Quick guide to selecting CRM types : CRM On Premise v/s Cloud CRM
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A Customer Relationship Management (CRM) suite links and integrates different interactions with the customer to improve internal efficiency and external customer satisfaction. On-premises CRM is the traditional way of computing that involves installing the CRM suite in enterprise servers, complete with all associated paraphernalia such as database and other resources required for the CRM to function. The enterprise becomes responsible for everything. On the other hand, hosted CRM is available through the cloud on a subscription model. The user can simply sign up and start accessing the CRM on the fly, without having to set up anything. Hosted CRM comes with many benefits, such as ease-of-use, centralization of data, anytime-anywhere availability and more. However, many experts believe that after a period of five years, the use of a hosted software package is no longer economical and on-premises suites recoup their capital investment. But this need not always be the case. An on-premises CRM still attracts significant recurring costs, which may actually match the subscription costs of a hosted CRM solution. This infographic illustrates the key difference between on-premises and cloud based CRM, and analyzes if on-premises CRM solutions are still relevant.
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Quick guide to selecting CRM types : CRM On Premise v/s Cloud CRM
- 1. Key Differences On Premises CRM Cloud Based CRM Control Complete ownership and control Little or no physical control Accessibility Works on-premises in any situation or environment Available only within the premises, on designated points Depends on internet and connectivity Accessible anytime, anywhere On-Premises CRM Hosted CRM Set-Up Complex, time consuming process Hassle-free, on-the-fly, done in a few mouse clicks. Stressful, time consuming project Rapid, smooth, seamless and stress-free deployment. Requires extensive physical infrastructure Does not require any infrastructure, but internet connection Investment Significant upfront investment Little or no upfront investment Costs High upfront costs Little or no upfront costs Additional recurring costs for staff and maintenance Monthly/annual subscription model SUBSCRIPTION Fixed cost - sunk investment Cost varies depending on size of database and number of users Obsolescence Software / hardware obsolescence after some years The pay as you go fixed pricing also converts capital expenditures to easily manageable operating expenses Flexibility Highly inflexible. The required capacity and functionality has to be decided and installed upfront Modular – subscribe only to functions required on a monthly basis. Most providers offer flexible license options Highly rigid. Very difficult and time consuming to add capacity Highly scalable Capacity once added is a sunk investment Capacity can be added or reduced as required easily, on-the-fly Scalability Customization Enterprise can customize the CRM as required Extent of customization available depends on selected vendor. Full featured hosted CRM offer customization options on par with what can be achieved with on premises CRM Transformation of Business Process Does little to address issues of data silos Force enterprises to move all customer related data to a central depository, thereby eradicating data silos Version conflicts can derail the system Everyone has access to the latest and complete version of the data iterations Support Requires an IT team to install, operate, maintain, update, and repair the CRM No dedicated IT team required. Lay users can run the system Integration Possibility of deep integration with other systems and components of the enterprise Options for integration with other systems limited - integration may require the enterprise's legacy applications to comply with a rigid, uniform system Security Highly secure, since there is no need for communication to go across to a third party. Database is stored locally Data, even though stored in a private and secure database moves through internet. Susceptible to various attacks. Military grade encryption reduces threats greatly though Ease of use Users need to be trained Minimal training required Resources Resource intensive Relatively more energy-efficient Suitable for Only large enterprises Suited across the board, especially for small and medium enterprises On-premise versus Cloud CRM Quick guide to selecting CRM type Cost-Benefit Analysis Security On Premises CRM Cloud Based CRM Software and database Servers and other hardware Other Resources required to install the CRM Salary of IT staff required to install, operate and maintain the system Energy costs to run the system Cost of managerial time to take care of the system Cost of server and software obsolescence Monthly subscription costs (depending on database size and no. of users) BIG CONCERN Data resides in external servers and is transmitted over the Internet Hosted CRM security checklist Physical Security for the Provider's External Data Centers Electronic surveillance Multi-factor access control systems on a least privileged basis Trained security guards on 24x7 basis Environmental systems designed to minimize the impact of disruptions to operations Redundancy through multiple geographic regions and availability zones to ensure uptime even in case of attacks or natural disasters Network & Server Security Built-in firewalls Private Subnets Access to a small group of administrative users only Regular penetration testing Application vulnerability threat assessments Network and system monitoring on 24x7 basis Regular and systematic back-up of customer and system databases Deletion of archived backup data after a certain interval Quarterly penetration testing performed by Workwise Annual penetration tests performed by 3rd party vendor 1. suyati.com/shift-your-offline-crm-to-cloud 2. www.comparebusinessproducts.com/crm/advantages-of-on-premise-crm 3. www.forbes.com/sites/louiscolumbus/2012/07/27/gartner-hype-cycle-for-crm-sales-2012-sales-turns-to-the-cloud-for-quick-relief 4. www.oncontact.com/crm-software-cloud-vs-on-premise 5. www.techrepublic.com/blog/the-enterprise-cloud/comparing-cloud-to-on-premise-crm-choosing-a-solution 6. www.business-software.com/article/on-premise-crm-pros-and-cons 7. blog.imason.com/microsoft-crm-online-vs-on-premise 8. www.oncontact.com/crm-software-security 9. www.comparebusinessproducts.com/resources/item/the-untold-costs-of-a-crm-implementation Reference: Traditional way of computing Requires installation in enterprise servers Too many paraphernalia Easy to use Centralization of data Anytime-anywhere availability Available through cloud Subscription model Simple sign-up procedure Accessible on the fly User Acceptance Research major Gartner estimates that 35% of all CRM implementations are now cloud (SaaS) based, and that this will grow to over 50% by 2020. The extent of cloud based CRM adoption varies across CRM software categories Web analytics 95% adoption95% 50% 40% Salesforce Automation: 50% Configure Price Quote (CPQ) : 40% 35%