waster that actually costs us money.

Think of all those apps on Android and the iPhone that are games like Zombie Farm.     Loads of fun, but not exactly productivity enhancers!

Which brings me to a recent blog on the Harvard site.   The article discusses a study by Harvard which shows that employees are using social media including mobile technologies and video to improve how they do their jobs.  These employees are solving your customer and business problems without permission from the information technology (IT) departments:

“In a survey of more than 4,000 U.S. information workers, we found that 37% are using do-it-yourself technologies without IT’s permission. LinkedIn, Google Docs, Smartsheet.com, Facebook, iPads, YouTube, Dropbox, Flipboard — the list is long and growing.”

Forrester Research even gives this trend a name:  Technology Populism.

In a sense all this end user “power” is a good thing — people are not waiting for IT to solve problems.  Technology like Facebook and other social media proves that if companies don’t take advantage of new technologies then customers WILL and this is not always good for companies.   Many a corporation has been blind sided by consumers angry at faulty equipment or mishandled customer “service.”

Yet picture a large company with employees each “doing their own thing” technologically speaking.  Fairly soon will we not have misinformation from our own employees with videos on YouTube giving out erroneous “facts”?   Will we have “stuff everywhere” and a common corporate value proposition (aka the corporate position) totally destroyed and misinterpreted by people who only see part of the picture?

I am reminded of the story of the blind men and the elephant.   In this parable by Sufi Jalaluddin Rumi we are told that a group of blind men touch an elephant  and then must describe the elephant. Each man feels a different part, but only one part and the result that no one describes the elephant as a whole, but each describes the animal differently based on one piece.  One describes an elephant as long and thick like a boa constrictor — he feels the trunk.  Another describes the elephant as long and skinny — he is describing the tail.  Another says the elephant is flat like a stingray — he describes the ear, and so forth.

If our employees are using social media and other technologies to help “describe” our companies and our products / services are they knowledgeable enough of the whole —  the goals and true strengths — to be helping the corporation, or is there wholesale chaos as each is so focused on one small part that they miss the elephant for the tail?

True enough there is no way to put the genie back in the bottle.  Technology, particularly “Web 2.0” with smart phones and social media is here and will be part of our future if we deal with it or ignore it.   Should we allow our employees to go off willy nilly and be empowered to “do their own thing” or should we try to build some rules around this wild west of technology?   My contention is that in the end we will all meet somewhere in the middle.  We cannot truly control all of our employees any more than we can control our customers (or our children).  Yet, we must put some structure into place or we will face wholesale anarchy.  Welcome to the new, brave new, world of technology.

66% of marketers investing in Social Media

66% of marketers plan to invest in social media over the next 12 months.  This is from a study by Alterian.    20% of traditional marketing budgets are being funneled into social media by 40% of the marketers questioned in the study.

When we think of making money with technology our minds may drift to software, but in the very rapidly changing world we inhabit,  Web 2.0, aka “social media” like Facebook, Twitter and even YouTube is becoming a key place to not only find our customers and target them with enhanced customer service or cross-selling (offering them a product or service that compliments what they already buy from you), it is simply the fastest growing way to reach new prospects and stay in touch with your current customers.


CRM Shortcuts – Faster Ways to Customer Relationship Management

Years ago, I ran product management for several  industry specific CRM data warehouses (in other words, business intelligence) for Teradata .  My team worked with large Teradata customers including Wal-Mart, Bell South (now AT&T), Delta and Continental Airlines and other household names who were using Teradata to locate all their customer data and compile it in a system capable of analyzing customer buying trends.  The goal was to increase cross selling and up-selling to existing customers as well as to retain them (at least the profitable ones!).  Data mining (“what if I did X instead of Y”) type analysis could help target new customers as well.

It was interesting, and profitable.  The customers targeted in different market segments (like Retail, Banking, Telecom, Travel, Hospitality and Healthcare) saved money because they did not have to “tweak” generic systems to their industry variances.  It was profitable for Teradata, because a good chunk of development could be spread over multiple customers instead of starting from “scratch” each time.

