Hosted versus in-house CRM

Johannesburg, 25 Aug 2009
Read time 2min 10sec

When companies consider implementing an in-house CRM system, or opting for a hosted solution, the success criteria remain the same, explains Heath Turner, CRM director at IS Partners.

Companies often feel short-changed when a CRM implementation does not deliver the expected value from the outset. Turner says the reason for this is typically two-fold: “Users are not adopting, and thus not using the system, while executive management is not providing the necessary impetus by driving adoption. Often they are not making the changes to their own decision-making habits by using the system.”

Turner advises that any CRM solution has to be driven from the top down, with involvement from key executive sponsors, and clearly defined objectives and deliverables that are measured against these objectives.

Arguing the merits of hosted CRM solutions, Turners says, “a hosted solution can give you the ability to 'try before you buy', but must be viewed in the same light as any IT project.” He adds that outsourcing the CRM service will address some of the financial challenges facing companies today. “Companies that do have capex for the infrastructure, hardware and software outlay would typically benefit from a solution hosted off-site.

“This way, the cost and responsibility of the infrastructure falls to the service provider. The service agreement with the provider further removes the burden of support from the organisation - a key factor for finance or sales teams who will benefit from CRM, but do not always have technical know-how and so require dedicated support,” he continues.

A further consideration for a hosted solution is whether or not the IT department has the resources to facilitate an in-house CRM implementation in the time the company needs it. “IT may not have the resources if this was not budgeted for, and it may not be their top priority. They may also not have the time to provide support and integrate the system into the IT environment,” Turner explains.

Favouring hosted solutions, Turner concludes that, “hosted CRM offers the advantage of being 'switched on now', simply through a log in and password, which will give you access to 'vanilla' CRM.

“While a hosted solution can prove cost-effective in the long-term, an in-house solution offers the benefits of reduced bandwidth requirements, on-site support and in-house technical skills,” he adds.

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