On-demand or on-premise CRM: 5 things to consider before making your decision.

Transcription

1 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

2 Inroducon Inerne-based echnologes have played an mporan role n he developmen of modern CRM applcaons over he las several years. They have been he crcal drvng force behnd he rse of on-demand CRM, and have also enabled on-premse CRM vendors o dramacally smplfy deploymen and admnsraon. CRM has become far more accessble as a resul; adopon raes have soared, and companes oday enjoy unprecedened choce when comes o how hey wan o purchase, consume and suppor her new busness applcaons. Deploymen, noneheless, s a how raher han a wha, and compeng CRM soluons are separaed by a broader range of consderaons han jus he choce beween on-demand and onpremse. Addonally, he relave advanage or dsadvanage of one deploymen ype over he oher s enrely dependen on each company s ndvdual objecves and crcumsances, whch are lkely o change over me and vary accordng o a number of crera. Ths whepaper, herefore, ams o provde a clearer undersandng of he conex of deploymen whn overall selecon crera and examnes he fve key consderaons assocaed wh he area. Fve hngs you need o consder before choosng your new CRM soluon Ths whepaper examnes he fve mos mporan consderaons assocaed wh CRM selecon and dscusses how boh on-demand and on-premse deploymens mpac upon hem. These consderaons are broadly caegorsed as he followng: 1. User empowermen 2. Invesmen melne and TCO 3. Daa sensvy 4. Avalably of nernal IT resource 5. Inegraon 1. User Empowermen A CRM soluon should: (1) provde powerful funconaly ha suppors your users n her daly acves, (2) be suffcenly flexble so ha can be confgured and cusomsed o mee her parcular needs and (3) should always be accessble by hem, regardless of wheher hey are n he offce or on he road. Deploymen ype wll mpac on each of hese areas. Funconaly The funconal breadh and deph of CRM soluons vares sgnfcanly from vendor o vendor. I s mporan, herefore, o clearly se ou your funconal requremens up-fron n order o denfy he soluon ha s gong o provde you wh he bes f over he lfeme of your nsallaon. Whle you may nally focus on he roll-ou of CRM whn your sales organsaon, exendng o encompass markeng and cusomer servce funcons may be an objecve over he longer erm. 2 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

3 Soluon maury s an mporan consderaon n hs area. Generally, more maure soluons wh a number of major produc releases behnd hem wll provde broader and deeper funconaly han hose wh a less esablshed revson hsory. Companes should conduc a dealed examnaon of any poenal suppler s feaure-se. Ths s parcularly mporan n relaon o on-demand soluons where he marke s characersed by new marke enrans. Today, he mos funconally complee on-demand CRM provders are hose ha have leveraged her on-premse experse o delver her soluon n an on-demand envronmen. Confguraon and cusomsaon Wheher a he pon of nal roll-ou or laer n he soluon lfecycle, companes should be mndful of he confguraon and cusomsaon requremens of her new CRM soluon. Confguraon caers for basc changes n areas such as: (1) smple workflow, (2) access and secury, (3) user provsonng, (4) eam membershp and (5) user preferences. Admnsraor-level and user-level confguraon flexbly wll enable you o map your new CRM soluon more closely o he needs of your users and busness processes. Boh on-demand and on-premse soluons generally provde a wde range of confguraon opons. Cusomsaon caers for more complex funconal requremens such as: (1) creaon of cusom enes e.g. venue n he case of an even managemen company, (2) cusom screens, (3) cusom abs and (4) complex workflow. Exsng screens, abs and enes can normally be cusomsed wh relave ease whn boh ondemand and on-premse soluons. On-Premse soluons, however, end o provde a more effecve soluon where addonal cusom screens, abs and enes need o be creaed from scrach or where complex workflow orchesraon s requred. Owng o secury requremens, cusomsaon capables whn on-demand CRM soluons are generally provded on a codeless bass.e. does no requre developmen experse. The same onlne secury consderaons do no apply n he case of on-premse deploymen. Companes selecng an on-premse soluon, herefore, should nvesgae o wha exen cusomsaon can be carred ou on a codeless bass. Accessbly Companes expec her CRM sysem o be avalable o cusomer-facng saff regardless of her locaon or access scenaro. If your company has feld-based or remoe-offce employees, hen moble access s a mus have requremen for your new CRM sysem. On-Demand provdes a compellng proposon for companes wh moble and remoe offce workers. You should ensure, however, ha any prospecve on-demand CRM soluon caers for dsconneced access scenaros; suaons where an nerne connecon s no avalable. Addonally, f your moble workforce uses PDAs, smar phones or Blackberry devces, you may be bes served by selecng a soluon ha has been specfcally opmsed for moble devce access. You may also consder on-premse soluons ha have been fully web archeced. Ths ype of onpremse soluon provdes smlar advanages o on-demand soluons n erms of dsrbuon and admnsraon from a cenral server o users over a broad geography usng he nerne. RECOMMENDATION 1. You should fully defne your funconal requremens up-fron and hen deermne whch soluon and deploymen ype s gong o provde you wh he bes f over he lfeme of your nsallaon. Soluon maury s mporan, parcularly n he case of on-demand soluons. 3 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

