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"In the market for a CRM? This white paper outlines the general
benefits and drawbacks of hosted vs. on-premise CRMs and lists the basic features to look
for in your hosted solution. With an up-to-date overview of the CRM market and a rundown
of the general costs of various CRMs today, you'll be prepared to start looking for your
new solution immediately. "
How to Choose the Right Hosted CRM Solution for You
Hosted CRM Solution
is also known as :
Hosted CRM Software
Customer Relationship Management Solutions
Web Hosted CRM
Best Hosted CRM
Hosted CRM Small Business
Hosted CRM Comparison,
Web Based Hosted CRM,
Hosted CRM Providers,
Hosted CRM Services,
Hosted CRM System,
Hosted CRM Investment,
Hosted CRM Vendors,
Analyze CRM Process,
Apply CRM Process,
Automate CRM Applications,
Building Customer Loyalty,
Business CRM Microsoft Solution,
Business CRM Software,
Learn what a Hosted CRM system can do for you and understand what issues you
should consider during your decision-making process.
Hosted CRM Buyer's Guide
Today's Customer Relationship Management (CRM) solutions aim to
the personalized customer service provided by local mom- and- pop shops of yore
except with high-tech-analytics capabilities, collaborative platforms and
automated processes. By gathering information from multiple data sources and
storing it in a centralized location, a hosted CRM solution provides a
holistic view of a customer in real time. Armed with this insight, a
company's management, sales and service people can better generate leads,
target top customers, manage marketing campaigns, drive sales and boost
The bottom line with hosted CRM solutions is that they
provide an efficient way for businesses to bolster customer loyalty while
reducing operating costs and increasing overall profitability. In this
Buyer's Guide, you will find details on what to look for, how to buy, what
you can expect to pay, and how to derive the most value from your hosted CRM
A CRM solution is a software
application that allows users to access important data, ranging from a
customer's account balance to past purchases, through a single source in real
time. Beneficial to countless departments within a business, most CRM
solutions include these primary applications:
- Sales Force Automation:
Empowers sales representatives with immediate insight into customer buying
patterns; helps managers better forecast future sales; allows companies to
adjust production cycles based on real-time sales figures; enables accurate
assessment of the sales team's performance.
- Marketing: Helps marketing
executives better manage and design campaigns, adjust budgets, link revenue
to specific advertising initiatives, create targeted campaigns, and assess
- Service and Support: Enables businesses to provide prompt
customer service, accurate product support, call-center service and proactive
IT help-desk assistance.
- Analytics: Generates real-time, graphical and
customized reports so that businesses can better allocate resources, gain
strategic insights and optimize enterprise performance.
There are two primary types of CRM solutions for
businesses: hosted CRM and on-premise CRM. Hosted CRM (also known as
on-demand CRM') entails a company outsourcing a portion or all of its CRM
functions to an ASP (application service provider). Unlike licensed
on-premise CRM software, hosted CRM tools are payable on a monthly basis
without requiring complex implementations or the assistance of an in-house IT
team. The result is a cost-effective solution that promises to deliver a
quick ROI (return on investment), while freeing a company to focus on its
In fact, according to a study from Nucleus Research, more
than 80 percent of companies that outsourced CRM achieved a positive ROI. The
study reported that problems with the on-premise CRM model include high
software and consulting costs, ineffective user adoption, and poor
But for all its promises of immediate payback, the hosted CRM
model does have its shortcomings. For one thing, whereas on-premise CRM
solutions can be tailored to the particular needs of an organization, on demand
solutions don't allow for the same degree of customization. What's more,
on-premise solutions are easier to integrate into a company's existing
business processes and applications.
For small- to medium-size businesses,
however, the price is right when it comes to hosted CRM tools. By paying per
user per month, a company can gain access to a sophisticated application in a
mere 30 days without having to burden its IT department or cut of its cash flow. And of particularly good news to growing companies is the fact that
today's on-demand CRM solutions are highly scalable and easy to upgrade.
According to technology market analysts at Forrester, the
CRM market is poised to hit nearly $74 billion in sales in 2007. CRM
applications represent about $21 billion of that market, with services making
up the rest. With so much money to be made, it's no surprise the CRM
landscape features scores of players, from up-and-comers to industry
stalwarts. Key vendors include Amdocs, PeopleSoft, Salesforce.com and Siebel
Systems, to name a few.
Recently, there has been significant consolidation
among vendors, including M2M Holdings' acquisition of Onyx Software, Oracle's
gobbling up of Siebel Systems and CDC's purchase of Pivotal. And the
competition for midmarket dominance continues. But, with the CRM market for
2007 predicted to grow 11 percent, a handful of hosted vendors are surfacing
as clear winners, according to industry analysts.
Salesforce.com is one such
market leader. An early entrant in the on demand market, the company boasts a
subscription-based online delivery model that is ideally suited to small- and
medium-size businesses especially those with limited funds and IT
resources. Services are delivered in a very modular manner and, thanks to
Salesforce.com's on demand Apex platform, its CRM application can be up and
running in weeks or days a fraction of the time typically required by
traditional client/server CRM software.
Oracle-owned Siebel and its CRM On
Demand product promises to automate, simplify, and manage sales information;
provide better customer service across all customer touch points with a
pre-built contact center; and help marketing managers allocate funds
Another popular midmarket player is NetSuite, which aims to
deliver a 360-degree view of the customer. Highlights of the company's
flagship product include an order management system that lets salespeople
take real orders from customers, as well as the ability to access customer
purchase histories without requiring complex integrations with an accounting
And last year, RightNow Technologies acquired on-demand CRM
provider Salesnet a purchase engineered to leverage Salesnet's sales work
flow automation expertise. Today, RightNow offers both hosted and on-premise
CRM solutions. By hosting and managing a CRM application on behalf of a
customer, RightNow delivers faster time-to benefit t, greater scalability, lower
cost of ownership and reduced project risk.
