The arguments for and against on-demand and on-premise business applications have been a long-time mainstay in corporations among business users and IT. If you’re considering an investment in or renewal of a customer relationship management (CRM) or sales force automation (SFA) solution, then you’ve likely heard these discussions. Before making a decision (including selecting a hybrid solution) and narrowing down your option of vendors, following are some clear-cut definitions to help you navigate the options.

 

-- On-Premise: Your data and software applications are held in-house by your company where servers, connections, access, and data are all controlled by you and housed internally.

-- On-Demand: Your data and the CRM or SFA application are available via the web where servers and data are housed by the application vendor. Often called software-as-a-service (SaaS (News - Alert)).

-- Hybrid Solution: Some vendors and partners are starting to offer a combined solution with some of the best of both worlds—data and applications are hosted by a third-party, but ownership is still held internally.

 

To help you narrow down the vendors, consider your business’ position with these four questions:

 

Your accounting and order information is certainly critical for your business. But what about your customer history, profiles, and analysis, as well as your customer service processes? Not to mention, your sales methodologies and forecasts. If your business lost part of this data, how would the future of your business be impacted? Some companies place more value on transactions rather than relationships with customers and customer-facing processes. But if customer information is a key asset to your business, ensure that data receives top priority. For example, if you were to leave a vendor after five years of customer and business history, how could you port that data into another system for future use?

 

An on-premise application enables you to have the most control over your data because you hold it in-house. But if you don’t want to dedicate resources system maintenance such as back-ups and security, a hybrid solution may be an attractive option. This enables you to have complete ownership of your information and the software application, while utilizing a third-party partner for hosting, back-up, extra security and other services.

The cost and scope of CRM go beyond the software alone. Successful CRM is achieved by using a solution to optimize processes and training the staff to properly use it. That said; ask these cost-related questions of your vendors when planning your CRM solution:

 

 

Whether it’s a capital expenditure or operational expense, understanding the total cost over the next five years will ensure that you’re focusing on the total ROI of a CRM solution.

 

Consider how your field and mobile professionals and executives will actually use the CRM solution in the field. If CRM is meant to benefit the staff, it needs to be easily accessible.

 

For example, will they boot up their laptop in between sales calls to update meeting notes and look-up information for their next call? Will they do these tasks at home at the end of the day? Or will they use mobile devices such as BlackBerry (News - Alert) smartphones to update and retrieve information on-the-fly? In each of these scenarios, consider what type of information the sales people need, what information their managers need, and whether they are operating online or offline. Also, consider whether these professionals need access to viewing and updating information in airports and planes, as well as whether they are usually operating within the city or are in rural areas where full wireless connectivity may be difficult to secure.

 

When you’re evaluating CRM solutions, consider the fastest and most convenient method for the mobile workforce to access their key information, while keeping them in front of customers selling and minimizing time spent on administrative tasks. Go with the field reps on a “day in the life” trip to fit your CRM or SFA application into their work style, and even better – to improve the productivity of their current work day.

 

Oftentimes, having back-office information accessible to customer-facing staff on the front lines is critical, including credit balances, outstanding invoices, shipment status, and product details. At the same time, you want to shield your customer-facing staff from full access to accounting or ERP systems that hold this information. Essentially, you need to bring key pieces of relevant information into a CRM or SFA system for sales and service staff to use.

 

It’s often easier to make your CRM work with your back-end than the other way around, since a migration of accounting or ERP software isn’t an easy task. But similar to roadblocks for renovating a rented apartment, it may not be feasible to customize or integrate a hosted CRM solution. Ask how the solution is hosted and how it affects your ability to customize or integrate it with your back-end solutions—whether you approach it through batch synchronization or real-time data feeds.

 

Frequently, a company puts significant time and resources into the process of selecting the right CRM system for their business, but the post-selection time deserves equal attention to glean the biggest benefits from the system. Once you’ve chosen a vendor, ensure that the committee of customer-facing leaders remains committed to ensuring a successful implementation of the system. In a nutshell, best practice implementations should consider security, data fields, processes, training, change management, feedback, integration, customization, reports/dashboards, and alerts.

 

Whether you choose an on-premise vendor or hosting provider, remember that the success of CRM is in implementing your customer-facing processes and effectively training staff to use the system to its maximum benefit. Selecting the right vendors and partners will yield great returns on your investment with staff productivity, management visibility, greater customer relationships and increased sales.