Review the issues that lead many companies to see hosted software as a tactical, short-term remedy for a long-term problem.
Posted Nov 15, 2004
There has been a great deal of discussion recently regarding the potential pitfalls of on-demand CRM--hosted, Web-based systems designed to provide an instant external resource, readily accessible by all who need it, at a per-user flat rate.
Critics of hosted software tend to concentrate on the strategic, long-term costs that underlie the attractive initial costs and ease of deployment, as well as the occasionally unrealistic expectations of the users. The speed at which this new concept has gained ground has led many companies to see hosted software as a tactical, short-term remedy for a long-term problem. These firms might not fully review the issues that would beset them with an in-house system like integration, business process engineering, training, and support.
However, if it is the case that on-demand CRM is viewed as a method of being up and running while the details of a longer-term strategy are hammered out, it follows that the ultimate solution may not be an outsourced solution.
What if you want, finally, to bring the CRM system in-house? How easy would it be to do? How much of an issue is migration? How much of a pain is transferring from an on-demand resource to an in-house solution? How much of that pain is technical or operational and how much purely financial?
Some vendors do permit convertible licenses for their software, but often the offerings are totally different, and "migration" it is more like implementing a completely new system. All the user company has done is delay the event, and pay a rental for a temporary system. It's like renting an apartment for a period then buying the house next door.
The ancillary costs that beset migrating from an on-demand solution to an in-house deployment may include revisions to data strategy, amendments to business processes, and new rounds of training, both for the users and for the technical resource who previously had no part in the CRM solution. Another casualty is the loss of all the internal PR benefits earned previously when the hosted system was introduced.
Some companies do offer software that presents a seamless changeover from external hosting to internal resource. To ensure all the factors have been considered, ask the following:
What is the likelihood of the short-term fix becoming a permanent fixture, or, how long is it before the board insists on an internal solution?
Can the software package being considered make that leap without it costing the earth and undermining any goodwill that has been established with the users?
What are the pros and cons of waiting for the right solution based on the long-term view, rather than the quick win?
Should the company only consider a readily transferable system?
Appreciating the importance of getting the shorter- and longer-term strategies in sync is difficult, but companies can the pain and frustration of transfer.
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