No CRM solution can be 100% “off the shelf” — even for small businesses.   There are certain things that are unique to the way a company does business.   Yet, the more that can be “out of the box” and functional, the faster the rewards and the easier to get it up and running.

The reason I’m traveling down memory lane is because last week I received an email from Lauren Carlson, a CRM Market Analyst.  She wondered if I’d be interested in blogging on the topic of industry specific CRM applications built around Microsoft Dynamics CRM.

If you’ve read my blog for awhile you may know I am a big fan of Dynamics CRM.   My curiosity was raised so I check out her blog, “Microsoft Dynamics CRM Industry Solutions:  Our 15 Favorites.”  Since there are over 750 industry solutions built around Dynamics CRM this was quite an undertaking!

For easy navigation, the article links each industry to its corresponding solution:

Advertising
Financial Services Non-Profit
Agriculture Healthcare Pharmaceuticals
Automotive Hospitality/Travel Public Sector
Construction Insurance Real Estate
Distribution Legal Retail

If you take a look at any of these solutions for your industry segment heed these warnings:  check out the vendor’s track record for keeping up to date with Dynamics CRM.   Any time you have a third party “adding value” to another vendor’s product they can begin to slip behind in updates.  Suddenly your third party application may not work with newer releases.   Also, in your contract with the third party ask what happens if they go out of business.   Any customer / vendor relationship is a bit like a marriage — so go into your relationship with your eyes wide open, and a pre-nup in hand!

It also behooves you to check some happy users who have been with the third party independent software vendor (ISV) for a few years, to make sure the customer support and “bug fixes” are fast and relatively painless.   Keep in mind that you are paying a premium for the value add of the industry specific application (although you may get a discount on the CRM software) — do your due diligence to determine if the value you will get makes the additional cost of the third party application cost effective for your business.

Social CRM is redefining customer relationships

Have you heard the story about “Dell Hell”?  A few years ago a Dell customer was unhappy with a computer he’d purchased.   In the old days he would have groused to some friends and spent countless frustrating hours on the phone to Dell customer service.    Those days (perhaps unlucky for some vendors) are gone.  Now we live in a social media (Facebook, Linked In, blogging, Twitter, etc.) world where we are no longer “six degrees of separation” from one another — but more right around the internet corner.

In this case the unhappy user wrote a blog and in it he wrote:

I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie. I’m having all kinds of trouble with the hardware: overheats, network doesn’t work, maxes out on CPU usage. It’s a lemon.

Jeff Jarvis, the blogger in question, might have been very surprised by the reaction of his blog.  He hit a nerve and within two days his blog was the topic of a New York Times article. This is not the type of public relations any company wants.

In the “old days” of just a few years ago the company drove the message.  Today with social CRM the customer is driving it as well.  If your customers are not happy they are blogging, tweeting and letting the world know of their unhappiness with your products / services.

The future belongs to those who realize that communication with customers is now a ‘two way street.”   Social CRM (customer relationship management) means that the customer can communicate to the world at large without a multi-million dollar ad campaign.   All you need is a keyboard and an internet connection (and the keyboard may be a virtual one on a smart phone).  People “tweet” their unhappiness instantly.

Businesses need to realize that social media can be their friend (as in Gary Vaynerchuk who spent $15,000 on a  direct marketing mailing which won 200 new customers; $7,500 on a billboard ad which brought in 300 new customers; and spent $0 on a  Twitter “tweet” (social media blast of a few sentences at most) and got 1,800 new customers.

The power of Social CRM is that today’s savvy customers trust their friends (and social media is all about connecting with people who share your interests) more than they trust a paid marketing mailing or billboard.   When Vaynerchuk tweets and someone contacts them he makes sure he contacts them back.  It is a two way conversation.  Granted he is a busy guy and the reply may take a long time — but he DOES respond.  Meanwhile others continue the dialog for him, and the “conversation” (social media is all about conversation and not a one way ad) continues, the audience grows and the control of the message may not lie with the business — but if the business is involved it influences and wins the business.

