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iport4business.com Inc
5614 Rushing River Drive
Kingwood
Houston
Texas 77345
USA

T: (001) 281 360 0525
E: info@iport4business.com


iport4business Limited
15 Lonmay Place
Panorama Business Village
Glasgow G33 4ER
Scotland
UK

T: (+44) (0)141 771 7242
E: info@iport4business.com

Why choose Web Based or Hosted CRM?

 


With the rise and rise of the hosted CRM model, why should you choose this solution versus a more traditional "on premise" software package?


It would be a brave man (or woman) who suggested that the web based or hosted CRM model was the only show in town these days...but then you'd be forgiven for thinking that it was from all the hype that surrounds it. Many of the industry experts (and plenty that should know better) are suggesting that the death of the packaged, server-based solution is upon us and those who don't move immediately to a SaaS model are tantamount to Luddites. The simple truth though is that the web based delivery mechanism is not for everyone and does not fit every scenario. Organizations need to choose for themselves which is the better option. The CRM function is quite unique in that it lends itself extremely well to a hosted platform - much better than, say, a finance or ERP application. This is because many of the systems needed for CRM (and let's be honest, most CRM solutions are based around a Sales Force Automation concept) actually do better as a stand-alone application. CRM systems track cold-calls and prospects and marketing profiles and campaigns - having to enter all of these details into a finance system would only clog up the works and generally slow matters down. Integrated CRM/ERP solutions work well when the business is largely involved in "farming" a large, well-defined customer base. When the organization is "hunting" new clients however there can be too much unstructured data in the mix to warrant any meaningful integration.


So what are the main criteria and benefits of adopting the hosted model?

 
1. Lower Risk

Implementing any technology is often a high-risk action and not taken lightly. CRM is arguably even higher risk in that when it is implemented the success or failure is very public and the consequences of getting it wrong range from inadequate management information right through to business failure. So the selection and roll-out of what is often a very high-cost software product has certain challenges that are not to be made light of.
 
Enter the web based model: instead of making a purchase after a few demos and being thereafter committed, the hosted CRM solution will usually allow you to have a decent free trial period. Follow this with a live pilot often costing less than $100 for a month or so and you have an extremely low-risk, live trial option that improves success rates substantially.
 
And if your ultimate goal is to install an on-premise version then you can always make sure that the supplier of your choice will support that choice and sell you a server license.
 
2.  Rapid ROI

Bundling software, hardware, systems configuration and integration into one offering that can be configured to a company’s needs reduces implementation time drastically. This translates into faster time-to-customer and a more rapid ROI. Of course, you still need to establish what the criteria are for that ROI - web based CRM solutions are only another form of technology, it still needs people to operate it and processes to follow before it can deliver the benefits. Those who have bad systems or bad people and believe that CRM will solve either or both can't be helped by web based or on-premise CRM solutions.
 
3. Lower Costs

With a hosted solution, an organization can take advantage of sophisticated software running at a centralized, remote location, often on hardware that they could not afford to implement themselves. Hosted solutions can reduce software implementation and customization costs dramatically because of this shared functionality and infrastructure. Initial start-up fees are minimal and the monthly subscription fee is based on the number of users who have access, providing complete transparency of costs and billing. There is some research at present that suggests that over a four year period the on-premise model works out cheaper but in the studies I have seen there was no provision for upgrading hardware and/or software during that period - something that is almost certain to be required.
 
Hosted applications eliminate the need for the installation of software at the client site, thus saving in initial installation and ongoing maintenance. The service provider guarantees performance, reliability and support through service-level agreements with the client. Software maintenance, support and updates as well as infrastructure systems and network monitoring are centrally administered with web based CRM solutions. This frees up technical resources for other projects.
 
4. Higher Added Value

The hosted CRM solution is designed to maximize the value of the application whilst minimizing the risks associated with implementing a traditional, on-premise solution. The figure below depicts how the general risks of using a traditional, licensed offering directly correspond with the general benefits of choosing an on-demand solution.
 
On-Premise
Hosted
Lengthy implementations (six+ months) and slow speed-to-market
Short implementations (10-25 days) and quick speed-to-market
Price ranges in the thousands
Price ranges in the hundreds
Service costs up to 5 times license costs
Service costs no greater than license costs
Relatively high capital investment
Low capital investment
Hardware, support and services not typically included in license cost
Subscription includes all resources (hardware, software and people)
Upgrades and maintenance are separate investments from the license
Upgrades and maintenance are included in the subscription
 

Web based CRM solutions can be an option for any organization – regardless of size - but need to be treated like any other investment in technology. Do your homework on what you need, do the math on what you can afford, do your investigations into the options offered by the vendors...then make the decision that best fits your organization's needs. The truth is though that if you are looking at CRM seriously at present then you must at least have a web based solution on your shopping list, at least for a pilot. Most companies can afford a few hundred dollars for a pilot if it saves them thousands on a badly thought through implementation later.


Take a look at what our clients think of Hosted CRM.

 

 


Chic McSherry
CEO
iport4business.com