Open Source as a Driver for CRM Innovation
The upside is a high level of flexibility.
Posted Jan 28, 2008
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With the success and wide deployment of RedHat, Apache, mySQL, etc., open source has become influential within the enterprise technology landscape, primarily in terms of infrastructure. Over the last couple of years, several strong open-source products and projects have emerged in the CRM business application space, beginning to challenge parts of the traditional CRM market by providing functionality and suitability for enterprise integration and, most important, an ecosystem of integration services and support offerings.

The traditional CRM market consists of three partly overlapping segments, each with its own advantages and drawbacks:

  • Products focusing on large enterprisewide CRM deployments (e.g., Oracle and SAP) provide a large set of industry- and/or domain-specific functional features, yet have high per-user license costs; a feature overkill where only parts are used; and a heavy "project infrastructure" in terms of system and business process implementation.
  • Products focusing on deployments at small and midsize businesses (SMBs) or business units (BUs) tout a focused set of domain-oriented features and limited industry focus, but they don't scale well across domains, and functional extensions are costly due to vendor and technology lock-in.
  • The software-as-a-service (SaaS) offerings, also focusing on the SMB/BU segment, have good functional offerings and a pay-per-user model. However, SaaS solutions tend to become relatively expensive in terms of total cost of ownership as user population grows and additional features are required. In addition, many companies are uncomfortable with external data ownership and the high costs for integrating additional systems.

Open-source CRM projects and products are becoming an attractive fourth alternative in the CRM solution space. While premier open-source products -- such as SugarCRM and Concursive's Concourse (formerly CentricCRM) -- cannot compete head-to-head with the enterprise CRM products such as Oracle's Siebel, they provide a broad functional offering across the core CRM domains. This offering is compelling and increasingly competitive for the SMB and BU implementations, while being free from both the license costs of installed software and the subscription model of the SaaS products.

The real upside with open-source CRM products is the high level of flexibility provided through open source code, modular components, and standards adherence. This flexibility enables companies to easily adapt the technology to achieve true usability, which, with commercial packages, is something that can only be achieved with high levels of effort and cost.

Additionally, open-source CRM products can be assembled like building blocks for solving specific business problems. These building blocks come with a core set of functionalities and each can be enhanced to meet specific business requirements. The different building blocks are easily integrated through the use of open-standard technologies, and additional features can be custom developed in a modular way.

The following examples demonstrate how open-source CRM products are being assembled as new, innovative solutions:

  • A French travel company implemented a brand new Web presence and go-to-market approach, integrating the osCommerce e-commerce modules with open-source CRM for customer data management, online product management, partner transaction management, and email campaign management.
  • A Swiss government department is implementing a solution to improve the efficiency of the process for issuing work permits. Open-source CRM provides the relationship management features, tightly integrated with legacy billing systems and another application for document storage, workflows, and approvals.
  • Many companies are struggling with getting transparency into their Web-based demand-generation activities such as marketing and sales. Combining a lead-generation tool with open-source analytics and a CRM application provides the core features required to address the online demand-generation challenge and serve as a flexible platform for situation-specific extensions.

Open-source CRM products have matured rapidly over the last few years. They offer true benefits in terms of a base set of features at a very low cost, which can be subsequently enhanced to meet very specific needs without the limitations inherent in proprietary products. Thus, open-source CRM opens up many new possibilities for addressing specific business issues in a cost-efficient manner, either as a standalone CRM solution or as building blocks in more-complex solutions. The approach is suitable for the SMB segment, as well as for the large enterprise, and offers the required business agility to compete in an increasingly fast-paced and competitive market space.

About the Author
Thomas Lundqvist is the CRM and self-service solution lead at Optaros. He has more than 10 years of IT consulting and systems integration experience, playing lead roles in both business development and project delivery. Thomas's success with CRM project deliveries reinforces Optaros's reputation as an international consulting and systems integration firm that designs and assembles fully supported, Next Generation Internet solutions that deliver superior business performance. He resides near Zurich, Switzerland.

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