CRM On-Demand Is In Demand

Posted by CRM Guru on Saturday, February 18th 2006

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18
Feb

Over the past year, there has been another dramatic shift in the CRM Marketplace. On-Demand CRM solutions have gained significant market share in the SMB and Enterprise space led by Salesforce.com.

There are many factors involved in this significant shift from the traditional software purchase and implementation to the On-Demand offerings from companies like Salesforce.com, Microsoft, and Siebel. For the larger enterprise user, there may be implementation fatigue, from the long, drawn-out and expensive projects from the late 1990’s and early 2000’s. For the small and mid-market business, the elimination of the traditional software purchase and the need for less internal resources and infrastructure is very attractive. The increased bandwidth and dependability of the “pipe” and increased speed have also contributed to the acceptance of the On-Demand CRM Solutions.

Advantages of On-Demand CRM
The initial hesitancy for On-Demand Solutions when they were introduced in the marketplace has been replaced with a general acceptance and understanding of the advantages of this type of solution. The advantages included:

Replacement of large Software Purchase with a monthly subscription charge – The On-Demand model is based on a monthly subscription charge per user. This allows a company to extend the software component cost of a CRM implementation over a period of time and eliminates the yearly support & maintenance fees of a traditional software product.

Flexible Pricing, Licensing, and Scalability – Some of the On-Demand vendors provide flexible pricing, allowing you to choose and pay for the functionality and services you need. You pay for the number of licenses you need with the flexibility of added users when necessary. The leading On-Demand CRM vendors have invested in significant infrastructure and have the ability to provide services to enterprise organizations.

Decrease in Hardware Requirements and Support – With a traditional CRM software implementation, you need to make sure you have the appropriate servers, workstations, operating systems, database, and network infrastructure to properly run and support your system. With an On-Demand solution, the costs and support are significantly reduced. As long as you have Internet access, you are able to use your CRM service.

Decrease in IT Support Staff – You need an IT Support Staff with various skills to maintain a CRM Software System. As noted above, as long as you have Internet access, you are able to access and use your On-Demand CRM system. Your IT support costs are reduced significantly.

Elimination of Costly Upgrade Charges – With a traditional CRM software solution, you can expect a major software upgrade every 12-18 months. Depending on your existing solution, the upgrade can be time consuming and expensive. The On-Demand Solutions provide the upgrades as part of your monthly service fee.

Remote Management – The beauty of an On-Demand solution is access from anywhere at anytime as long as you have Internet access. This allows the System Manager to remotely monitor and support the system.

Faster and Easier Deployment – On-Demand solutions eliminates the need to load software on any computer, allowing for faster and easier deployment. It allows the end-users to concentrate on the solution.

Good Solution for Distributed Offices – Distributed offices and users adds complexity to a typical CRM software solution. This is eliminated with an On-Demand solution, giving every office and every user access around the world to the same database.

General ease of use – On-Demand Solutions have been designed specifically for the Internet, providing general ease of use and navigation.

Availability of Good Mobile Solutions – With the improvement and reliability of wireless technology, you have access to excellent mobile solutions for On-Demand services using Blackberry® or Palm® Treo™.

Security and Backup Services – In order to provide a secure and reliable service offering, an On-Demand vendor has to provide the highest level of security and data back-up services. In some cases, you may find their service in these two areas superior to the security and back-up system in your own organization.

On-line Training – As part of the monthly service fee, some On-Demand vendors provide free on-line training. This can be a significant cost saving compared to the traditional classroom training.

Significant Third Party Add-ons and Web Services – As the On-Demand offerings continue to grow and gain acceptance by companies, significant third party add-on offerings have become available to meet various needs including integration, extended sales methodologies, and email fulfillment, to name a few.

Integration Capabilities – Some of the On-Demand Solutions are highly customizable and easily integrated to existing corporate backend systems.

Summary
It has take a few years for On-Demand CRM Solutions to find it’s place and acceptance in the marketplace. The improvement and reliability of the Internet, faster deployment, easier support, improvement in the functionality, and integration capabilities have fueled rapid growth. But, hold on, this is just the beginning!

4 Comments Already

David Elkington Said,

August 11th, 2006 @9:24 am

On-Demand software and services have the potential of changing the way software is used and implemented. I believe in this fact so much that I founded and am now the CEO of InsideSales.com, a provider of an on-demand CRM application with integrated dialers and telephony tools. Despite all of the advantages that come with on-demand solutions, on-demand software faces one of the same major challenges as does premise based solutions - executive driven implementations.

