On-demand solutions offer the advantage of being able to implement quickly and easily. Because they are off-the-shelf and on-demand they can be up and running in as little as an hour. For businesses that are hesitant to invest in CRM, on-demand also is a way to avoid the cash outlay required for an in-house CRM alternative. Thus, it appears more affordable because on-demand solutions don’t require a specialized IT resource person and because you can pay for these web-based services monthly. In a sense, on-demand CRM offerings are like buying a pre-cut suit off the rack – it’s easy, it’s seemingly inexpensive, and it’s quick.
At first glance, on-premise solutions are all that on-demand solutions are not – they require an up-front investment, they require more IT attention from you or your supplier, and they take longer to install. On-premise solutions are the tailored suits of CRM – more expensive material, the fit requires a tailor, and the tailoring takes time. Deciding between the two alternatives should be easy.
But getting the most out of a CRM solution is not that simple. Unless you’re only looking for simple contact management, the big benefits of a CRM solution lie in integrating the system with your other business processes – e.g. using your prospect and customer information to drive your marketing programs, customer service processes, or your customer supply chain. On-demand CRM solutions just can’t provide that level of integration or required customization. Even if such integration were possible, most business owners would be hesitant to tie all of their business processes into a system or data that resides across the Internet. Reliable, fault-free Internet access can be elusive.
The economics can be equally elusive. Many businesses are attracted to low monthly costs for on-demand solutions only to find that cumulative costs, over time, surpass the costs of an on-premise systems. By the time they realize this, they are often locked into a long term contract. Rob Bois, a senior research analyst for AMR Research, a company that focuses on applying technology to business processes thinks there’s an “expectation gap” with on-demand CRM. He thinks that many companies believe the on-demand approach is like flipping a switch – the power just comes on. But that’s not the case and it’s one reason why analysts predict on-demand solutions will remain under 15% of the market.
If you want to learn more about to decide if a on premise or hosted (software as a service (SAAS) solution is right for your organization give us a call at 858-541-1820 or send us an email at email@example.com
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