Is CRM-As-A-Service Our future?

For those who viewed the SciFi Channel’s recently-concluded series Battlestar Galactica, you might recall the pilot episode that set the stage for the entire series.  You might ask, what does Battlestar Galactica have to do with CRM?  I’ll pull it all together later in this post, but now, back to Battlestar Galactica. As the pilot episode starts, we see an advanced human civilization living on planets called the Colonies.  On one of the planets, Caprica, an old Battlestar ship called the Galactica is being de-commissioned and converted into a museum.  Its usefulness appears to be long gone because its technology is a relic of a bygone age. The war with the robotic Cylon race ended over 40 years ago and nobody has heard from them since.  Things are about to change very quickly, though.

Within a few minutes of the inauguration of the Galactica museum, the Cylons emerge from their long 40-year hiatus and begin to attack. No problem, everyone thought, because all of the fighter ships have now been networked using the new state-of-the-art defense grid.  But as the Cylon attack progresses and one-by-one, all of the networked ships in the Colonial fleet are neutralized and destroyed by the Cylon attack, it becomes apparent that the Cylons have infiltrated the defense grid.  Within minutes, human life on the defenseless Colonies is annihilated.  The Galactica, being a legacy ship, was not connected to the defense grid and it is hurriedly put back into operation while the attack is under way. With a few surviving civilian ships, it and human civilization manage to escape total destruction.

What is the moral of the story, as interpreted by your friendly, neighborhood CRM consultant?  Dependence on a totally online model might not be a good idea if the network backbone fails.  Sometimes the old legacy product is the one that survives in all of the chaos left behind.  All too often, companies embrace new technologies and paradigms without evaluating the risks as well as the rewards.  On-Premise CRM is definitely the legacy technology, while CRM-as-a-Service is much newer.  Does newer automatically mean better, though?

With the CRM-as-a-Service model, sometimes the true costs are not apparent until it is too late and you are locked into a contract.  With many providers, if you reach a threshold of a certain number of users, you might pay more.  If your database gets larger, you might pay more.  If you have more than a certain number of emails sent per month, you might pay more.  To know whether CRM-as-a-Service will be cost effective, a company has to have an idea of what their requirements and usage estimates are.  Otherwise you could be in for a big surprise when your bill arrives.

In a CRM-as-a-Service environment, your data is only as secure as your host is.  Do you have easy access to your data if you needed to recover from a disaster or are you at the mercy of the host?  While a physical attack on the scale of the Cylon attack in Battlestar Galactica may seem remote, we have seen attempts by criminals and hostile governments to infiltrate commercial and U.S. government computer systems through cyber-terrorism.  What if your company’s confidential data were lost, corrupted or even made public because your host was compromised in some way?

On-Premise CRM systems can be compromised as well, but at least you know where your data is and you can back it up locally and even remove servers physically from the premises in the event of an emergency.  Still, there are other risks with On-Premise CRM systems. Unlike CRM-as-a-Service, where there are multiple redundant systems in place to maintain uptime in the event of a catastrophic failure, you are responsible for the infrastructure of your on-premise system.  Even if you outsource your IT department, the ultimate responsibility rests with you.

The CRM-as-a-Service model excels in its accessibility to the system wherever your employees may be.  If you have an on-premise system, you would have to create that remote access environment yourself.  The reliance on the Internet for the CRM-as-a-Service model has its drawbacks, though.  What happens if you have no Internet connection?  Does the online CRM product have an offline version that resembles the online experience so that you don’t have to train users in both versions?

Finally, the CRM-as-a-Service model normally includes software upgrades in the contract, while in an on-premise environment, you would have to purchase upgrades or software maintenance separately.

Whether you choose to adopt CRM-as-a-Service or choose an on-premise system, you have to pick the one that fits your business the best.  If you make the wrong choice, you might find out too late that you have been believing in a little science fiction yourself.

Tagged as: ACT! Contact Management, Contact Management, CRM, customer relationship managment, database management