Enterprise Software

Comparing cloud to on-premise CRM: Choosing a solution

Is your organization best suited for cloud or on-premise CRM? Guest contributor Kate Webster lists some of the issues you need to consider before making a decision.

Cloud based CRM systems seem to have gained popularity in allowing your business to have quicker and wider access your customer relationship management database. Though new software vendors seem to be pushing this technology, as a business owner, it's important to know if a cloud CRM system is really the right choice for you company.

Both cloud and on-premise systems have their good and bad qualities, and sometimes being hesitant before adopting the latest technology trends might not be the worst idea.

Understanding your business's needs

In order to better understand which CRM system option is best for your company, there are a few important questions to consider:

  • Does your company have adequate IT support to administrate an on-premise CRM?
  • What are your security requirements, both of your accessibility and of the data itself?
  • How much customization do you need?
  • Does the cost per-head method calculate in your favor?
  • Do you want to integrate your CRM with other enterprise solutions?

Cloud CRM benefits

A CRM system that runs on a cloud network may be a better choice for your company if it is relatively small. Cloud CRM systems have qualities that can greatly increase the efficiency and make every day operations easier for the small business owner and employees.

  • More accessible database- Tapping into a cloud network makes your data more accessible to your employees across large distances. If different offices or departments need to share information, the cloud network can connect them easily. Workers can also access information using their mobile device when out in the field handling clients on the go.
  • Third party service provider- Having an outside vendor can ease the stress involved in routine maintenance. They can oversee instillation and testing, as well as manage your application data.
  • Environmental impact- Using a cloud CRM system is a much more energy-efficient method of storing information. Storing data on an internet sever uses less energy than on a private one.
  • Cost-effectiveness- This is probably the main reason why so many small businesses are switching to cloud CRM. It chargers per-user and can be paid in monthly or annual payments, which can be an influential aspect for businesses with a small budget.

On-premise CRM benefits

Larger and more complex companies might not choose to apply the cloud CRM option for a number of reasons. If the business has the resources to support an on-premise CRM system, it may seem like a more secure way of keeping track of its client and constituent information.

  • More control over your database- On-premise CRM systems gives your company the highest level of control over its client information. Having their database on a public internet server might not be the best option for companies who have the resources to support their own.
  • Higher security- If the company's information is private or highly regulated through Service Level Agreements, an on-premise CRM system may be required. Healthcare providers, for example, deal with sensitive customer data that shouldn't be trusted with an outside server.
  • Directly involved with business decisions- Though the automated applications of cloud CRM may be a useful tool for some businesses, others may prefer more direct control over updates to their information.
  • Might not actually be cost effective- An on-premise CRM system option may actually end up being more cost effective for your company if the per-user cost does not work in your favor. If a large amount of workers need access to your database, it may be less expensive to host your own system.
  • Less susceptible to outside issues- Having an outside service provider may make your maintenance less of a headache, but it also makes your company more susceptible to connectivity issues with your service provider. On-premise systems also lower the chance that your data will be inaccessible to your workers at any given time.

Choosing the right CRM system is integral to your business. Customer's data can be used for a number of important aspects, and having this stored in a system that works best for your business is important. Be sure you know the pros and cons of each option before making your decision.

Kate Webster writes for lead generation resource, ResourceNation.com. She focuses on a variety of topics including sales and CRM software.

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