4 2. You should undersand o wha exen your funconal requremens can be addressed ou-ofhe-box, and whch ones wll requre furher confguraon and cusomsaon. By usng codeless confguraon and cusomsaon ools, regardless of wheher your new CRM soluon s on-demand or on-premse, should make easy o carry ou hese changes whou he need for exensve developmen experse. Exensve cusomsaon requremens are lkely o be bes served by an on-premse soluon. 3. If you have remoe offces or feld-based saff, your new CRM sysem should be avalable o hese users, regardless of her locaon or access scenaro. On-demand soluons are parcularly sued o hs requremen; however, you should ensure ha hey adequaely caer for suaons where an nerne connecon s no avalable. 4. If your saff requres CRM access on a moble devce such as a PDA, smar phone or Blackberry, you should specfcally ensure ha hs s caered for by your new CRM sysem. WHAT DOES SAGE CRM PROVIDE IN THIS AREA? Full sue CRM across sales, markeng and cusomer servce for boh on-demand and on-premse users Basc o nermedae cusomsaon capables for on-demand users Advanced cusomsaon capables for on-premse users Exensve codeless cusomsaon across on-demand and on-premse soluons Full web archecure for boh on-demand and on-premse users Full offlne capables for dsconneced users A user experence specfcally opmsed for moble devces such as smar phones, PDAs and Blackberry devces. 2. Invesmen Tmelne and TCO The average lfecycle for a CRM soluon oday s n excess of 5 years 1. Arrvng a a clear undersandng of he lkely oal cos of ownershp (TCO) assocaed wh any new CRM deploymen s an mporan consderaon n any selecon process. Deploymen choce nfluences hs area consderably and companes should compare he nvesmen and cos srucures of boh models horoughly before makng a decson. On-Premse CRM wll requre upfron capal nvesmen whch wll be wren down over he lfeme of he sysem. On-Demand CRM, by conras, nvolves fxed, perodc subscrpons over he soluon lfecycle. On-Demand, herefore, can provde several advanages o companes wh lmed budges as does no requre he same upfron expendure on sofware, hardware 1 Source: Garner 4 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