The way we sell and market is changing — and this change is bringing us back to the “one to one” marketing goal of CRM in a way that big business could never do all on its own.

Dell learned a lot from “Dell Hell,” and you can too.  Realize that if you have a great product people will sit up and take notice.  They will also notice if your product is not so good — and they will tell others of their unhappiness.  The customer relationship is now perhaps the customer / vendor relationship and it is definitely a two way street.

Microsoft, Salesforce.com and Google, OH MY!

One of the things I love most about the high tech industry is that it is never boring! There is always some new kid on the block trying to dethrone the current champ.

Once upon a time IBM was king and they decided to get into the then mom and pop business of the personal computer.  They wanted to do this quickly and cheaply and since, thought IBM, the personal computer business was one reserved for geeks and nerds it would never be that big — what they hey, just partner your way into the space.

So IBM made a deal with a young guy who hadn’t even finished college.  They bought some programming languages from him, and when the deal for an operating system fell through they let this guy scramble to find one to sell to them.  The “guy” of course was Bill Gates, and the little operating system (Microsoft Disk Operating System, aka MS-DOS) was sellable by Gates to others and so soon Microsoft was a major force to behold.

One thing that has always appealed to be about Bill Gates (and I come out of the AT&T UNIX open systems model, so this is almost heresy to say) is his paranoia.  Bill Gates realized what he had done to IBM and that someone could come along and do it to him.  Thus when Xerox invented the GUI (graphical user interface) but did not exploit it, along came Steve Jobs and he introduced the Lisa — a little proprietary PC with a graphical interface.

Bill Gates took notice of the Lisa, and what came next — the Mac!  Before you knew it along comes Microsoft Windows.   Yeah, Windows was clunky and bug ridden, but here we are now at Windows 7 and Bill Gates’ paranoia was right.

Gates was almost always right!

It was Gates’ paranoia that got Microsoft to embed an Internet web browser into the operating system.  They got sued by various governments for monopolistic tendencies for bundling the browser in the operating system — but Gates knew that long term if Microsoft did not have a huge share of the browser world they would eventually lose the operating system business as well.  The Internet would put applications and information in the network (which AT&T foresaw back in 1985 — I was with AT&T Computer Systems back then and the vision their is reality now, but alas not with AT&T in the game).

So what is the latest salvo in the war?   The two behemoths now are Microsoft and Google — and dare we say that Google is already winning the war?   Google has an operating system on cell phones (the Android) which is giving the Apple iPhone a run for it’s money.   Many pundits say that within a few years most of us will be cruising the Internet with our cell phones not our PCs.   With the advent of the iPad (awesome, if you haven’t seen them) your books, keyboards, browsing, etc. can all be done on a little tablet.  For Apple, still proprietary after all these years, the OS (operating system) is the iPhone OS, not the PC OS.  Google’s Android will soon be on iPad clones coming in from China.

Oh yes, the major victors are about to change again.

So why mention Salesforce.com in the headline?  Salesforce.com is a leading CRM (customer relationship management) software vendor.  They use a SaaS (software as a service, not a CD you buy) model and have done very, very well.   Microsoft recently sued Salesforce.com for nine patent infringements.

Now the rumor is that Google may buy Salesforce.com!  Read this article in InfoWorld.

See what I mean about how interesting this industry is?  I swear it is better than watching soap operas!

Automating Product Management (PLM) — Failure?

Product management is a high wire act that requires two skills that seem opposed to each other.  On the one had a product manager must be artistic and innovative — able to spot trends, articulate the value to the market and envision the marketing plan.  On the other had the role is very focused on the minute — ensuring that engineering is day by day fulfilling the requirements.

From identifying problems to be solved by the new product (or solution), to competitive analysis, to product roadmaps and strategy there are definite touch points in product management that have to follow along a project management type timeline.  Pragmatic Marketing has famously articulated the steps common to the process in their Framework.

