Things You Need to Know About CRM Hosted Vs. On-premise

Our economic environment is now facing a make or break situation. The use of CRM is more important to get help in making more money for the company. Use of CRM was proven effective; there will be no question on that. However, the big question was raised, Which will be the most effective? Hosted or non –premise CRM?

This question still remains a question. There are a lot of things that need to be considered. According to Laef Olson, RightNow Technologies Inc chief information Officer, “I don’t believe that the primary decision is hosted vs. non-premise. The primary decision is what CRM package drives the best business value.”

Precisely, knowing what particular CRM packages for your business is the most important thing to be addressed. The question should be, How will CRM can work for you? How would you like the work to be done?

For you to get answer for these questions, please be aware that CRM functions have three categories: we have operational, analytical and collaborative. “Each of them is biased towards particular deployment model” according to Yacine Filali, a business analyst from Winbond Electronics Corporation America.

“Operational CRM’s are often integrated with the company’s public Web site, Wherever it may be but are usually hosted. Analytical CRM’s are often integrated with business – intelligence engines and are very often in-house, along with the ERP (enterprise resource planning) infrastructure. Open-source and some commercial solutions will very often try to integrate the analytical piece with the operational piece, with mostly bad results. Meanwhile, “The collaborative CRM will sometimes include channel management, but most often is hosted in-house. “Corporate paranoia is a big factor in deciding where analytical and collaborative CRMs are hosted, even if physical security of the servers at most hosting companies is far greater than that of most businesses' in-house servers.” Filali further explained.

Knowing more about CRM

In getting a CRM, you’ve got two choices: it’s either you buy it or you rent it. If you want total ownership, then on-premise CRM is what you need. Buy it, make use of it according to your preference and be in charge of you’re company. The downside is, there’s confusion in ownership. In the licensing agreement, there are things that you cannot do even if you’ve paid for it. It’s not like just another facility that you can sell or lend for whatever reason you may want to do so. It’s like ownership without having the right of having your own decision to something that belongs to you.

On the other hand, with Hosted CRM you can pay to use it but can never be yours. You can use it as long as you’re paying for the right to use it. On the brighter side, you don’t have to be bothered of thinking of the maintenance as well as upgrading the service. You may not need a lot of IT staff and buy hardware or software to support the program.

Let’s hear what they have to say about:

Advantages of Hosted CRM

William Band

· According to William Band, Vice president and principal analyst of CRM applications at Forrester Research Inc, that in comparing on-premise to SaaS, “You must be aware that SaaS solutions offer faster time to value; frequent, automatic updates; independence from IT; and good usability.”

RightNow’s Laef Olson

· Stated that in “Putting the differences of hosted-CRM packages aside, some of a basic, hosted solution include specialized operational-management capability, inherent disaster recovery, ease of implementation, fully managed and environment changes, specialized security management and lower operating cost.”

Bruce Francis

· According to Bruce Francis, vice president of corporate strategy at Salesforce.com Inc. Hosted applications had a rapid rise and fall in the past decade, they still implemented all the flaws of traditional client-server apps: such as (a) expensive and time consuming to implement; (b) costly and difficult to maintain; (c) impossible to upgrade without breaking valuable customizations. This all has changed with software as a service.

Mini Peiris

· For small and midsized companies with limited IT staff and resources, hosted CRM is often the only choice. “All you need is an Internet connection and a Web browser, which translates to tremendous cost savings on both hardware and IT personnel to maintain the systems,” “In addition, on-demand solutions offer a level of uptime, security and scalability that midmarket companies would otherwise not have the resources to deploy themselves.”

Disadvantages of Hosted CRM

William Band

· “CRM professionals worry about the true TCO (total cost of ownership) for SaaS, feel challenged by integration and customization issues, have qualms about data security and find SaaS pricing models and contracts confusing,”

· “Additional risks for SaaS solutions include loss of control, weaker integration, limited virtualization and more restricted customization capabilities compared to on-premise solutions.”

· “Look at your contract before you leap; some contracts make it hard to leave or even to turn them off.”

SugarCRM’s Harrick

• “For companies who have deep customization and integration requirements, on-demand CRM may not always be the best approach. We have seen larger companies choose Sugar On-Site, instead of Sugar OnDemand, because they have more control over application customization, performance and data security,”

Advantages of On-Premise CRM

William Band

• “On-premise solutions offer stronger integration benefits than SaaS, resulting in enhanced integration with other IT and operational systems, especially when real-time integration is important,”

SugarCRM’s Harrick

• “On-premise or on-site CRM can deliver more control around customization and integration than on-demand CRM. If a company wants to make substantial changes to the data model of the application, they will want to go on-site, most likely because the application is open and modifiable,”

Laef Olson

• “For those IT shops that haven’t reached a level of maturity around service-delivery management, on-premise CRM offers the security of knowing that the infrastructure is under direct company control and changes and risk management can be handled locally,”

Chris Caputo (director of information systems at Juggernaut Software)

• “An outright purchase may result in significant savings over a 3- to 5-year term.

Disadvantages of On-Premise

William Band

• “On-premise deployments typically require greater up-front costs, especially when comparing license fees with subscription fees. On-premise deployments typically also require hardware maintenance, upgrades and support costs on top of license fees, while most SaaS deployments bundle these into the subscription fees,”
• “On-premise solutions have risks, primarily implementation risks, due to deployment complexities, training needs and support issues,”

Salesforce.com Francis

• “Complexity around customization and integration, complicated upgrades, difficult user interfaces for end users and slow time to value — all resulting in a high-risk investment — are major drawbacks,”

Getting Started

“I would very strongly recommend that you run a pilot program to test how things work before committing,” according to Flyn Penoyer, telesales guru at Penoyer Communications. “It is crucial that you document thoroughly the user process for handling the systems and compare how that process is executed on the various programs you decide to consider. Have the vendor do a demo using your task/action script for the user's handling of the product so that you can see exactly what is necessary for each task and the complexity of execution.”

Let it be known that hosted and on-premise can be both beneficial depending on you’re needs. Let it be not a question which is more effective and beneficial because both can be effective and reliable. It’s a matter of making the right choice for your needs. Before jumping into which one you should get, proper identification of you’re need stands as the most crucial factor before you make a decision.

To know more, visit http://www.pegasyssoft.com, Pegasys is a Global provider of professional IT Services. We offer the best services at a cost effective pricing resulting in quick Return On Investment(ROI). Our Services include CRM Services, Sales Effectiveness Solutions, E-Commerce Solutions, Smart Assistant Services, Custom Software Development and much more.