Hosted CRM – an emerging paradigm in customer relation management
(contd.)
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Advantages of Hosted CRM
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Relatively low startup costs: Hosted CRM
is cost effective (at least initially).
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Rapid deployment: No hardware or
software to purchase.
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Few IT resources: No IT maintenance or
staffing. Many companies want to stay focused on core operations
keeping the internal IT management needs of the company to minimum.
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Ease to use and deep-enough
functionality.
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Easy Upgrading: The ease with which
upgrades are rolled out is another benefit of hosted offerings:
They’re automatically performed centrally, obviating the need for an
IT staff to distribute upgrades to individual desktops or portable
devices.
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Hosted CRM also help in broader
integration opportunities afforded by evolving Web-services.
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Provide a platform for mobile CRM- Sales
personal can log on to important CRM data in field, from any place
that has Internet connectivity.
Disadvantages of hosted CRM
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One of the advantages licensed CRM has
held over hosted CRM is its purported ease of customization and
integration. SalesNet's dashboard and Salesforce.com application
server are allowing customization in hosted services.
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CRM ASPs faced doubts about their
security and stability: Customers were reluctant to trust crucial
corporate data to an outside vendor. But the vendors have done a good
job of building robust infrastructures and allaying those worries.
Previous fears associated with hosted solutions have been minimize
through security capabilities like firewalls, through security
capabilities like firewalls
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Regarding the cost of hosted CRM,
analyst suggests that companies that engage an ASP are perhaps
overawed by the low initial price tag without considering the
necessary ongoing costs they may incur as the relationship period
extends. Setup costs; license conversions; fees for customers or
business partners; costs of reducing users; selecting the appropriate
pricing metrics; arranging residual rights; training fees;
data-ownership issues; integration and customization; and termination
fees are often overlooked by the users of the hosted CRM and these can
over a period of time tend to increase theultimate cost of hosted CRM.
Some vendors don't agree that any of these expenses is a surprise.
"All the costs are visible," says Dan Starr, CMO of Salesnet, which
provides on-demand CRM.
Hosted CRM vs In House Software
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ASP/Hosted
CRM
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In House Software
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Cost
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Initial Investment is low
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Less cost in long term use (after
three years)
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Flexibility
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Easier to customize, but has limited
options
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More flexibility, but easier to over
customize
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Man Power
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Usually requires just one business
administrator
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Requires business and IT staff
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Overall
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Easier to manage
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More control over the applications
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Where and for whom Hosted CRM is
really beneficial
If an organization has complex business
processes to automate, it may make more sense to run CRM products
in-house, she continues. The customization you can do with hosted
offerings is limited to some extent. In any case, if more difficult
coding are needed, the company would require the services of a skilled
programmer. If you’re a large company where IT is a key competitive
differentiator, it’s more likely that you’ve got IT workers with
sophisticated and multifaceted skill sets who can handle the integration
work and custom programming needed to achieve return of investment (ROI)
from an in-house CRM implementation. However, for a mid-market or
smaller company with little or no IT staff, will be probably better
served by outsourcing customer-related processes to an ASP. The provider
handles upgrades and support, and offers easy-to-use tools for some
customization. Similarly if an organization
has a widely distributed workforce, whether it be because of mobility
requirements or due to geographically dispersed offices, an outsourced
model can make a lot of sense, as users can use a browser to log-in to
applications.
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