Choosing between Software as a Service (SaaS) or On-Premise CMS

The first choice you have to make in your CRM decision is whether you want your software to live in the cloud or reside on servers in your office.

For most businesses, choosing a cloud service, or Software as a Service (SaaS), makes the most sense for a number of reasons. If you really must go on-premise, be aware of the costs and risks of doing so before you head down that path.

Going with SaaS CRM

There are a lot of good reasons why you want to go with a vendor that provides Software as a Service. It’s what I (and most people in this industry) recommend for any business that doesn’t have legal or security requirements to keep servers in an office.

The advantages are

• Easy to start: With SaaS, you can instantly provision your account. Vendors are set up so that the account creation process is just a matter of signing up online and paying for a subscription. The account creation process usually takes a few minutes.
• Easy to upgrade: Good SaaS providers design their networks so that upgrades are fast and painless. Most of the time, upgrades to your software happen automatically. If something significantly affects the way you see or use the system, the vendor may send you an alert or a newsletter, but the process should be fast and easy.
• Easy to access: When software natively resides in the cloud, it’s available from anywhere. If your salespeople are on the road, they can update contact records and record meetings. If you have people working from home, they can still be productive. If your managers are traveling, they can still see what’s happening with the business.

With SaaS, it’s not all about the advantages. When you can access your data from anywhere, it’s important you know exactly who can access what. You want to make sure your data can’t be exported without your explicit consent. Any upgrades to your software are also likely to be on the vendor’s schedule, and not yours.

Choosing on-premise CRM

If your customers have security requirements (for example, government contractors) that prevent them from putting their data in the cloud, you need an on-premise solution. With data stored at your facility, you control who has physical access to the machines that house your CRM.

However, on-premise CRM requires a lot more effort to install and maintain than SaaS. Expect significantly higher costs and longer schedules to implement your CRM, because you need to host dedicated hardware and protect it with state of the art firewalls and data encryption.

Building vs. buying a CMS

The world is littered with companies that believe they can build their own CRMs. Stop before you act on “I should have my own developers build our CRM, because they understand our business better than any third-party vendor can.” It’s a common misconception that CRM is an easy application to program; don’t fall into that trap.

Building CRM is hard, and it’s very different from what most companies do. Having your team develop something technical that is not your core competency is a recipe for disaster. This second decision should be easy, but if you insist on building your own CRM, be sure to expect it to cost ten times more than what your developers tell you, and take at least a few years before you have something you can use.

Why should you not choose to build your own CMS? Because you have to get a lot of elements exactly right, particularly if you attempt to build your own Complete CRM. Including the following:

• Infrastructure demands: You need enough bandwidth and server horsepower to make your software fast enough for your employees to use.
• Upgrades: Times change, your requirements will change, technology will change, and if you don’t have a team dedicated to managing that change, you will be behind the moment you have a working prototype.
• Support: As you implement your CRM to your employees, you will have to train your staff on how to use it, which will be expensive. If you want to ease the burden on your developers, you’ll need to hire people to document and produce educational content.
• Channels: Developing CRM may sound simple at first, but to make it useful, your developers need to have a deep understanding of sales processes, marketing, and operations. Developers are never taught these business principles and have to interpret your business requirements, which is a long, complicated process. They also need to link these channels together, which presents a spider web of knowledge connections they also have to learn.

In short, if you build your own CRM, plan for it to take years and millions of dollars of productivity. Enough CRM platforms are available now; it’s a rare case where building your own makes sense.

Software development is a science in and of itself. There are methods of development, managing development, communicating requirements, and building architecture that are much deeper than most realize. Building a CRM software platform is no small feat, and the number of moving parts required to make it work can take years. Given the speed that business moves, building a CRM solution is taking a huge gamble.

Buying software is not something to be taken lightly either. Sometimes companies have the attitude of “let’s just try this and see if it works.” This lackadaisical attitude almost certainly ends in failure. After your organization makes the decision to move to a Complete CRM implementation, do it right. Decide what you need, pick the software, and see it through.