5 nfrasrucure or mplemenaon servces. When vewed beyond he near-erm, however, ondemand soluons can resul n hgher coss when compared o her on-premse peers. By way of example, he graph above provdes a cos comparson beween on-demand and onpremse soluons over a 5 year perod 2. As we can see, he on-demand soluon requres a lower up-fron nvesmen (approxmaely 56% lower han on-premse) and provdes a lower TCO over a 2 year perod (approxmaely 21% lower han on-premse). The oal cos assocaed wh he ondemand soluon, however, ncreases a a faser rae han ha of he on-premse deploymen. By year 3, herefore, he on-demand has overaken he on-premse soluon as he mos cosly, and s TCO s approxmaely 9% hgher han he on-premse soluon. By year 5, hs gap has wdened furher, and he on-demand deploymen s approxmaely 56% more cosly han he on-premse soluon. In real-erms, hs could equae o a dfference of over $50,000 for a ypcal 50 user deploymen over he lfeme of he sysem. I s also worh nong ha as he number of users ncreases, hs dfference becomes more pronounced. On-demand, herefore, wll su organsaons ha: (1) wsh o benef from lower up-fron nvesmen hresholds and (2) prefer a predcable, fxed monhly cos. On-premse CRM, by conras, s more lkely o su companes where a lower medum-o-long erm TCO s a key requremen. Accounng reamen On-Demand and on-premse deploymen models are reaed dfferenly for accounng purposes. An on-premse soluon can be ncluded on a company s balance shee as an asse and wren down over a mul-year perod. On-demand subscrpons, however, are generally accouned for n he perod ha hey fall due. Pre-paymens of on-demand subscrpons are no ypcally classfed as asses on he balance shee. 2 Assumpons: (1) sandard real prcng for 50 users across boh deploymens, (2) On Premse mplemenaon cos a 1:1 rao o up fron sofware lcense cos and ncludes he cos of ncdenal hardware purchase, (3) On Premse annual manenance a 20% of up fron sofware lcence cos, (4) No manenance or mplemenaon coss for on demand, (5) On Premse and on demand deploymens have dencal funconaly and capables. 5 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

6 Carryng ou a lke-for-lke cos comparson Cos comparsons should be carred ou on a lke-for-lke bass as funconaly and produc capables vary sgnfcanly beween provders. I s also mporan o undersand he funconal dfferences beween edons of he same produc. I may be he case ha some funconaly has been jesoned from enry-level packages n order o reach a lower cos or o provde for a more compellng upgrade pah n he fuure when furher funconaly may be requred. Incremenal coss You should also be mndful of charges for ncremenal servce addons. In he case of on-demand, hese may nclude charges for addonal sorage or backng up of daa. You should, herefore, undersand clearly wha s (a) provded, (b) no provded or (c) an addonal cos opon, whn he poenal vendor s servce conac. Fnally, he fac ha CRM s delvered on-demand does no preclude he need o rean IT resource for enhancemens and sysem admnsraon. Cusomsaon and negraon requremens, for example, can have a sgnfcan mpac on he TCO for boh on-demand and on-premse soluons. These coss are generally facored no he analyss of on-premse soluons because hrd pary resource requremens are negral o hs deploymen ype. In he case of on-demand, however, hese coss are frequenly overlooked because of he plug and play percepon surroundng hs deploymen ype. RECOMMENDATION 1. You should carry ou a dealed analyss of all foreseeable coss over he expeced lfecycle of your new soluon. 2. Regardless of wheher on-demand or on-premse s seleced, you should facor n a realsc cos for consulng and sysem admnsraon acves o be carred ou on he sysem over he course of s lfecycle. 3. On-Demand CRM can provde several cos advanages o companes wh a lmed budge or a requremen for a shor erm CRM deploymen. 4. The ably o mgrae from one deploymen ype o anoher wll allow you o leverage he cos-economes of boh models over he long erm. WHAT DOES SAGE CRM PROVIDE IN THIS AREA? A low TCO for on-premse deploymens A low, predcable monhly cos for on-demand deploymens A low cos on-premse envronmen for companes wh exensve cusomsaon and negraon requremens A smple on-demand servce conrac whou hdden lock-n clauses and uncapped renewal prce hkes wh a pay-per-monh opon n ceran regons. 6 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