According to a new study from
market research firm ABI Research, the global market for hosted services will
exceed $34 billion in 2012, of which the North American portion (where most
of the cable operators pursuing the small business market are located) will
amount to $11.6 billion.
Another market research company, In-Stat,
believes that strong growth in hosted VoIP will remain steady and will exceed
3 million seats in service by 2010. There are currently about 400,000 seats
in service in the U.S., the majority in the small and medium-sized market.
There's good reason the on-demand model has
taken the IT world by storm in recent years. With its promises of reduced
costs and easy deployment, today's hosted CRM solutions offer countless benefits to companies ranging from
fledgling businesses to international
Here are just a few of the biggest benefits:
Deployment: Hosted CRM implementations can take as little as a few days and
rarely exceed three months. What's more, with an on-demand solution,
companies need not invest up-front time in the planning of hardware and
software purchases. An on premise implementation, on the other hand, can
easily exceed 12 months an awfully long time to wait to get into the CRM
- Easy Upgrades: On-premise solutions often lay claim to a
painstakingly slow product development life cycle, whereas on demand
applications can accommodate the instant deployment of new versions.
Furthermore, product enhancements and upgrades can occur instantaneously, and
hosted CRM applications can be configured and reconfigured quickly.
- Reduced Costs: Forget about purchasing costly hardware and ramping up your IT
team with highly paid software experts. With hosted CRM, there's no hardware
to purchase, servers to install or techies to recruit.
Safeguards: If today's hosted CRM vendors want to survive, keeping their
datacenter security up to par is paramount. End users, on the other hand,
have been known to skip software upgrades and poorly manage their employees'
desktop installations all the more reason to trust global industry leaders
with the security of your data.
For some companies, a
step-by-step strategy is the most cost-effective and efficient path to a
hosted CRM deployment. Fortunately, most CRM solutions are modular enough to
accommodate such a piecemeal approach. Sales-force automation is typically
the most popular application of CRM, followed by analytics and service. The
features found in each of these categories should include all of the
- Lead management
- Territory and quota management
- Partner management
- Opportunity management and forecasting
- Sales methodology implementation
- Feedback management
- Scheduled reports
- Data quality management
- Proactive alerts
- Role-based analytics
- Comprehensive library of pre-built
Service and Support
- Email response management
- Web and voice
- Agent productivity
While the price of an
on-premise CRM solution can easily run upwards of $500 per seat, companies
can subscribe to an on-demand tool for as little as $50 per user, per month.
But a modest up-front fee isn't the only factor helping companies save their
hard-earned dollars on a CRM deployment. A study by Gartner Inc., which
looked at the total cost of ownership of enterprise applications, found that
80 percent of the cost of deploying and maintaining on-premise applications
is not due to licensing, but to additional costs related to hardware and
administration of the software.
But that's not all. According to Gartner
Inc., through 2010, on-demand CRM will provide as much as 10 to 13 percent
lower five-year total cost of ownership than on-premise software for
moderately complex CRM deployments.
Whether your view is to the long- or
short-term, there are a number of areas where an on-demand CRM solution can
cut costs. These include:
- Front-end Expenses: Thanks to the CRM solution's
on-demand model, there's simply no need to purchase hardware, software or
added IT infrastructure to accommodate the introduction of CRM technology.
- Manpower: Implementing and maintaining a CRM solution requires the ongoing
expertise of highly qualified IT professionals. By turning to an ASP,
however, a company can save thousands of dollars in IT manpower and help desk
- Customization Mania: Although criticized for its one-size-fits all
approach to CRM, a standard on-demand CRM tool can spare a company the price
tag and hassles that often accompany application customization.
- Security: A CRM solution doesn't have to reside within a company's walls to
be safe. Rather, today's hosted CRM solution providers go to great lengths to
safeguard their clients' data. And that's good news to businesses unwilling
to invest in costly security controls and experts.
What to ask before you buy.
Before talking to a
CRM vendor, you will need to know the following information about your
- How many employees are in your organization?
your company be in growth mode over the next five years?
- How quickly are
you looking to deploy a CRM solution?
- What are your total CRM project cost
- Do you have the in-house IT resources to support an on premise
- What degree of customization are you expecting from a CRM
- Do you have the safeguards in place to securely manage in house datacenters?
- How could you benefit from an in-depth view of
your sales pipeline?
- How could your salespeople be better managing
- How can you improve your customer-support services
- How easily can you generate forecasting reports?
- How effectively are you targeting top customers?
- How effectively are you
allocating your people, budgets and resources?
- How quickly are you
responding to customer inquiries?
and maintaining a hosted CRM solution may be a relatively hassle-free
endeavor, but it's not the end of the road. Making a technology available is
one thing; driving adoption of the solution among employees and creating
processes to support its capabilities is a whole other ball game.
Hickernell, an Info-Tech Research Group senior analyst: "In the end, it's
about process. If you don't have your sales, your service, your marketing
processes in place, I don't care if the software is on-demand or if the
software is on-premise, it's not going to be utilized fully."
failing to get the most from your CRM investment is wasted money. But the
real bottom line is that, in today's highly competitive marketplace,
companies simply can't afford to alienate their customers. While American
businesses experience between 20 and 50 percent customer turnover annually,
it costs about five times as much to attract a new customer as it costs to
keep an old one. Maintaining customer loyalty through a hosted CRM solution
can mean the difference between success and failure.
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Phone: 415-318-7200 / Fax:415-318-7219