Mike Richardson (pictured) separates fact from fiction surrounding cloud CRM.
As increasing numbers of organisations move their business processes off-site and into the cloud, cloud-based CRM is becoming more and more popular. In fact, Gartner research reveals that 40% of CRM systems sold in 2013 were cloud-based, while according to Cisco Systems’ Global Cloud Index, over 50% of workloads will be processed in the cloud this year. What’s more, this figure is set to rise and rise.
With this comes growing pressure for those non-users to climb aboard and move their CRM into the cloud or risk being left behind. Yet, while there is a great deal of information on the cloud and cloud-based CRM out there, much of this is conflicting, making it difficult for organisations to make the right decision for their requirements.
An informed decision on whether the business benefits of cloud CRM outweigh the potential downsides for your business demands full possession of the facts, so it is important to sort out which commonly-held perceptions of cloud CRM are true and which aren’t.
Myth and reality
One of the biggest myths surrounding the cloud is that it compromises data security. In fact, for SMEs in particular, the opposite is more likely to be true. Moving to the cloud can reduce the number of attacks because cloud data storage requires more sophisticated firewalls, security protocols using the best encryption software that most businesses will install themselves to protect their on-premise data.
A second myth is that operating in the cloud exposes businesses to more outages and interruptions, which have a negative impact on performance and service quality. A 2013 Maximizer survey revealed outages and interruptions to be a major concern for 71% of UK SMEs, yet a cloud service provider is likely to have better back-ups and technical support than those of an individual company with just a single data facility. This ensures that nothing is lost should the worst happen, like an on-site power cut or flood. The level of computing power, maintenance capabilities, around-the-clock support and general back-up a major data hosting provider will have in place is therefore far beyond the capabilities and resources of most organisations, particularly SMEs.
Many SMEs also feel that the cloud is not suitable for their size of business, because they are unable to take the kinds of risks that bigger organisations can. Yet, operating in the cloud cuts risks for the majority of SMEs that use it: security is better and the costs of staff, infrastructure and software are reduced.
In fact, while some SMEs are still avoiding the cloud for these reasons, many have already ventured into cloud-based storage without even realising it: a survey of 500 SMEs by Spiceworks revealed that this was the case for 50% of those questioned. Dropbox, GoogleDocs and Hotmail are all examples of using the cloud to store or access information, while anyone using online applications such as Office 365 and Google Apps is also already operating in the cloud.
The fourth big myth is that using cloud technology will negatively affect the way users do business. In fact, because everything is held remotely and is accessible from multiple points and multiple devices with the cloud, the opposite is true. The cloud makes it easier for businesses to search their customer database, update records, enable workplace collaboration, permit off-site work and tap into business intelligence. This changes business processes for the better, while boosting computing power, tightening security and making the CRM investment more cost-effective.
The advantages of cloud CRM
It is clear there are some big benefits to a cloud-based CRM solution. With no need for costly infrastructure upfront, nor for the expensive security applications that an on-site solution requires, companies can save much-needed funds from the outset. Once implemented, the operational costs associated with a cloud solution are also reduced or eliminated, as the costs of IT staff, security, power, cooling, physical maintenance and hardware refreshes are all handled by the cloud service provider. This results in lower capital expenditure for the business and a more rapid return on investment in the CRM solution.
Software is also automatically upgraded on the host server, meaning upgrades become cheaper, enabling users to add new features without the need for significant investment. Additional storage space can also be bought when needed, eliminating the need for big hardware purchases.
Finally, one of the biggest benefits of cloud-based CRM is that it is scalable. Our 2013 survey showed that almost half of respondents identified this as a key advantage of cloud CRM. This scalability in terms of user numbers is a crucial factor for SMEs, allowing smaller firms to respond to growth or entrenchment in their business at minimal cost.
The case for cloud
There is a very evident business case to be made for adopting a cloud-based CRM and data hosting solution, with SMEs that choose to go down this route gaining a vital competitive edge. However, when considering a cloud-based CRM solution versus an on-site solution, it is vital first to separate fact from fiction, to work out the legitimate concerns and risks and to determine whether the business benefits outweigh the potential downsides. For those looking for reduced upfront costs, for faster, flexible, scalable ways of storing customer data and conducting faster, better CRM activities, the chances are that using the cloud will help.
Mike Richardson is managing director of CRM solution firm Maximizer Software for the EMEA region.