All about Cloud-Based CRM from Chris Bucholtz, Sugar CRM

By Chris Bucholtz, http://www.sugarcrm.com/crm/

Cloud computing has created something of a golden age for CRM. Never before has CRM been so accessible to so many businesses – especially a smaller business that, in the past, lacked the resources needed to implement it.

While this accessibility should be celebrated, there is also reason for caution. The cloud is a new phenomenon and not all of its pitfalls are well known- especially to the line of business people who typically make decisions about CRM.

The first is a very basic failure to understand what the cloud is really about. Because of the many competing messages marketers have been floating in the recent past in order to attach their products to the trendy terminology, you could excuse a businessman for thinking the cloud was a piece of hardware, or a Software as a Service (SaaS) product. In reality, it is neither; the cloud is a global, distributed and virtualized computing ecosystem and the software optimized to take advantage of it. Hardware, software and the underlying transmission infrastructure all play roles.


Failing to understand that may saddle you with a last-generation SaaS-based solution that doesn’t deliver the near-term savings a cloud-based solution can provide. Those vendors built their own datacenters and still must manage them; this overhead is reflected in their prices. Without understanding the cloud, you could find yourself thinking that your CRM was cloud-based when in reality it was not.


Marketing issues aside, there are two other concerns that you should keep in mind when deciding whether to take your CRM to the cloud. First, you need to understand the privacy laws surrounding customer data in the country or countries in which your business operates. Some nations forbid the storage of customer data – or some specific types of customer data – outside their borders. This can make using the cloud for CRM illegal if it is not approached correctly. In regions like South America, it can be especially frustrating; a company operating in three countries that share similar cultures and the same language can find itself dealing with three sets of laws regarding data storage and privacy.


“Private clouds”

This obstacle is not impossible to overcome. First, you must learn the laws of the countries in which you operate. Then, you need to work with your IT department (or a consultant experienced with your region) to develop a strategy for using the cloud without infringing upon those laws. “Private clouds” can be used in conjunction with public cloud computing to keep data within the boundaries of the law. A private cloud is a virtualized data center that resides within your company’s firewall, or it’s a private space dedicated to your company’s data within a cloud provider’s data center. Whatever the case may be, it can isolate and control data so that its physical storage is not outside of national borders, yet it can be accessed in the same manner as any cloud computing data.


The other issue that can impact a cloud CRM implementation is budget. While the cloud minimizes up-front costs and allows small businesses to embark on CRM efforts without serious financial strain, there is a point – two to three years from the start of the engagement – when the amortized cost of an on-premise solution drops below the monthly fee charged for a cloud-based solution. When that happens, there can be a perception within the business that you’re paying too much for CRM. In reality, the conveniences provided by the cloud – offloaded security and back-up duties, reduced IT staff overhead and hardware costs, and even real estate savings thanks to the lack of a need for a datacenter – are appealing even to large businesses. But some businesses will want to migrate to an on-premise solution sometime in the future. The answer to this is to look to vendors who have both cloud and on-premise versions, preferably those who can already articulate the process for migrating from one to the other.


These concerns are business, legal and IT concerns – and, if handled appropriately, they will never impact your customers’ experience with your business. As with all CRM implementations, developing a strategy that takes into mind your business’s unique needs, processes and goalsbefore you make any technology decisions is vital for success with cloud-based CRM.


By Chris Bucholtz, http://www.sugarcrm.com/crm/