7 3. Cusomer daa sensvy Whle on-premse CRM reans cusomer daa n-house, on-demand CRM exernalses cusomer daa o a 3 rd pary facly. The degree of cusomer daa sensvy, herefore, wll have an nfluence on deploymen choce. For ceran companes, cusomer daa s perceved o be oo sensve o be hosed exernally and on-premse CRM, herefore, wll generally be he preferred opon for hese organsaons. In some crcumsances, however, on-demand CRM may acually provde greaer daa secury and proecon when compared o on-premse deploymens. In he case of an SMB for example; hosng cusomer daa n a hghly secure, purpose-bul hrd pary daa cenre wh hgh levels of redundancy, backup and monorng may delver a level of secury and proecon ha could no be acheved cos-effecvely nernally. The sophscaon of hosng operaons vares sgnfcanly beween on-demand vendors. A comprehensve revew of any poenal soluon provder s daa cenre, herefore, should be a core componen of any on-demand evaluaon process. RECOMMENDATION 1. Your choce of deploymen ype should reflec he sensvy of your cusomer daa. 2. On-Premse CRM represens a sold choce for companes wh cusomer daa whch s deemed o be parcularly sensve n naure. The fac ha cusomer daa s hosed nernally, however, does no necessarly mean ha wll provde greaer levels of secury han an on-demand provder s purpose-bul 3 rd pary daa cenre. WHAT DOES SAGE CRM PROVIDE IN THIS AREA? Deploymen choce beween on-demand and on-premse A world class, SAS70 cerfed daa cenre for on-demand deploymen 4. Avalably of Inernal IT Resource The avalably of nernal IT resource s a key facor o consder when selecng a poenal CRM soluon. Inal projec roll-ou and on-gong suppor and admnsraon wll requre IT experse; sourced nernally or exernally. Your choce of deploymen model, herefore, should reflec he avalably of n-house IT saff. Deploymen CRM mus be capable of beng deployed quckly and easly. As such, cusomers should be up and runnng n days and weeks raher han monhs. Shorer mplemenaon meframes equae o lower projec coss. They also reduce projec rsk and faclae an earler reurn-on-nvesmen n he soluon lfecycle. On-Demand deploymens remove he need o nsall sofware locally or carry ou hardware and sofware nsallaon and confguraon n-house. On-Demand, herefore, s parcularly sued o 7 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

8 organsaons wh lmed or no nernal IT resource. Companes wh lmed nernal IT resource may also consder on-premse CRM soluons whch are fully web-archeced. Web-archeced, on-premse soluons provde a dsnc advanage over radonal clen/server producs and leverage smlar economes of cenralsaon as on-demand soluons. Ths means ha hey can be enrely deployed from a cenral locaon whou he need o nves n expensve and manenance-nensve echnologes, such as Crx or Mcrosof Termnal Server. Ease of ongong suppor and admnsraon Regardless of wheher your CRM soluon s deployed on-demand or on-premse, you should ensure ha delvers adequae performance and avalably o mee your user s needs. Day-oday acves such as provsonng new users, mporng daa, wrng repors or carryng ou upgrades, can equae o a sgnfcan ncrease n IT workload over he lfeme of he applcaon. Moreover, when an ssue arses, here should be a clearly defned suppor srucure n place whch provdes ssue resoluon on a mely bass. On-gong admnsraon can represen a szeable burden for companes deployng an on-premse CRM soluon for he frs me; parcularly n he case of SMBs whch generally operae wh lmed IT resources. On-Demand represens an aracve proposon for hese companes. On-Demand CRM soluons, however, are enrely relan on exernal resource for suppor queres. Companes consderng on-demand CRM soluons, herefore, should carry ou a dealed revew of he vendor s suppor servces and clearly undersand servce level oblgaons across: (1) scheduled avalably, (2) case response mes and (3) applcaon upgrade roll-ous. Cusomer reference calls should be used n he evaluaon of any poenal servce provder s suppor provson. Equally, companes consderng an on-premse soluon should ensure ha here s a realsc undersandng of he addonal suppor burden assocaed wh he roll-ou of he new applcaon. Agan, fully web-archeced on-premse CRM soluons provde a dsnc advanage over radonal clen/server-based sysems by mnmsng, or oally removng, he admnsraon ha s requred a he clen end, and faclae upgrades, pach updaes and new user provsonng from a cenral pon. Boh on-demand and web-archeced on-premse CRM soluons are parcularly sued o companes wh moble employees or mulple offces over a broad geography. They also benef organsaons wh a large number of employees where, regardless of he number of locaon or access scenaros, ypcal clen/server deploymens can be dffcul and expensve o manan across every user deskop. On-he-ground suppor Even f your company has suffcen nernal IT resource o deploy and manage your new CRM nsallaon, he avalably of local, on-he-ground experse from your CRM vendor, or cerfed parner, s reassurng, parcularly when you are nvesng n CRM for he frs me. Mul-lngual suppor may also be a facor for companes wh offces across several locaons. Local experse can be used o (1) resolve suppor ssues, (2) ran new users or (3) provde consulng servces around he furher exenson and opmsaon of your CRM sysem. Where on-premse CRM soluons have radonally been suppled and suppored hrough local vendor offces and parner neworks, on-demand provders have adoped a more cenralsed model of servce dsrbuon and suppor provson. As a consequence, hey generally do no have he same level of experse avalable regonally as her on-premse counerpars. 8 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

