The Downside of Hosted CRM is Explored, Options Offered for Decreasing Costs and Optimizing the Long-Term Benefits of CRM in New Article and Webinar

DUBLIN, Calif.--Though many companies are jumping on the on-demand CRM bandwagon – attracted by the benefits of tighter control of data and costs – many are also jumping off. A recent article titled “Ten Things the On-Demand CRM Vendors Don’t Want You to Know” examines the downside of on-demand CRM, and what those vendors should disclose to buyers.

A Webinar from an IT service management and CRM market leader, FrontRange Solutions, the report’s sponsor, reviews the article’s issues in deeper detail.

As with the increasing demand for organizations to do more with less resources, the price tag is chief among the issues in opting for or switching to an on-demand CRM system. According to the article, an on-demand solution will cost more in the long term, especially without on-site implementation. Over the long run, the costs of on-demand solutions can add up to a higher total cost of ownership, and this is particularly true due to the high per-user costs that customers get locked into for the duration of the contract term.

While an on-demand solution may offer a slightly faster ramp-up, ultimately it increases costs and reduces the long-term benefits of CRM, according to the article. However, a professional services group can help ease implementation to provide the CRM solution that is right for an organization at a fraction of the cost of an on-demand solution.

Additionally, hidden expenses can result from attempting to integrate on-demand solutions with other applications. While some users of leading on-demand solutions have achieved ROI, it’s a longer payback period. One-third of users interviewed for the article reported that they would consider moving to another solution with better functionality or a lower price.

The article’s findings include:

• On-demand solutions do not have a reputation for simple integration with other business-critical systems. Part of the discovery should include finding out if there is a need to purchase additional middleware, or invest in extensive coding, to integrate the on-demand CRM with other applications.
• On-demand users are locked into typical one-year contract for the solution. Once locked in, there can be unexpected expenses for customization, integration and storage. Customers often start with one module, but realize they need the professional module instead of the basic.
• Key automation may be missing as some on-demand applications lack this critical functionality, resulting in process gaps and bottlenecks.

“We talk with many companies that learn too late of the limitations of on-demand CRM,” said Paul Petersen, Senior Director of the GoldMine® Business Unit for FrontRange Solutions, and the article’s author. “On the surface, on-demand CRM is compelling and seems to offer incredible benefits. Yet, an increasing number of organizations that tried on-demand applications have returned to an on-premise solution, and we want customers and partners to be as informed as possible about the options for cost-effective and mission-critical CRM.”

About FrontRange Solutions

FrontRange Solutions develops award-winning software and solutions used by more than 130,000 companies and over 1.2 million users worldwide to manage a wide variety of business relationships and provide exceptional service. FrontRange product families, designed specifically for small-to-medium-enterprise (SME) and distributed enterprise organizations, include: GoldMine® for business relationship management, team-based contact management and sales force automation solutions; IT Service Management with HEAT® and ITIL® standards-based modules for complete service management; Communication Management including IP Contact Center for reduced telephony costs and increased agent productivity, streamlined customer service and communications; and Infrastructure Management, which provides the ability to optimize the full lifecycle of a company's assets. Customers representing 44 percent of the Fortune 100 and 76 percent of the FTSE 100 include Coca-Cola, Shell Oil, Prudential Securities, Électricité de France, Mack Trucks, Campbell Soup, Avaya, Bechtel Corp, Bank of America, and Turner News Network. For more information, call 800-776-7889 or visit www.frontrange.com.