When Customer Relationship Management software came into the picture somewhere in the 90s, they brought a radical transformation in the way businesses operated. Organizations started deploying CRM software for sales and marketing, data analysis and customer support. With its effective features and solutions, CRM systems made it possible for organizations to build and nurture long-term, manage leads, prospects, contacts and opportunities, track the sales activities, make accurate sales forecast, and generate automated reports.
Today, CRM adoption is as common as computers and the internet. However, with the evolution of CRM systems, its hosting infrastructure/model has also witnessed progression. Earlier, there was only on-premise CRM deployment that was available. Now, the organizations have a choice to choose between On-Premise CRM and Cloud CRM.
Before we talk about which of these is best suited for your company, you need to how they work.
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Contents
On-Premise CRM:
This is a model you need to buy CRM software license as per the number of users who would be using it. The CRM system database is installed on your organization’s servers. It is managed on-site and by an internal IT team.
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Cloud-based CRM:
This is a subscription-based model where the database is stored in the cloud or simply put, on the internet. The database is hosted on third-party servers. It is managed by the cloud-based CRM
service provider.
Now that you know the basic difference between on-premise and cloud-based CRM, let’s determine which one is right for you.
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On-Premise System Giving Way to Cloud-CRM
According to a study, 88% of CRM software operated on on-premise infrastructure in 2008. Today, 87% of CRM systems are cloud-based. Do you need any more proof as to why cloud CRM is gaining popularity? But, if you are still apprehensive, the following advantages of cloud-based CRM will clear your doubts:
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- Lower upfront cost as it saves expenses on software license purchase.
- The installation, maintenance, upgrades, back-ups, integration and resolution of technical glitches are the responsibility of the vendor.
- Quicker deployment process.
- The flexibility of payment – you can increase or decrease subscriptions as and when required.
- Data is accessible 24/7 anywhere and anytime.
- Useful to create a mobile CRM application.
On-premise CRM is an expensive and tedious affair. The only benefit it offers is that you have the complete control and security of your systems and data.
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Efficient Customer Management in Cloud
Customer relationship management becomes effortless and seamless with cloud-based CRM software solution. Your sales rep can access it on the move from anywhere on any device. They can quickly find customer contact, shoot them an email or create, send and modify sales to tap into a potential business opportunity promptly. They can also update records and share information with their teammates instantly. Cloud CRM can help create personalized marketing campaigns and customer experiences as well as store customization.
On-premise CRM can be accessed only through a location or IP address-based control. It doesn’t offer on-the-go benefits like cloud one.
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Number of Users and Accessibility
If there are only a few users and business doesn’t need CRM out of office site or working hours, you may consider on-premise deployment. However, if the business has large teams requiring round-the-clock or unlimited access anywhere and anytime, then it definitely makes sense to use a cloud solution. The beauty of cloud CRM is that you can pay as per your usage and users and on a monthly or a contractual basis.
Moreover, cloud-CRM can be leverage even on mobile devices. With an increasing number of customers accessing their business on smartphones, it is imperative that you send them mobile-friendly communication. Mobile CRM is also good for your business. For instance, it can boost sales productivity and improve sales pipeline. In fact, a study revealed that mobile CRM increases sales productivity by an average of 14.6% and 3 in 10 mobile users even registered 20% improvement in their productivity!
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IT Support for Deployment
On-premise CRM also poses challenges to your business in terms of IT capability. It requires a dedicated IT department, 24/7 support and of course, a huge budget. Now, how many businesses can afford this?
The need of the hour is making CRM more accessible to businesses of all sizes, especially small businesses and startups. Statistics show that 91% of organizations with over 11 employees now deploy CRM. Given its benefits and the fact that it can be outsourced at a lower IT cost, an increasing number of small businesses are beginning to adopt cloud CRM.
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Business Needs
Small businesses have a strong focus on growth, expansion and scale. They go through major changes as they grow. They need CRM systems which can enable them to address their business needs on all these three fronts with flexibility. On-premise CRM has limitations on this front in terms of cost and other resources – you need to infuse more capital. However, cloud-based CRM can be scaled and customized without incurring much cost.
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Data Transfer and Security
The fact that on-premise solution is more secure than cloud can’t be overruled. Your data stays on your premises. But, having said so, it is still vulnerable to employee frauds or carelessness. So, the element of risk is as good as that in cloud-based CRM. The security concern in cloud CRM can be easily taken care of by partnering with a trusted, well-established and reputed vendor. Understand the security features offered by the vendor in detail – the CRM systems should use encryption techniques, have multi-factor authentication for logins and offer customizable security control and access levels.
Cloud CRM is the future of all businesses, irrespective of their size and nature. The sooner you adopt it, the better it is.
