When I'm not running a software company, I like to spend my time behind an easel. A few weeks ago I finished a painting only to discover that it wasn't quite right. The solution was fairly straightforward--I just had to pick up my brush and fix the problem areas. Of course, I could have gone back to the art supply store where I buy my paint to demand that the clerk touch up my work for me. It sounds like a terrible idea, but that's exactly how most companies manage their CRM software, by taking it to people who have better things to do with their time and saying "make this work."
Organizations purchase CRM software to solve their business problems, but all too often the management of these systems falls on the shoulders of busy IT professionals who are forced to devote their time and energy to implementing bulky software packages. This isn't just an inconvenience for technical staff, it also reduces productivity and costs money. For example, if it takes two people from the IT department six months to get a CRM system up and running, you've just thrown away the equivalent of one year's salary with no discernible benefit to the organization. And no matter how well a system might work in the long run, the installation, integration, and management of a new CRM system is the equivalent of stacking up money and setting it on fire.
Unfortunately, dedicating IT resources to supporting CRM systems has, like death and taxes, always been unavoidable. Companies that wanted the benefits of a unified package to increase profitability by solidifying customer loyalty had to pay the piper on the front end not only by shelling out for expensive software, but also by having to siphon their own IT resources that could have best been dedicated to revenue-generating work. The good news, however, is that this trend might finally be coming to an end, thanks to the advent of Web-based on-demand software.
The term on-demand has become a hackneyed adjective (joining the ranks of end-to-end and best-of-breed), but it's not worth ignoring just because it's overused. In simple terms it means that anyone can access data from any location at any time through any Web-enabled computer. There's no need for a massive IT infrastructure because all the data-and the application itself--are remotely hosted by the software developer, allowing users to access any Web-based CRM tool from their home, office, hotel room, or conference room.
On-demand applications shift the burden back to where it belongs, with business decision makers, and away from the IT. Even ignoring the cost of buying and installing a CRM package, which can easily run into the seven-figure range, the financial savings generated by freeing up IT pros is a compelling enough reason to forgo enterprise software packages in favor of Web-based systems. A typical CRM integration takes about eight months to complete, and requires entire teams to focus on the project. This adds up pretty quickly and translates into a major hit on the company's coffers. According to the Bureau of Labor Statistics, network and computer systems administrators earn a mean annual wage of $62,300, not including benefits, bonuses, and other payments. A conservative estimate puts the actual direct salary requirements to support a typical installation at about $250,000, and that doesn't even include the expense of bringing in high-priced consultants to oversee the project, or the hours that IT teams will have to spend on ongoing maintenance.
In addition to the significant cost savings they enable, one of the great things about on-demand CRM systems is that they are incredibly fast to get up and running. Because there's no need to install new servers or load and test new software, new CRM applications can go live in a matter of weeks, or even days. This speed of integration not only means that CRM software will be supporting revenue-enhancing work sooner, but that it will also require a far smaller time commitment from IT people--remember, they really shouldn't be working on it in the first place.
Just as the local art store has no obligation to fix my paintings, IT professionals should not be put in a position of having to spend their time on projects that ultimately don't add any value. On-demand CRM gives organizations an effective way to save money by allocating their technical teams to projects that actually make sense for them to do.
About the Author
Christopher Cabrera is the founder, president, and CEO of Xactly, a leading on-demand sales compensation provider. He is a noted industry expert in issues relating to sales compensation and is the coauthor of the upcoming Sales Compensation for Dummies, and an accomplished painter. He can be reached at 1-866-469-2285. Please visit www.xactlycorp.com.
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