What’s right for you: On-premise or online cloud CRM solutions

What’s right for you: On-premise or online cloud CRM solutions

Written By: Ken Jacobsen

from November 23, 2015

When companies today search for CRM solutions, they usually explore the possibility of cloud-deployed options. Data accessed through mobile devices or other online computing tools is fast and flexible. It is the go-to strategy to stay competitive in the modern market.

The cloud, however, is not for everyone. There are multiple ways a business can go about implementing CRM services and businesses have to choose the solution that’s right for them.

On-premise hosting means a company uses it own hardware to store data and run informational processes. Businesses that use online CRM software utilize a third-party hosting service to provide them with cloud capabilities. Here are some things to keep in mind when trying to choose between on-premise CRM systems or cloud-deployed solutions:

Initial costs
At first, hosting data on the cloud is cheaper. If a company shows interest in implementing a CRM solution but has limited resources, starting with an offsite option may be a smart move. TechRepublic said small businesses are prime candidates for cloud-deployed solutions because most don’t have extensive IT departments or the funds necessary to build their own hardware network.

A larger company, however, may want to use on-site CRM software data storage. If a company has its own IT department full of employees who have the time and skill to monitor and facilitate information operations, on-premise solutions could eventually pay for themselves. While there is a large initial investment, to pay for hardware and other equipment, it is usually a one-time cost. Cloud-deployed options are a subscription service that a company has to keep paying.

In the past, on-premise solutions were usually more customizable, provided a company had the skills necessary to design CRM features. When companies had a lot of specialized needs, they would use an on-site system because it was completely within their control and it could be specifically tailored during adoption. By working with a CRM partner, businesses these days should expect the same performance from offsite storage.

Modern cloud-deployed solutions are much more flexible than previous options. Third parties offer a variety of CRM services and up-to-date online CRM software is just as customizable as on-premise versions. Tech Target said cloud providers need to explicitly show customers how the software performs before implementation. A business should ask for demonstrations, data sampling or a cloud hybrid option to ascertain the quality of the service.

The cloud also has the added flexibility of mobility. A company can access online CRM solutions on laptops, tablets and smartphones. Employees may use the software on the device of their choice from any location that is convenient. On-premise options can be much more restricted in their access.

Online CRM services update their software automatically, having notified the customer in advance, and when they introduce a new feature, it is available to its online version first. On-premise users often have to wait a few months for non-cloud software to catch up.

When it does come time to update the system, on-premise software systems have to have skilled employees conduct maintenance themselves. ITtoolbox said one of the primary advantages to offsite hosting is a third party conducts all support activities. This means the company is in less control, but can allocate its employees and resources to other critical business procedures.

If a company does use on-site data storage, it needs to make sure its business software provider is available for the long haul and can assist in updates as they happen.

Employees access cloud-deployed CRM data storage through the Internet. Many people fear keeping data online makes it vulnerable. It’s true that cloud-deployed options may be more at risk than on-site options, but that depends on the skill of the third-party hosting service vs. the on-premise employees.

The talent of a company’s IT team determines on-site data security. Businesses have to design and implement their own security protocols and procedures. A company that doesn’t place security as a priority may be compromised through a single misplaced password.

Third-party cloud hosting services place a lot of emphasis on security. Most offsite hosting centers are aware of the cloud’s reputation and want to ease customer fears. Features like automatic data access monitoring and constant password changes are standard. Online CRM cloud solutions usually come with a software partner with the experience necessary to provide optimum performance.