Web Based CRM Software (such as sales force automation on the web) features a number of benefits when compared to traditional on-premise CRM solutions. The top three benefits are: lower TCO, an accelerated implementation track and improved technical integration capabilities because of its inherent Service Oriented Architecture.
The reduced TCO of online customer relationship management solutions has 2 main drivers: lower implementation cost and reduced operational costs for system and software maintenance. One of the advantages of Sofware as a Service is that the solution is immediately accessible and operational at the moment a subcription license is bought at web based CRM vendors such as Salesforce, Entellium, Netsuite, RightNow and other SaaS companies.
Furthermore, a subscription-based internet CRM application does neither demand costly on-premise IT infrastructure or extensive operational investments to maintain the infrastructure. The lower costs for software maintenance (mainly performed by the SaaS vendor) will have a positive impact on the ICT budget because numbers of in-house IT staff can be kept low. Effectively, the base solution is maintained and operated by the software provider. Only the customizations done by customers beyond the standard solution have to be budgeted for.
The number two benefit is the accelerated implementation of web based CRM software. The moment the customer finalizes the sign-up, the application is available for operational use. It is clear that some basic setup has to be performed to tailor the customer relationship management software to the specific needs of the company, but in essence, the application is ready-to-use and with its standard built-in processes can be made operational in a breeze.
However, we must point out that the apparent ease-of-use can be misleading. It is strongly advised that early on in the process, the business and IT organizations align themselves on the CRM requirements and thoroughly prepare the configuration (and potential customization) of the solution in order to prevent inefficiencies and miscommunication at the moment the web based software suite is available for productive use. The fact that it concerns a SaaS solution does not make any difference to the normal process of software acquisition. And like in all IT implementations, Pareto rules. In other words, 80% of the cost of the software is incurred by 20% of the functionality (additional customizations, integrations and the additional documentation and maintenance that comes with it), so think twice about building additional functionality.
The final benefit, easier integration, is a result of the SaaS architecture. Sofware as a Service applications such as web based CRM software are built on Service Oriented Architecture (SOA) principles which provide a number of benefits such as easier integration and a high level of reusability. The reduced complexity of establishing technical integration is a result of the use of open web standards like web services (functionality provided under the form of xml over the http protocol). Because most of the applications that enter the market (or have recently been released) have built-in support for web technologies, the technical integration of the online customer relationship management solution with other applications is much simpler.
Another advantage of the easier technical integration is found in the field of user productivity. Lately, a lot of model-based rapid application development tools arrived on the market. These tools make it possible to build business applications (so-called mash-ups) through modeling, without having to write one line of code. These tools combined with functionality provided under the form of web services make a powerful combination that can increase the ROI of any online CRM solution.
To conclude, although on-premise business software has evolved a lot in the last of couple of years, web based CRM software has some distinct benefits. It is true that traditional business software vendors have invested heavily in pre-built scenarios that reduce the implementation time (think about the SAP Baseline ERP suite targeted at SMBs) and in the service/web enablement of their applications. However, the business model, operational model and web based software architecture make online CRM a winner and a guaranteed bet on the future.