Rarely does a business solution exist that meets the needs of all organizations, applies to every use case scenario, and fits every specific workforce, labor, and operational requirement. To this end, the decision to invest in a specific technology option, in this case a cloud-based or on-premise CRM software solution, is entirely unique to each company, and the path to implementation will look different for each executive, though the end goal may be universal—to streamline and simplify customer relationship data across the enterprise. Before investing, it can be helpful to take a look internally at current (and future) infrastructure goals, resource availability, and other factors and considerations that can help steer your decision. Let’s take a look at some of the major points to consider when deciding which model is right for your company:
From the inside Out: Starting with Infrastructure
In the cloud versus on-premise decision, a major consideration is how a new CRM investment will disrupt or augment current infrastructure conditions. Mature organizations with existing infrastructure and up-and-running data centers may benefit most from an on-premise model, through which they can continue to exercise hands-on data control and oversight, utilizing best practices already in place and familiar to IT teams. In addition, by moving forward in this capacity, these companies can help offset some of the front-loaded capital expenses traditionally associated with on-premise CRM models, as a majority of these costs are already covered by the existing data center.
Conversely, cloud-based CRM models, designed to meet and support a variety of scaling demands, may better serve new and/or true startup businesses seeking to reach a substantial impact almost instantaneously. Yet, if these businesses are in highly regulated industries, such as healthcare or financial services, investing in a cloud-based model may require additional considerations around data integrity and security, and in this case, a hybrid model, in which some functions remain on-premise and others are controlled via the cloud, may be the best option moving forward, as it enables the flexibility to decide how information operates within and outside of internal jurisdiction. In all, proactively aligning infrastructure conditions with system requirements before making the jump to a CRM solution can help ensure the selected system is best suited to work within both current and anticipated operating conditions.
IT Implications: Matching Team Resources to Requirements
Another internal factor to consider when deciding whether a cloud-based or on-premise model is the best fit for your business is the current state of your IT team, and how its availability, bandwidth, and skill sets are matched to each deployment option. For instance, for companies with staff that are most comfortable and experienced working in on-premise scenarios, an on-premise CRM model may be most beneficial, as it will eliminate or greatly reduce the time required to train employees on daily operation and maintenance. On the other hand, for organizations considering cloud-based scenarios, some may opt for a hybrid model, keeping specific operations, such as routine maintenance functions, assigned to internal IT resources, while allowing cloud-based functions to be performed by software-specific technical experts, and others, notably ones without dedicated IT resources, may opt for a system managed entirely by external control—enabling a leaner business model but potentially limiting the extent of customization, control, and security available. Across all instances, of chief consideration is ensuring the chosen software solution optimizes, rather than taxes, IT resources, and allows a balance between routine technical responsibilities and CRM-specific tasks.
Up and Running: Expectations around Downtime and Customization
Utilizing your CRM solution to its fullest potential requires taking into account both how it will operate and to what degree your company can control and customize this operation—and how both considerations will affect your current mode of doing business. Of top importance is downtime—how often will your teams experience known, recurring, critical periods of high activity that require 100 percent uptime? If the answer is routinely, as is the case for accounting firms during tax season for example, an on-premise CRM solution is optimal, as it allows you to schedule and carry out routine maintenance and upgrade procedures around your preferred timeline, whereas in a cloud-based model, these decisions are typically left in the hands of an external provider (though most are upfront about system availability, providing updates so companies can plan in advance). The upside of the latter scenario is that it frees IT resources from handling such activities, and in companies for which downtime is of lesser consequence, this model may be appropriate.
Yet, downtime isn’t the only customizable aspect enabled by on-premise models—a majority of solutions also allow companies to integrate the software with complex, existing business operations and adjust specific features as needed to create a seamless deployment, a feature extremely beneficial for meeting a business’ unique use cases and goals. However, for companies simply wanting to utilize the software in its “out-of-the-box” configuration and operation, cloud-based solutions are appealing in their ease of use, though such models can significantly limit the degree of control over and refinement of granular elements within the software, a capability essential to optimizing the powerful functionality available through complex, integrated, and interdependent software solutions such as CRM.
Under Wraps: Factors around Data Security and Control
While not comprehensive, one final factor in our list of considerations in the cloud versus on-premise CRM debate is the degree to which a company requires data access, transmission, storage, backup, and restoration. One significant advantage of on-premise models is that by keeping control on-site, companies are able to enact rigorous procedures around such requirements, with many opting to enable off-site redundancy as backup in the event of a catastrophic incident. Alternatively, while cloud-based CRM models such as SaaS often feature robust application control, Gartner reports that end users rarely use them, leaving the organization vulnerable to myriad concerns around data security and exposure, and also raising issues around data control, as a recent Gartner survey reveals that “lack of visibility into who is accessing your data and applications” is a chief concern, cited by more than 25 percent of executives.
Making the Call: Weighing the Options for Success
The above considerations are meant to serve as conversation starters and catalysts, helping companies build their case for or against a given CRM scenario. In addition to an analysis of the specific features of a CRM solution, companies should also carefully consider how each option fits into their current business model, and to what degree it can help them achieve future goals, optimize operations, and reduce extraneous expenses. By looking internally, companies can weigh the pros and cons of each alternative against the current operating model and use this data to direct—and drive–the final decision.
Heiser, Jay, “Everything You Know About SaaS Security is Wrong,” Gartner, April 24, 2014, 4-6.