What I mean by this, is that unless an implementation of a CRM application (or almost any new software implementation) is dictated, driven and defined from the executive level of an organization, it is likely to fail. Why is this? – No software will fit your needs exactly (neither premise based nor on-demand). When this happens (and it always will), the only way to save an implementation is to work around the problem. There are usually ways to make a solution do what you want, just not necessarily the way you want it to do it. However, at this same point, the person who just selected the produce or service is looking like they made a mistake. What’s more, these issues in the software will often become the scapegoat for employee underperformance. At this point, the organization will usually either fight the product of service and not accept a different way if doing things for a while then scrap it, or just scrap the implementation at that point.

The solution for this is to have complete buy off of the product or service from the executive level of the organization. This will convey to the company that a persons job is not at risk for having selected the ‘wrong’ solution, and that will send the message to the employees that the product or solution will not be an accepted excuse for underperformance.

What I am saying is nothing new. However, there is sometimes a cloud of excitement around the ‘on-demand’ solutions; though they do offer to make many things to make an implementation go more smoothly. They are not the fix to all implementation problems.
On demand solution are not impervious to all the problems premise based solutions experience.

Iportinstant Said,

December 13th, 2006 @12:35 pm

Why should a small business implement a Customer Relationship Management (CRM) solution?

Customer Relationship Management (CRM) has a reputation for being expensive and hard to align with organizational goals. The horror stories of Enterprise level project failing miserably are legion. However, small and medium-sized enterprises (SMEs) are now waking up to the benefits of CRM technology, as they increasingly recognize that the technology can make a tangible difference to their bottom line.

CRM, despite the highly publicized failures, has enabled large organizations to serve customers more intelligently, develop markets and change the way they do business delivering levels of service that were previously unthinkable. As markets become more open and the use of technology and the internet opens up, the larger companies are increasingly able to compete with small business at a service and price-point level. SMEs therefore need to become more customer focused in order to complete with larger businesses.

A recent 1000-person customer relationship survey, conducted by Sage, indicated that SMEs need to take a lead from larger companies that have embraced technology and the way it can tightly focus on individual customer needs. 43 per cent of survey respondents say the information they receive from large companies is most useful (compared to just 10 per cent from smaller companies). These findings suggest that larger companies are taking advantage of technology and delivering customer needs more effectively. But in today’s business environment, there is no excuse for SMEs not taking CRM seriously as developments in the last couple of years have led to solutions that are affordable and simple to deploy for any small business.

Service driven, Customer led

According to Gartner, CRM is now firmly back on the agenda and was the most frequent search term on http://www.gartner.com in 2005. The rise of CRM has not been driven by the vendors but instead, SMEs are demanding it. There are a number of reasons for this. First, they increasingly recognize that customer data can not be stored in paper files, spreadsheets or email programs. Such information is often unavailable at the right time, hard to present for analysis and easily lost, putting the business at a significant disadvantage.

Second, businesses recognize that using the same technology as their customers gives them a competitive advantage. Dealing with transactions and processes in supply chains is time-consuming and costly so tight integration (such as via an enterprise portal) can be a critical differentiator that shuts out potential competitors.

Focus

The key factor for successful implementation of CRM technology is focus. In fact, some analysts say that the lack of focus that is found in larger enterprises is the cause of many CRM implementation-related problems.

SMEs need to focus on business alignment – they must invest resources on people issues, process and technology all at the same time. This three-pronged approach means that interest in CRM can be built quickly and maintained as SMEs are able to roll out CRM to specific areas of the business. The systems can then be extended throughout the business until a consistent view of the customer is gained wherever it is needed. Large enterprises have historically found this alignment difficult to achieve due to siloed business functions, varied management interests, politics, and significant differences in the way customers make contact.

One way that SMEs can take advantage of the technology is by adopting a web based CRM strategy. There is no hardware to buy and no software to buy: you just sign up online an go! You can also have the systems tailored to suit your business needs exactly and often at a very competitive price. Customer Relationship management is now a killer application for all businesses regardless of size and as costs come down more and more smaller businesses are taking full advantage of the opportunities and benefits available through the hosted or web based CRM options.