What are advantages of hosted or on-demand CRM vs. on-premise and vice versa?
In the last few years, the market for on-demand CRM has soared particularly among small and mid-sized companies, largely because of fears about the expense and complexity of large-scale on-premise CRM implementations. And indeed, on-demand CRM is often a good choice for companies that want to implement standard CRM processes, are able to use out-of-the-box data structures, with little or no internal IT support, and don’t require complex or real-time integration with back office systems.
However, on-demand CRM software is not always as simple as the vendors would have you believe. For instance, customization can be problematic and hosted CRM vendors’ API tools cannot provide the degree of integration that is possible with on-site applications. Getting a hosted CRM system working shouldn’t take as long as a traditional software package, but larger and more complex rollouts can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons. As a result, AMR Research predicts that even by 2009, hosted CRM applications will account for only 12 percent of the total U.S. CRM market.
Susannah Patton and Tom Wailgum