9 RECOMMENDATION 1. You should gve careful consderaon o a broad varey of facors ha may mpac upon roll-ou complexy and cos, as well as on-gong suppor and admnsraon. These nclude: (a) geographc dsrbuon of offces, (b) workforce mobly requremens and (c) number of users. 2. On-Demand s parcularly compellng for companes wh lle or no nernal IT resource. 3. On-Premse may provde a more effecve soluon for companes wh nernal IT saff where he addonal suppor requremens can be negraed easly no exsng nernal servce level agreemens. 4. Local consulng and suppor experse avalable from your poenal CRM vendor or s cerfed parner nework should be examned, regardless of deploymen model. WHAT DOES SAGE CRM PROVIDE IN THIS AREA? 100% web archecure ha ensures he soluon can be deployed quckly and coseffecvely on-demand or on-premse, and over mulple locaons where requred A fully web-archeced on-premse soluon ha combnes ease-of-deploymen wh sgnfcan cusomsaon and negraon capables Self-servce, codeless admnsraon ools and easy-o-use wzards for boh ondemand and on-premse deploymens ha reduce or remove he need for dedcaed IT resource A global nework of Sage offces and busness parners o provde local, on-heground suppor for on-demand and on-premse CRM users 5. Fron-o-Back-Offce negraon The prmary objecve of a new CRM projec s o unfy cusomer nformaon across a company s fron-facng acves; sales, markeng and cusomer servce. Ths, however, does no necessarly guaranee he full 360 degree cusomer vew ha a company may aspre o. To realse a ruly comprehensve cusomer vew, you should consder negrang your CRM sysem wh your backoffce envronmen. Fron-o-back-offce negraon enables fron-offce users o access he fnancal and ransaconal daa assocaed wh her cusomers (daa no normally generaed by or sored whn a CRM sysem) whou he need o leave her CRM applcaon. Such daa may nclude nvoce hsory, sales hsory, paymen hsory or oher mporan back-offce relaed cusomer nformaon. Fron-o-back offce negraon also provdes for sgnfcan me and cos savngs hrough process auomaon; reducng, or removng he need o re-key and re-verfy nformaon as passes from one sysem o he nex. Examples of hese sragh hrough processes nclude: (a) generang a quoaon n CRM based on prcng conaned n he ERP applcaon or (b) populang an order drecly no he back offce sysem hrough CRM workflow. Inegraon capables should, herefore, be an negral par of any CRM evaluaon, parcularly when decdng beween ondemand and on-premse deploymen models. 9 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

