User adoption challenges is a common reason for CRM failure.
Mobility and partner management are other trouble spots.
Many hosted CRM implementations have gone into production in the course of two to three weeks, as compared to licensed CRM implementations that can take several months.
But it's not entirely plain sailing and there can be problems with Cloud CRM too.
Is Cloud CRM the solution to the well-documented list of problems experienced by CRM deployments? A new study has reported its findings.
The long history of CRM failures has been well-documented, but could Cloud CRM deployments be the answer? That's the question posed by a new report from AMR Research – Cloud CRM: Lessons learned.
“CRM continues to be one of the major enterprise application segments, and, for many companies, it is key to their interactions with customers and partners,” argues the report's author Chris Fletcher. “However, the segment has not been without its challenges. It acquired a bad rap for several years as companies experienced lengthy implementations that expanded requirements for systems integration services and saw declining end-user acceptance.”
Reasons for failures according to AMR are varied, but hotspots include “significant user adoption issues/challenges,” in several common CRM sub-segments, including SFA (68%), mobility (64%), and partner/channel management (61%). For all of these pain points, Cloud CRM can offer a potential solution.
According to AMR's own research, CRM is the applications category that seen has the most traction in the Cloud on the back of the success of SaaS vendors such as Salesforce.com,. NetSuite and Zoho. But is Cloud CRM really any easier to get right than traditional on premise deployments? And are all CRM requirements met by Cloud offerings?
Fletcher notes that the 'quicker, easier, cheaper' claims made by Cloud CRM providers are true in many instances. “Many hosted CRM implementations have gone into production in the course of two to three weeks, as compared to licensed CRM implementations that can take several months. least in the short term,” he notes, adding: “If success is defined by the CFO as managing cash flow, cloud CRM comes out ahead, at least in the short-term.”
“Driven by high annual maintenance costs and current economic conditions, many companies are exploring
alternatives to licensed CRM application suites,” he adds. “Cloud CRM is directly benefiting from the current challenging economic climate because it can help reduce these budget line items.”
No plain sailing
But it's not entirely plain sailing. Fletcher warns: “Cloud CRM can in fact deliver basic SFA functionality more quickly and with fewer required resources than a licensed alternative. However, the needs analysis, design, and mapping of CRM processes still remains complex, still takes time and management involvement, and will not necessarily be more easily solved in a hosted or cloud CRM environment than with a licensed alternative.”
The research firm urges users to approach Cloud CRM adoption on a case by case basis and based on a needs assessment. Think “horses for courses” when deploying Cloud CRM,” urges Fletcher“ Identify application areas where user adoption is critical (SFA needs), or where incremental costs may be difficult to justify (mobility).”
AMR identifies a number of situations in which Cloud CRM fits well. These include:
- Applications or organisations that are highly distributed
- Applications that are relatively simple, such as basic SFA forecasting and customer record management
- Applications that are relatively simple
- Business divisions, including third-party channels, that can’t justify or refuse to make a large development or infrastructure investment
“A compelling cloud solution is one that requires no server or application investment and in which the partner and manufacturer are on the same application (for example, to share and track leads),” suggests Fletcher. “Cloud CRM can excel in instances where IT infrastructure and resources are minimal, and where a global, licensed CRM standard may be difficult to enforce.”
But a more realistic option for many end users will be the adoption of a hybrid CRM architecture with a combination of Cloud and on-premise application. “Cloud CRM can coexist with licensed CRM applications in a hybrid CRM architecture, and it does not have to be a winner-take-all solution,” advises Fletcher. “A majority of companies deploying Cloud CRM have other CRM vendors implemented and long-range architecture plans that continue to accommodate both models for the foreseeable future. Integration with back-end systems is usually easier with a Cloud CRM service, in part because of the newer web services architecture that all cloud CRM applications employ.”
Overall, AMR concludes that Cloud CRM offers an additional deployment option that will help kick-start investment. “Even in this economy, companies are investing in CRM.” suggests Fletcher. “We believe companies should restart stalled CRM investments, and Cloud helps with this. Consider that the lower cost of Cloud CRM, especially in the design and initial deployment stages of a project, may enable some projects that couldn’t be previously cost justified. Re-examine internal CRM opportunities and proposals in a new light.”
The full Cloud CRM: Lessons Learned report is available from AMR Research.