Open Source CRM - An Alternative to Hosted Models - Part 2.
In my previous post, we looked at why Open Source CRM can be looked at as an alternate to Hosted CRM models. In this part of the post, we can look at the adv and disadvantages of the hosted models and how open source CRM could be a viable alternative to overcome the challenges posed by the Hosted CRM market space.
Traditional CRM models as addressed above can basically be divided into two groups, Traditional On-Premise CRM Model and Web-Based CRM Model. Each of these CRM models have their own advantages and disadvantages that they provide to the businesses they are associated. Both forms of CRM systems provide a business with a way to manage leads, contacts, campaigns, accounts, customer service and all other areas of business within a software solution.
The advantages and disadvantages of CRM on-premise solutions are wide spread. One of the main advantages of on-premise CRM Software is that they are installed locally within a corporation meaning no outside networks were needed for them to operate. But the disadvantage with such an approach being every computer within the business network requires the CRM Software to be installed directly on it and to be connected via network cables to all other computers. This would cause an extremely long roll out time for new CRM Software implementations as well as a huge investment in terms of the cost involved.[4]
These disadvantages were overcome with the arrival of the Web-based CRM model. Web-based CRM model requires no networking cables or software installation; this is possible because of the CRM Software-as-a-Service model (SaaS). Another primary advantage of web-based CRM is that all data is stored within a single data repository and accessible from any computer in the world with internet access. The Web-based CRM model provides another advantage in the form of the security of your information where in extra measure is taken to protect the data by creating frequent backups.
The benefits of a good open source CRM model over the traditional CRM models can be addressed as below –
- Customer- favorable pricing,
- Customized versions of the open source provider's applications. This feature is possible as the source-code is freely available and the developer community is open in contrast to the traditional CRM models where the developer community works on tightly held proprietary source code.
- Time-to-Market improves with more innovative and creative versions of applications getting delivered to the user community.
There are risks, however with the Open Source CRM -- the biggest being quality control of the deliverables and the second being lack of coordination with regard to the releases of various versions of the applications. The other risk involved here is that open source CRM is often built on open source platforms with open source tools. At a minimum, one needs Linux to run the applications. This problem is, of course, mitigated by a hosted solution.
To summarize the advantages of open Source CRM over the Traditional CRM model, we can have a look at the table below:
Traditional CRM | Open Source CRM |
Lengthy implementations (six+ months) and slow speed-to-market | Short implementations (< a month) and quick speed-to-market |
Higher Price ranges | Lower Price ranges |
Higher license costs as they are governed by the Proprietary application providers | Lesser License costs as licenses are governed by FSF/GNU licenses. |
Relatively high capital investment | Low capital investment |
Hardware, support and services not typically included in license cost | Subscription includes all resources (hardware, software and people) |
Upgrades and maintenance are separate investments from the license | Upgrades and maintenance are included in the subscription |
(To be continued…)
