CRM Reading Lounge: The Essential CRM Guide

Answers to your CRM Questions: Advantages of Web-based CRM

Advantages of Web-based CRM

A web-based system requires little, if any, capital investment. It also has lower upfront costs. Instead of buying hardware and software, a web-based service is a fee for usage system. This is also referred to as a pay-as-you-go solution or an on-demand system. These terms are, to a certain extent, misnomers because in some cases the contract specifies that you pay whether you use the system or not, and whether the system is fully functional or not.

Tax advantage

vCRM service provider is responsible for all software upgrades, security patches, hardware system maintenance and access control. Upgrades and system maintenance are usually included in your subscription, as are backups and any security required.

Shorter implementation period

Going with a web-based CRM solution generally means a shorter implementation period. The software is already installed and should already be stable. All that remains to be done is to get your staff trained and your data converted and loaded. As a result of the shorter time to going live, you are also looking at a shorter period before you begin seeing any ROI.

Anywhere, anytime access

One of the bigger advantages of web-based systems is that access to the system is available from anywhere there is an internet connection. You could be halfway around the world and still be able to access your data. For small companies with limited IT staff and resources, hosted CRM offers good functionality, often at a good price.

Disadvantages of Web-based CRM

Monthly charges for usage can, over time, be greater than the purchase of an in-house system. However, this would depend on the systems involved and the respective measuring periods. You need to do your own sums based on what you are looking for and what you are comparing. Yes, this can be tricky because you need to know all the costs involved in both options up front, and getting that information is not always easy.

Costs of In-House CRM

To help you calculate the cost of your CRM system, we have included a few pointers. For an in-house system make sure you include:

  • Hardware purchases and/or upgrades
  • Software purchases and license fees
  • Training costs for your staff, including travel and accommodation, if any
  • Implementation, configuration and customization fees, including consulting fees
  • Cost of software upgrades and/or annual maintenance.

Costs of Web-Based CRM

  • Total monthly usage/subscription fees, including software upgrades and maintenance multiplied by the number of months in   your measuring period
  • Training costs for your staff, including travel and accommodation, if any
  • Implementation, configuration and customization fees, including consulting fees
  • Cost of software upgrades and/or annual maintenance if these are not included in the total monthly fees.

For both calculations, use the same number of employees. If you expect to have more people using the system in two years’ time, apply the increased number of users to both calculations. Find out whether any volume discounts apply – for example, for one to nine users the price might be $20 per user per month, but for ten to twenty users it might come down marginally.

Data security

Concerns about system uptime and data security may be an issue with web-based systems. If your information is off-site and outside the immediate control of the business, you may have concerns about guaranteed uptime and data security.

Exit clause

Part of this problem could well be concerns that the CRM service provider could go out of business, or suddenly close up shop and disappear in an effort to avoid creditors. You need to ensure that the service provider will allow you to take your own backups and/or regularly export your data.

Dispute resolution and ownership of data

In the event of a dispute with the CRM service provider, they have you over a barrel because they are in possession of your data. Check any contract carefully and get legal advice on this aspect before signing up.