Customer-service solutions accounted for 20% of IS budgetsin 1998 in the financial services, discrete manufacturing, and utilities industries, bringing the total expenditure in this market to $1 billion for the year, according to a report released yesterday by Input, a research firm. Input interviewed 127 IS and customer-service managers at U.S. companies with annual revenue ranging from $50 million to $500 million.

Implementation costs for customer-service systems range from $5,000 to $1 million, with 25% of the costs going to software, 24% to services, and 23% to hardware. Once a project is completed, respondents said they spent 29% of the total implementation cost annually on maintaining and re- integrating the systems around software upgrades. Because almost 80% of the respondents already have call centers installed and 61% already use intranet services, the fastest growth area will be self-enabled Web services, Input predicts, with almost 40% of the respondents looking to make that their next customer service project.

The report also examined the correlation between customer service and ERP implementations, and found that 80% are custom integrating the two systems and more than half (54%) are using in-house resources for the integration. Only 40% of the respondents would prefer to receive a customer service system from an ERP vendor rather than a traditional customer-service vendor, such as Remedy or Vantive.