Today’s Customer Relationship Management (CRM) solutions aim to recapture the personalized customer service provided by local momand- pop shops of yore – except with high-tech-analytics capabilities, collaborative platforms and automated processes. By gathering information from multiple data sources and storing it in a centralized location, a hosted CRM solution provides a holistic view of a customer in real time. Armed with this insight, a company’s management, sales and service people can better generate leads, target top customers, manage marketing campaigns, drive sales and boost customer satisfaction.
The bottom line with hosted CRM solutions is that they provide an efficient way for businesses to bolster customer loyalty while reducing operating costs and increasing overall profitability. In this Buyer’s Guide, you will find details on what to look for, how to buy, what you can expect to pay, and how to derive the most value from your hosted CRM investment.
Hosted CRM Overview
A CRM solution is a software application that allows users to access important data, ranging from a customer’s account balance to past purchases, through a single source in real time. Beneficial to countless departments within a business, most CRM solutions include these primary applications:
- Sales Force Automation: Empowers sales representatives with immediate insight into customer buying patterns; helps managers better forecast future sales; allows companies to adjust production cycles based on real-time sales figures; enables accurate assessment of the sales team’s performance.
- Marketing: Helps marketing executives better manage and design campaigns, adjust budgets, link revenue to specific advertising initiatives, create targeted campaigns, and assess campaign results.
- Service and Support: Enables businesses to provide prompt customer service, accurate product support, call-center service and proactive IT help-desk assistance.
- Analytics: Generates real-time, graphical and customized reports so that businesses can better allocate resources, gain strategic insights and optimize enterprise performance.
Hosted vs. On-Premise CRM
There are two primary types of CRM solutions for businesses: hosted CRM and on-premise CRM. Hosted CRM (also known as ‘on-demand CRM’) entails a company outsourcing a portion or all of its CRM functions to an ASP (application service provider). Unlike licensed on-premise CRM software, hosted CRM tools are payable on a monthly basis without requiring complex implementations or the assistance of an in-house IT team. The result is a cost-eff ective solution that promises to deliver a quick ROI (return on investment), while freeing a company to focus on its core competencies.
In fact, according to a study from Nucleus Research, more than 80 percent of companies that outsourced CRM achieved a positive ROI. The study reported that problems with the on-premise CRM model include high software and consulting costs, ineff ective user adoption, and poor management.
But for all its promises of immediate payback, the hosted CRM model does have its shortcomings. For one thing, whereas on-premise CRM solutions can be tailored to the particular needs of an organization, ondemand solutions don’t allow for the same degree of customization. What’s more, on-premise solutions are easier to integrate into a company’s existing business processes and applications.
For small- to medium-size businesses, however, the price is right when it comes to hosted CRM tools. By paying per user per month, a company can gain access to a sophisticated application in a mere 30 days without having to burden its IT department or cut off its cash fl ow. And of particularly good news to growing companies is the fact that today’s on-demand CRM solutions are highly scalable and easy to upgrade.
Market Overview
According to technology market analysts at Forrester, the CRM market is poised to hit nearly $74 billion in sales in 2007. CRM applications represent about $21 billion of that market, with services making up the rest. With so much money to be made, it’s no surprise the CRM landscape features scores of players, from up-and-comers to industry stalwarts. Key vendors include Amdocs, PeopleSoft, Salesforce.com and Siebel Systems, to name a few.
