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Buy or Rent Your CRM Application? | |
 What
is Customer Relationship Management?
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Although a few adventurous souls could opt to develop custom CRM applications, few companies have the time, money,
or risk tolerance for this approach. The main choices today are to buy a software package or to rent a service hosted elsewhere on the Internet. Packaged CRM applications became popular in the mid-1990s and continue to be the first choice of most companies, although the underlying technology has shifted rapidly from client/server to Web-based.
The rise of Internet-based applications in the late 1990s also launched Application Service Providers into the mainstream of corporate consciousness. ìAn application service provider (ASP) manages and delivers application capabilities to multiple entities from a data center across a wide area network,î according to the ASP Industry Consortium. The question is, should you use an ASP for CRM applications? The answer is: ìIt depends.î ASPs are becoming popular because they enable companies to implement applications faster, with reduced capital expenditures, without competing for scarce internal technical resources. The ìneed for speedî is the biggest driver of all in our overheated competitive market place. Sometimes executives simply wonít wait for an application to be implemented in-house, even if the ultimate solution will be better. ìGet there firstî is the new mantra, which should help the ASP market become a multi-billion dollar market in the next few years, as marketing research firms predict. Yet ASPs are not a panacea for CRM. Some customers will be cautious about placing sensitive customer data in the hands of another company. Integration with in-house systems is also challenging. Standards are not developed yet to enable applications to ìplug and playî across the Internet. And for CRM applications in particular, creating a single customer view to guide all interactions or spot business trends is more difficult when using an ASP. Another consideration is that typically an ASP will align with a particular software vendor, concentrating on more popular products. Some software vendors also provide ASP services. Since ASPs are product-based, they focus on delivering those products. This gives them good bench strength and the technical skills for certain customization of that package for a customer. Strong product ties, however, could prevent ASP adopters from employing new technologies quickly and efficiently. Implementing changes through an ASP works well when modifying the product, but ASPs can rarely advise you on the impact that change has with other investments required for a complete CRM solution. Some ASP users have found that managing service levels around the complete solution becomes fragmented, since it involves multiple players supporting the components of a CRM solution. Despite these challenges, ASPs seem destined to play a key role in the CRM industry. They can rapidly provide the functionality of a complex software package and operate that product as you build a complete CRM solution. The key decision factors will be the available time and internal resources to commit to your CRM project. |
