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Hosted software has been around since the 1990s, hundreds of ASPs sprang up to offer customers enterprise software hosted over the Internet. But when the Internet bubble burst, many ASPs went down, leaving customers in the dark. But Salesforce.com focused on the need for sales-force automation, refined its technology and began racking up sales among small and mid-size businesses that needed the functionality they could offer but couldn't afford the multimillion-dollar price that accompanied full-fledged CRM implementations. As the number of expensive failures in the traditional on-premise CRM space grew, so did interest in expanding the hosted model beyond simple sales-force automation to a full-fledged system that could give enterprises a idealistic view of their customers and allow them to better target their marketing, sales and customer-service efforts.
In the last few years, the market for on-demand CRM has been driven up by small and mid-sized businesses (especially those who don’t already have a well-established CRM process) because of fears about the cost and complexity of large-scale on-premise CRM implementations. Of course, on-demand CRM is often a good choice for companies that wants to implement standard CRM processes, are able to use out-of-the-box data structures, with little or no internal IT support, and don’t require complex or real-time integration with back office systems.
However, on-demand CRM software is not always as simple as the vendors would have you believe. For example, customization can be problematic and hosted CRM vendors’ API tools cannot provide the amount of integration that is possible with on-site applications. Getting a hosted CRM system working shouldn’t take as long as a traditional software package, but larger and more complex operations can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons.
There are a couple of things that is to be considering when figuring out between hosted or on-demand versus on-premise CRM. One of the biggest mistakes is deciding on pricing first. You have to have a strategic plan for what you want from your CRM initiatively. Also you might want to see if your company is stable, with little growth or change, then a hosted CRM solution may be a better choice compare to where as your company is changing rapidly with high growth, then on-premise might be a better solution. There are a lot of details that you would want to go over such as define your processes, figure out what your requirements are, decide who will execute on it, and then you can go through the costs of each model that actually meets your requirements and make a decision. Companies seeking to adopt established, standard practices on a particular function like sales-force automation are more likely to benefit from a hosted solution, while those seeking to implement highly customized customer-management processes would more likely value a flexible onsite option.
All and all, there are strengths and weaknesses for both hosted/on-demand versus on-premise CRM. Picking a CRM really depends on what your company needs and how will the CRM meet your companies’ future expectations.
About the author:
John Wong has an interest in CRM softwares topics. You may contact him at tekmox@gmail.com. |