The functions of the job are normally tracked with Microsoft Office applications including Project, Excel and even PowerPoint and Word.   This means difficulty in keeping the various sources in sync and reinventing the templates for each new release and offer.   The seeming answer to the problem was a new class of software called PLM (product lifecycle management).  Just as ERP (Enterprise Resource Management) automated the back office functions including finances and CRM (customer relationship management) automate interfacing with customers, PLM seemed like a brilliant solution that was desperately in need.

In a nutshell, PLM helps manage the entire lifecycle of a product or service from idea, through market analysis and need analysis and into design and manufacture, then to service and disposal. PLM connects people responsible in each steps as well as tracking necessary data, processes and business systems.  In other words PLM automates and provides a product information backbone for the product development and delivery process.

By helping to automate, streamline and track the process of product development costs are reduced, time to market shortened and over all over sight and tracking greatly improved.  The cost to implement is paid back quickly (if PLM is implemented properly), so this seems like a holy grail for product management.

So why is IBM abandoning ship?

IBM jus sold its PLM offering to Dassault Systèmes (DS).     Sure, IBM says this is a strategic move and that DS is a partner — but since IBM has been a market leader in PLM does IBM see the handwriting on the wall?  Is PLM an idea that just did not make it?

CIMdata,  a PLM Consulting firm, writes that the PLM market grew 6.7% in 2008.   That was the good news.  CIMdata repoted that in 2009 PLM experienced a  12% decline!  Revenue went from $15.96 billion in 2008, to $14.03 billion in 2009. This decline was larger than originally forecasted.

I’m not heralding the death of PLM.  I’m a big proponent.  It helps to standardize the process across product managers and indeed the entire organization.  It is very cost effective.  Still, is the sale of the IBM offering the canary in the coal mine?  (Miners used to bring canaries into the mine with them and if the bird died they knew the air quality was declining, and left before they died themselves).

CIMdata states that the 2009 information is preliminary and reflects currency exchange rates—primarily the euro versus the dollar rather than a real decline in sales.  CIMdata’s preliminary estimates indicate that investments in all sectors experienced declines in 2009 over 2008.

Is that true or is it trying to cast a good light on a bad revenue stream?  CIMdata report (in their press release):

“Comprehensive cPDm dropped to $2.7 billion, a 10.9% decrease. Investments with cPDm Systems Integrators/VARs/Resellers decreased 10.6% to $3.87 billion. Digital Manufacturing investments declined 12.7% to $445 million. Multi-Discipline MCAD dropped 12.4% to $2.57 billion, while investments in Design-Focused MCAD declined 20% to $1.83 billion. The Simulation and Analysis sector of the Mainstream PLM market experienced a more modest decline of 6.4% to reach $2.13 billion in 2009 while Non-Bundled NC had a 19.1% decline to $475 million. The distribution of these investments as components of the full Mainstream PLM market is illustrated in Figure 1.:

Figure 1—2009 Mainstream PLM Market Sector Distributions (Millions)
(Market information represents CIMdata’s estimates)

“Mr. Amann commented, “While 2009 reflected a downturn in new PLM investments, companies retained maintenance and continued to spend on services in support of PLM activities already underway. Continuation of PLM programs indicates that more companies recognize the value that PLM provides in helping them maintain their competitive position during difficult economic times. Hardest hit were small- to medium-sized businesses who tend to be more subject to credit and cash flow issues. Many small companies had to stop their PLM investments while larger enterprises had the resources to sustain programs that were already underway.”

“Ed Miller, CIMdata President stated, “Even in economic downturns, those companies that sustain investments in PLM can become more efficient both by reducing cost and better leveraging existing resources. Importantly, investing in PLM helps position companies to develop and deliver market-leading products as the global economy improves.””

I hope they are right.  Perhaps this is a blip caused by the economic times, but it is something to be aware of if considering PLM.

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