Compare Hosted CRM Systems to Hybrid Ones

By Stan Baldwin
Updated: August 22, 2011

For many years the choice of a Customer Relationship Management (CRM) system for large, complex, organizations was a no-brainer, it had to be on-premise. The benefits, including unique features which supported specific business operations, functional integration across the company and the best available security, didn't compare to the lower cost, but restrictive features offered by service vendors. However, the pressure to reduce costs never goes away and service providers of all stripes have been wrenching like mad to address every perceived short-coming of Software-as-a-Service solutions.

While strong arguments for maintaining full control of your CRM system by keeping it in-house can still be easily formulated, the attraction of only paying for what you use by farming out the tasks of building and maintaining your CRM is compelling. What has changed over the past decade or so has been the capability of the service providers.

A hosted CRM system can be arranged in two fundamental ways. The all-out version has a service provider configure an existing CRM platform to match the requirements your company specifies. After which a fee-for-use, typically monthly “rent” per user, is charged for delivering the CRM service and keeping it running. The software license fees are included in the month assessments. Because the specific configuration is designed for only the client company, it is possible to create a highly secure system well-integrated with all appropriate business functions.

The other approach generally involves more on-going client involvement in the operation. Your company chooses the software package, buys the software licenses and is the primary architect of the desired functionality. The hosting company delivers and administers the CRM service across the net.

As should be expected, costs, functionality and security can vary substantially with each specific implementation. Though less of an issue than it was only a few years ago, the security of your customer database remains important. The old “customer list” is now a “customer profile”, both vastly more detailed and equally more valuable. How comfortable are you with it residing on a server somewhere in the “cloud”? Only slightly less important may be the reliable operation of certain functional abilities that need to be maintained or up-dated in real time. Having these at the end of a string of internet server hops could be cause for the occasional sleepless night.

A hybrid CRM might ameliorate some of the worries. A hybrid CRM has some functionality remaining on-premise and under your direct control, while contracting with a service provider to deliver and maintain other portions of the complete CRM system. Since the whole thing is built for your company, and only used by your company, security is comparable to a fully in-house system. Yet, one of the most attractive features of Hosted CRMs, their flexibility and accessibility, is also part of the deal.

As with all major systems supporting your business, the better you understand how your business works and where you want to take it, the greater your ability to make the right choice for your CRM system.

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