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Hosted CRM v/s Self Hosted CRM

Hosted CRM v/s Self Hosted CRM is always a hot debate.

Instead of listing differences between these two, This article lists out points for selecting between hosted CRM and Self Hosted CRM. Most of the SMEs, think of having a Self Hosted CRM. They are not in favour of Cloud or Online CRM. Two main reasons for that decision is cost and security. This article tries to explain hidden things, which you need to consider before taking the plunge.

This article focuses more on SME or VSE (Very small Enterprise). But I have tried to highlight points which are practically very relevant.

SMEs in India believe at a one-time cost of software (without any maintenance or any recurring expenditure). This was OK in olden days (pre-2000) when software and even businesses did not change rapidly. But to imagine that in today’s world is difficult. Further, during that period we did not think business continuity as a challenge while deciding Software solutions. If CRM stops, your business will halt.

Today CRM is moving fast to mobile – Cost of providing seamless connectivity to on premise CRM can be very huge cost.

The second point is Regarding Data Security. Its a myth to believe that if the server is in your office, then data is safe. In fact In today’s world when your team is not sitting in the office, and you need Mobile App access. Obviously, you can’t have self-hosted CRM in offline servers. Securing self-hosted CRM servers can be a considerable cost. Online CRM is hosted by Big Data Centre Cloud providers who would have deep pockets to spend that, SMEs don’t.

Cost of securing online Servers is huge. Cost of firewalls and other security tools cannot be afforded by an SME @ on premise level.

Self-Hosted CRM Costs:

Some of these costs look very obvious, but most of the time these are overlooked. People think that they will keep one server (or maybe a good desktop) and that’s it. No, unfortunately, it does not work that way. Here are the costs that need to be considered.

Cost plays major role in debate of “Cloud CRM Self Hosted CRM”

  • Installation Charges:
    • Apart from software cost, you also incur Installation charges.
  • Hardware:
    • You will need CRM 24/7, so you need a server that will be able to run 24/7.
    • Unlike your accounting package which only a few in your company access, everybody in the organisation will use CRM. So CRM server has to be powerful.
    • Always select for a SSD as a storage device and go for best hardware you can afford.
  • Backup / Disaster Recovery Plan:
    • You cannot afford to work without your CRM for even 1 hour.
    • Always keep one more server for backup.
  • Internet connectivity:
    • CRM cannot function without excellent connectivity.
    • Always plan for backup or redundant Internet connectivity for CRM Server.
  • Administration cost:
    • You need someone to check and manage everything. e.g., Backup / Connectivity or even DR plan.
  • Upgrade Costs:
    • Over a period hardware/networking upgrade might be required due to (a) your users might increase (b) you change your process (c) changes in technology.

Will someone steal my data or will CRM vendor sell my data, is one of the biggest fear and myth.

Some Myths about Cloud CRM:

The question of Hosted versus on-premise CRM also appears sometimes because of incomplete knowledge about Cloud or some misconceptions in the market.

  • Data open to all.
    • Many people think that if they keep their CRM in Cloud, everyone on this earth will be able to view their data. In fact, your data is safer in the cloud. Best Cloud CRM providers will always have a very secured watertight compartmentalisation of CRM instances.
  • CRM provider will steal their data.
    • Every Cloud CRM vendor will provide Privacy Policy. In fact, if your CRM vendor has enough clients, they will never have enough time to even look into your data.
  • CRM provider will sell their data.
    • Almost no Cloud CRM provider will dare do this. However, there have been instances where few complaints are found over the internet where customers have complained over their data being misused. This occurs with free CRM software in India. In fact, that’s one more reason for not using Free CRM.
  • Charged for data storage
    • Generally not. Reputed Cloud CRM companies don’t charge for the data that you keep there. They only charge per user subscription.
  • Charges for data Export
    • Some CRM vendors charge for data export (largely applicable for free CRM). If you have to download your own data from their CRM to your local PC, you have to pay them. However most of CRM vendors don’t do this. But Make sure you read the terms and conditions before signing the agreement.

Data safety, data security and data privacy. All 3 need to be taken care of to safeguard your data from crashing, Somebody stealing it or unauthorised team member accessing it.

Why Select Cloud CRM:

  • Cloud CRM is easily scalable.
    • No worries if your users change suddenly or you opt for some power hungry add-ons to your CRM. Cloud CRM can be scaled easily and immediately.
  • Always latest and fastest hardware infrastructure. Most of cloud vendors keep on upgrading their data centre infrastructure on a regular basis.
  • Up and running instantly.
    • No need for lengthy installation. Cloud CRM is up and running in couple of minutes (or Max couple of hours).
  • Must for mobile connectivity.
    • How can you think of Mobile CRM without having the back-end in the Cloud.
  • Easy integration.
    • Nowadays CRM systems don’t work in silos. Most of CRM are integrated with Emails, SMS Gateways, Websites, Portals, Mailing automation tools, Marketing automation tool and hosts of other services. Its always easy to integrate a cloud based CRM.

Remember, Mobility is the future. You cannot have mobility without Cloud.

Precautions to be taken while selecting Cloud CRM

  • Define proper Data Access Levels
    • Almost all good CRM always provide ways to manage Data Access Levels. There is mechanism to control what users can see and what they can do. Take some time and design it properly. Sometimes, its not about software but your management policy how you want to implement it. But give a proper thought to this.
  • Dual Authentication
    • Many CRM now provide Dual Authentication, this can be based on OTP (over SMS) or Google Authenticator. Make sure that your CRM vendor has that technology.
  • Selected IP Access.
    • One way to be secure is to restrict CRM access from a restricted pool of IP addresses. Also logging IP addresses of the device from where CRM is accessed is also a good idea.
  • Get a proper NDA/SLA from the vendor.
    • This is most important part. Sign this documents before you start sharing your business data with your CRM vendor.

One thing is very sure, On premise CRM is always costly in long run, unless you are a very big organisation

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18 thoughts on “Hosted CRM v/s Self Hosted CRM

  1. It’s a good initiative to create a platform for debate and discussions leading to discovery of innovative inputs which may ultimately strengthen CRM actions. CRM should not be used as a tool to expand only business but it should be an avenue to strengthen emotional relationship between service providers and receivers for value maximization. All the best Shimona!

    1. Thanks a lot Dr. Sadhak. CRM should help strengthen emotional relationships, well said. Thats what we @ Enjay strive about. That is what my next article is about “Why India needs Indian CRM”

  2. The article is a pleasant surprise. Very well written and touches almost all points of concern. Thanks Shimona. It will certainly help increase the CRM Users Community.

  3. Hi! Shimona!! Very good initiative and well explained !! We are active users of Enjay CRM on cloud and have been providing our feedbacks regularly to Enjay .
    With Cloud concept catching up for almost all office functionalities ; its need of the hour is Mobile Office !!

    Looking forward to regular updates !

    Best wishes !!

  4. Thanks for detail information, one can easily decide his selection between on premise crm or hosted crm

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