When hosted CRM was first introduced, concerns were voiced about its drawbacks: the lack of customization, integration with other applications, support, third party storage, control over data control and the performance of service reps - not to mention the all-important security issue. Hosting’s biggest drawback is that your most important data is in a third-party’s hands.
Although CRM, as hosted solutions are also known, are not as difficult or as costly to install as packaged solutions, they still require an infrastructure, significant IT resources, and time to deploy.
Application integration has been another challenge for ASPs. Since ASPs unilaterally update their code bases, this opens the possibility that an integrated business process could be broken by a change that you don’t control.
Privacy and privacy laws are another concern: you must investigate what safeguards an ASP offers to protect your data. As you can see, hosted CRM isn’t perfect. Aberdeen researchers found that when considering these problems, support for hosting dampens. One way around this might be a hybrid approach: rent now, buy later.
It Does Not Have To Be Either-Or
Another emerging trend is that companies adopt hosted solutions as a low-risk way of evaluating a CRM solution’s capabilities before they buy into an in-house set up. This approach allows companies to mitigate risk and experience the benefits of rapid time-to-value. Once companies see a ROI, then they can choose to bring the solution in-house.
The decision between an in-house implementation and a hosted solution is based on many factors. It is important to evaluate your business plan, technology strategy, risk profile, IT budgets, IT resources, opportunity costs, customization requirements and industry-sector requirements.
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