Software Options CRM On Demand and On Premise

Software vendors to support CRM strategies and SFA offer the market many options of software procurement and contracting. There is even a strong current in business development and use of free software (Open Source), which is supposedly free and at least much cheaper than other models. In this article we present some of the elements that a person responsible for evaluating technological tools to support a CRM strategy, keep in mind when submitting contract options, installation, operation and maintenance of software solutions.

Our intention with this article is neither to defend nor promote any of the two models, On Demand or On Premise. Both models are fully valid and like everything in life, have their advantages and disadvantages, which are relative. They are related in terms of the situation and scenario in which you want to hire and use. While for a business can be very timely, safe and beneficial to recruit and deploy a CRM On Premise model to another can be quite the opposite. We want you to consider which variables to assess and it may establish a detailed analysis to take you to define which of these models is the one that can benefit your organization.

Not included above variables related to the free software model, I personally consider it a topic of great risk, both technical and sustainability in the medium and long term, support a business strategy based on a system that has all the elements development, support, maintenance and vision sufficiently clear and specific that someone responds to this.

Let's review some concepts of On Premise and On Demand:

On Premise: Refers to the traditional model of procurement, installation and operation of enterprise software. This means that the company acquires the right to use software licenses, install the software on their servers or equipment (whether owned or rented) and is responsible for the operation thereof, updating, and data security in general, all activities as owner of the software operation.

On Demand: refers to the contracting model of software as a service. Under this model, the company hires the right to use the software installed on third party servers (not on company servers). The company is not responsible for installing software or servers, or on users' computers. Users use the software through Internet access. All data resides on the servers of third parties. The support, upgrade and maintenance of equipment and software is not the responsibility of the user company is responsible for the company providing the software service.

When your organization has defined a project carried out CRM or SFA, normally one of the components to be considered is the subject of technology and certainly in this software is covered. He is not alone, this is one of the biggest mistakes companies. A project to improve the management of customer relations is not only select software and expect miracles. We talked about this in several articles such as "CRM is not just technology." With the many software alternatives on the market, the problem becomes complex when evaluating and selecting a tool.

There are many variables to consider in this article we will refer to those variables that have to do with the operation of the software model (to learn more generally all the variables to consider, you should read the following document: Guidance for CRM Software Evaluation: In the main, we recommend that you review the following:

No. 1: Total Cost of Ownership of a CRM solution. Typically this calculation is known as TCO (Total Cost of Ownership). In the process of software evaluation and selection should include a financial analysis of the total cost of hire, operate, maintain and update a CRM software system. For this you must define the time frame for which the company evaluates such investments. Typically in software products, such investment should be analyzed within a 3 to 5 years. You should identify all costs or investments associated with the software on both models and to make a comparison of a financial nature about how much it costs comparatively each solution. Consider here all the factors involved in the operation of an information system and valorícelos in the period of analysis.

No.2: Projected Cash Flow for the Project. One issue is to identify how much it costs the system as a whole. Another is to identify investment as it will run in time. This is why it is a very important variable to know which is the availability of financial resources over time and what are the preferences of the company in this regard to level of management and finance to compare the two models. On Premise model requires increased investment in the short term (although you can use funding mechanisms). The On Demand model is generally more distributed at the level of spending.

# 3: Politics of Investment and Asset Management Company. As part of financial management policies that have any business, is the way the administration wants them to be managed and accounted for the assets of the organization. Under the model On Premise, software licenses typically are managed as an asset (except in cases where use is made of financial services such as leasing, this also depends on the legislation in each country) and the On Demand model , is managed software service as an expense. Two schemes are different from the accounting point of view and it is important to keep in mind what are the policies of the company in this respect in order to evaluate which scheme is more favorable contract.

No. 4: Level of Integration and connectivity required for your CRM project. Clearly defined if the development of their CRM or SFA project component integration with other enterprise systems is critical. If your company has a transactional system which is recorded all the information of customers or other systems exist which need to interact with CRM software, evaluate how complex and flexible is this process with each of the options . Typically happens to the extent that this factor of integration with other systems is more critical, a solution under the model On Premise is most appropriate.

No.5: Level of Customization and Adaptation of Business Process System of Empresa.Esta is a fundamental variable. If your deployment strategy is that your company wants to adapt to business processes that the software brings implicit, possibly both types of solutions are feasible. To the extent that the factor to adjust the system with processes that are clearly established and that the company considers to be part of their competitive differences, the system must be adapted to such processes. When it comes to ease and flexibility to modify the software functions, surely a model On Premise is highly recommended, although in recent years, On Demand solutions have reacted strongly to this and are a bit more flexible now day, but still do not compare to what they offer in this area Om Premise solutions.

No.6: Reliability and Data Security. Under the On Demand model, the data resides on servers outside the company. Today there are many security mechanisms and controls that allow a high level of reliability with respect to the custody and safekeeping of the data. However, many companies are highly sensitive to the issue of information security and confidentiality of it. On Premise In the model, all data resides on servers in the company and therefore the security and confidentiality of it is much higher, because there is no handling or storage of information by third parties.

No. 7: System Usability. This is an area in which Web applications have evolved considerably and have achieved, but also, if you have a comprehensive user interface. Om On Demand model, all applications used in Web format. That is, all system users should use the software through Web browsers. This can cause some discomfort for the end user in terms of speed of access (this depends heavily on the communications infrastructure and Internet access channels) and the fact that there are still Web applications that are difficult navigation and does not contain all the ease of use with the client / server applications. This has been changing dramatically, but it is an important point to consider. It is necessary to assess how productive are the applications in each model for the purpose of providing real productivity tools for users. For example, it is no mystery the speed and ease of use should have a system for call center agent. A person who can not tell a customer on the telephone line to wait because the system is slow.

That is why we always recommend client / server applications for call center agents.

No. 8: Access to Information and Applications. The mobility and ease of access to information have become much alive in recent years. It is necessary to consider ease of access that employees can get their information remotely, that is still outside the company premises. Often applications on-premise model may have difficulties to provide remote access. The On Demand model can be better tailored to these needs, because of its ease of access. Not that the On Premise model can not achieve this kind of remote access, but is a bit more complex and expensive. It is important to validate this factor and consider the pros and cons of each model to make a decision.

There may be many more variables to consider these with some with whom we have found and recommend evaluate before making a decision. Actually both models are fully operable, it is important to identify which is best suited to the conditions of each company.