Analysts forecast that by 2015, one-third of all spending on customer relationship management software will be for SaaS Technology versus 26 percent in 2010 (2 QAS; Data Quality New; CRM spending to focus on SaaS; February 9, 2011). But what is best for your business? Will a SaaS-based CRM solution or on-premise CRM meet your current and future business objectives?
A whitepaper from OSF Global Services called, “Saas CRM vs. On-Premise CRM: Which is the Right Choice For Your Business?” gave advice on selecting CRM software, including the benefits of SaaS versus on-premise. The benefits of both are shared below.
Software as a Service (SaaS) CRM
SaaS CRM is web-based software purchased as a subscription, which means the application is available to you as needed though a computer’s web browser. Your internal IT resources or a service partner configure the CRM, and then the application is maintained by the SaaS provider. This approach allows businesses to meet fluctuating demands.
A valid case can be made that SaaS CRM offers some immediate benefits to your organization. For instance, SaaS CRM requires no upfront IT infrastructure, software installation or configuration, which means less cash outlay, fewer labor requirements and lower financial risk to get your CRM solution going. In many cases, deployment is easy, and comprehensive support is part of your service agreement package.
SaaS pricing is typically a per-user per-month subscription. This utility-based pricing model is simple, predictable and reduces cost overruns.
Once your SaaS application is up and running, you can access data easily via the Internet and any supported Web browser – which makes access for remote and mobile workers easy. Additionally, SaaS CRM does not require more of your often over-burdened IT staff, leaving them available to focus on other projects and initiatives. For example, software upgrades happen dynamically, with no involvement from your staff.
On-premise CRM is the conventional approach in which the CRM application is installed on site, on your computers and in your data center, with your IT resources managing it.
If your organization’s infrastructure is already in place, purchasing your own CRM application and then running it and managing it on premise might be the right option for your business. One advantage is obvious: You have more control over every aspect of your CRM solution – from Service Level Agreements (SLAs) to dedicated system and security and regulatory compliance requirements.
You also can be directly involved with any business critical integration decisions and processes. In addition, an on-premise solution carries less chance that data will be inaccessible due to a loss of outside connectivity issues with your service provider or compromised in any way due to factors outside your control.
Consider the benefits of both the SaaS and on-premise solution and then ask these 5 questions:
1. What are your SLA requirements, especially if you are in a highly regulated industry?
2. Do you have the IT staff available to support and administrate the CRM over the long term?
3. How much customization does your CRM solution need?
4. Does the cost-per-seat formula work in your favor?
5. How tightly do you want to integrate CRM with other solutions?
Today, your company has increasingly more options when it comes to where and how you want your CRM solution. On one hand, SaaS-based CRM might be an attractive, affordable option that can be deployed quickly and easily without having to expand or retrain your IT staff. On the other hand, on-premise CRM gives you more control at every level, including SLAs, integration, compliance and security. In either scenario, heading to the cloud can be part of your longer-term solution.
For more details you can view the full white paper here or view the additional resources listed below.