On Premise CRM Buying Tips

By Jelani Harper
Updated: May 13, 2011

There is a definite shift in consideration for the purchasing of an on-premise Customer Relations Management system, as opposed to that of the hosted, on-demand variety. The nature of the on-premise product, which is entirely housed and operated on a company’s own property, requires a greater regard for a business’ in-house information technology team. Additionally, the significant difference in cost between the two types of CRM products—hosted CRM are paid for in relatively low monthly installments while the purchasing of hardware and software for the on-premise version necessitates a substantially higher initial cost—also places a greater emphasis on the negotiations involved in the actual purchase.

IT Concerns

It’s best to fully evaluate the capabilities of a company’s IT support system before purchasing an on-premise CRM. All facets of installation, operation, maintenance, integration, and hardware and software updates are typically performed by the company itself, unlike the service support plans offered as part of hosted CRM products. Consideration should be given to an enterprise’s present system requirements to ensure that its IT team will be able to implement it with the selection of a particular CRM. Additionally, employers should be aware that both IT specialists and relevant company employees may require training to enable a smooth transition to the new product—how much and how costly it will be, of course, depends upon each specific CRM.

Negotiation

A number of key tips can assist companies in the negotiation of the purchase of an on-premise CRM, which requires a substantial amount of capital to procure and is a significant component of the vendor selection process. In addition to detailed on-site demonstrations from sales representatives, businesses should also seek a trial phase (ideally of both hardware and software) to better gauge how effective it will be for their specific customer relationship needs. Advanced research should enable businesses to determine a CRM proprietor’s standard rate of discount, which should be requested during pecuniary negotiations. A willingness to offer one’s company as a reference may further decrease the initial price of an on-premise CRM, while other points of negotiation should include reduced rates for upgrades and training, as well as for consultant and implementation costs.

As is the case when considering the buying of any CRM, companies are advised to research their own specific needs, prognosticate those for the future, and evaluate each individual vendor based upon its capacity to fulfill those requirements. Product reviews of a company’s history, features and testimonies of other customers should sufficiently provide this information.