10 On-Premse CRM has radonally len self o pon-o-pon applcaon negraon wh ERP soluons and, herefore, s seen as he more negraon-cenrc of he wo deploymen ypes. On- Demand, by conras, has been more generally seen as a sandalone deploymen. Ths suaon, however, s changng, wh an ncreasng number of on-demand CRM provders makng easer for her servces o be negraed wh oher busness applcaons, regardless of wheher hey are locaed nsde or ousde he company frewall. The ncorporaon of Web Servce APIs by on-demand CRM soluons has been a key faclaor of hs change. Web Servces APIs provde a sandards-based, flexble and cos-effecve approach o enerprse applcaon negraon. The ncreased avalably of Web Servces APIs whn ondemand soluons has mean ha hey now represen a vable opon for companes wh basc o nermedae negraon requremens. Addonally, companes usng a packaged ERP soluon should examne CRM soluons ha provde ou-of-he-box negraon wh her parcular back-offce envronmen. Inegraon-ready soluons can be parcularly approprae for companes ha wan o ge her back-offce negraon up and runnng quckly and cos-effecvely. RECOMMENDATION 1. The fron-o-back-offce negraon capables of any poenal soluon, wheher on-demand or on-premse, should be examned as par of any CRM evaluaon process. 2. Whle on-demand deploymen may be ncreasngly vable for companes wh basc o nermedae negraon requremens, companes wh more complex requremens may be beer served by selecng an on-premse soluon. WHAT DOES SAGE CRM PROVIDE IN THIS AREA? Sandards-based Web Servces APIs ha enable quck and cos-effecve negraon capables beween Sage CRM on-demand/on-premse wh 3rd pary applcaons and back-offce envronmens Ou-of-he-box negraon beween Sage CRM and Sage s marke leadng ERP packages I s also worh nong ha where a vendor provdes boh on-demand and on-premse CRM usng he same Web Servces APIs, such as Sage CRM, you can poenally change deploymen ypes whle sll reanng he same back-offce negraon. Concluson Deploymen ype s an mporan choce, bu should be made n he conex of a broader varey of consderaons. Companes should be mndful of he expeced lfespan of her new CRM soluon and ensure ha her requremens wll be me across a varey of crera ncludng: funconaly, cos, ease-of-manenance, ably o cusomse, ably o negrae and ably o empower users. Boh on-demand and on-premse deploymens have her own parcular benefs and drawbacks. Some manfes hemselves n he near-erm whle ohers come no play a a laer sage n he soluon lfecycle. Whle hs whepaper has dscussed he broad specrum of busness and echnology consderaons ha mpac on deploymen choce, a company canno realscally be expeced o make a defnve deploymen decson upfron gven he wde varey of fuure varables. Parnerng wh a CRM vendor ha provdes deploymen choce, herefore, s a dsnc advanage. Sage offers 10 On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

11 s cusomers unprecedened flexbly n hs area; allowng hem o choose he mos approprae model for her needs a he pon of roll-ou, as well as he freedom o move o a dfferen model n he fuure f her needs change. Abou Sage CRM Sage CRM s an easy-o-use, quck-o-deploy Cusomer Relaonshp Managemen (CRM) soluon comprsng sales, markeng and cusomer servce auomaon. Award-wnnng Sage CRM equps sales, markeng and cusomer servce eams wh he ools hey need o fnd new cusomers, close sales faser and buld lasng, more profable relaonshps across all channels. The Sage Dfference The leadng suppler of SMB busness applcaons n he world* The leadng suppler of CRM soluons o SMB organsaons Over 5.8 mllon cusomers Over 14,500 employees Over 30,000 Sage-cerfed parners specalsng n busness applcaons Drec presence n 26 counres Relaonshps wh over 40,000 accounancy pracces 28 year s experence *Source: AMR Research, 2009, The Global Enerprse Applcaon Marke Furher Informaon Furher nformaon on Sage CRM and SageCRM.com can be obaned by conacng your local Sage offce or cerfed Sage Busness Parner On-demand or on-premse CRM: 5 hngs o consder before makng your decson.

12 9921DuponC r c l edr v ewes, Su e300 For Way ne,i N nf o@dwd ec hgr oup. c om www. DWDTechGr oup. com DWDTec hnol ogygr oup,w hof f c es nfor Way ne,i N,I nd anapol s, I NandTol edo,oh sam c r os of Gol dcer f edpar nerandsage Sof war eau hor z edpar ner.wear ec omm ed ohel p ng c ompan esev al ua eand mpl emenpr ov enne wor k,ac c oun ngand bus nes smanagemens of war es y s emsand opr ov de hes uppor needed ok eep hos es y s emsf l our s h ngov er me.