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Today, as a result of high competition among companies engaged in marketing and service providing, Customer Relationship Management (CRM) practices became mandatory for all business organizations. CRM software systems are specially customized programs for better customer relationship management; they automate all company procedures like customer tacking, contacting and serving customers. At their introduction, CRM software programs are standard packages, with all wanted and unwanted CRM applications.

One of the most important benefits that has been instrumental in the growth of ‘on-demand CRM solutions’, is the cost. While more traditional forms of software will cost you on a yearly basis with costs running up to millions of dollars up front, the on demand CRM software comes with a monthly subscription charge per user.

On-demand CRM solutions have their place in the CRM market. However, the benefits they seem to offer at first glance need careful investigation. While on-demand CRM solutions may be faster to get up and running than on-site CRM software, they can often cost more in the long term. In some companies, their investment in on-demand CRM solutions has added up to a higher total cost of ownership - especially when users get tied into contracts.

On-demand solutions frequently have limited functionality, and are notoriously difficult (which usually means expensive!) to integrate with other applications. So, although on-demand CRM solutions may seem cheap to start with, the price may not always turn out to be as attractive as it first appeared. Paul Petersen, Senior Director of the GoldMine Business Unit for FrontRange Solutions, recently stated “We talk with many companies that learn too late of the limitations of on-demand CRM”. He goes on to say “On the surface, on-demand CRM is compelling and seems to offer incredible benefits. Yet, an increasing number of organizations that tried on-demand applications have returned to an on-premise solution, and we want customers and partners to be as informed as possible about the options for cost-effective and mission-critical CRM.”

In the right circumstances, on-demand CRM can certainly be the right solution for some businesses. For example, SageCRM.com can be an ideal CRM starting point for some small and mid-sized companies, enabling them to share and manage customer information across all departments. It’s often a quick and easy fit, and can go a long way in installing a “CRM culture” within a growing business. What’s more, as these businesses expand, it’s straightforward to transfer the SageCRM.com database to an in-house CRM system (and migration to on-site Sage CRM is seamless). Similarly Microsoft CRM is an on-demand (hosted) CRM solution built with the same code base as Microsoft Dynamics CRM Professional Edition. It has a variety of options to fit business needs, with the ability to easily migrate data as businesses evolve.

Tags: Computers

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