Information Implications of Hosted CRM

From MIKE2.0 Methodology

With the Customer Relationship Management (CRM) market expanding and analysts betting that the "subscription revenues" to be approximately 22% of a $10 USD Billion CRM market by 2010. Based on this growing trend in CRM many IT professionals have begun to comment on the considerations in making this strategic decision between Hosted and In-House CRM.

Defining Hosted CRM

Hosted CRM has been used to describe the approach where a company outsources its CRM systems and functions. In-house CRM, on the other hand, has been the model traditionally adopted by larger organizations, with a tailored on-premise implementation. Hosted CRM solutions are where the software or technology solution and IT support function is outsourced, with subscription costs for maintenance, support, upgrades and training. This approach is not limited to CRM and is referred to as "Software as a Service" (SaaS) by the wider IT community.

Decision Criteria for Hosted CRM

In considering approaches to CRM, organisations are looking to best align their people and systems with operational and strategic objectives including a focus on improving customer service, revenue uplift and flexibility with speed to market.

There is a great deal of importance with ROI on subscription vs implementation, and related delivery and operational costs, but fundamentals that drive business value with the view of customer across the organization and systems is an important aspect of the business case.

Questions are asked on functionality or out-of-the-box features supported by a CRM system, however the ability for CRM to integrate into an organization’s overall Enterprise Data Management Strategy and Solution will underpin the achievement of these objectives.

Organisations are asking "what are the important considerations with Return on Investment (ROI) with out-of-the-box (OOTB) hosted solutions compared to in house solution implementation?"

Some of the key considerations and questions that should be discussed along side the common OOTB and ROI aspects are:

• What are your data integration requirements? Do you need to take data from multiple sources and can you move between the "in-house" and "hosted" solutions with ease?

• Do you have a future state vision in place for information management and does the implementation approach align to this vision?

• How important is Business Intelligence (BI) and does the CRM implementation support business decision making tasks by feeding into shared Information Repositories?

• Is your organization governed by regulations and does you CRM system need to conform to these regulations?

Although is this by no means an exhaustive list of considerations, it illustrates that in parallel with a comparison of vertical solutions provided by vendors (hosted, and in-house), there is a need for alignment with an overall information management approach.

Relationship of Hosted CRM to MIKE2.0

MIKE 2.0 takes a holistic view of information management and the holistic approach can be leveraged in order to assist in strategic planning and CRM solution selection whilst not compromising the overall strategy currently in place.

Customer data and information is a critical element. Solution, functionality, and data should come together to allow an organization to understand its relationship with the customer. Access to data across the organization, ownership and quality can influence whether to host, go in house and especially in moving from in house to hosted or vice versa. In relation to the latter, with the evolution of a highly contestable CRM solutions market a key challenge will be with information management and migrating data.