Is there a place for on-premise CRM?

Is on-premise CRM an option in the modern era?

For some companies, going down the on-premise CRM route is a good option.  We are going to take a look at why this is as well as the benefits of this type of system.  To clarify, on-premise CRM definition refers to software hosted via your own company server. 

Why would a business choose an on-premise CRM?

When a CRM is on-premise, the software is usually open-source which means that the business can customize it.  That cannot happen with cloud CRM. The term 'cloud CRM' means that the software is held on the vendor’s server and accessed with a web browser via the cloud.  At the same time, on-premise CRM provides companies with more control over their data. Finally, the cost of on-premise CRM ownership can be less than the cost of monthly cloud plans.

Benefits of on-premise desktop CRM

  1. The biggest benefit of on-premise CRM is that once purchased, the company owns it.  A boon for larger companies with an in-house IT team, they are able to not only install but update, repair and run it.  This gives great flexibility to both users and customers.
  2. Being on-premise also means that the CRM can integrate with current systems.  This is particularly beneficial where companies have their own specialized rules or systems; cloud CRMs can mean that companies have to fit in with a uniform system whereas on-premise CRM provides full customization and integration.
  3. With the arrival of GDPR, another benefit that cannot be ignored is that security is much greater. Both company and client information is confidential and stored in-house with no need for data to be shared via a 3rd party. 
  4. With a great level of autonomy, businesses can use their on-premise CRM and tailor it to suit every aspect of the customer experience.
  5. The cost of ownership of an on-premise CRM is almost always less than the cloud version. This is a boon for businesses who expect to grow rapidly and in a stable way and who can afford the large up-front payment.
  6. Enterprise-scale businesses will certainly enjoy the benefits of an on-premise CRM due to:
    • Ability to use a mix of currencies and languages
    • Full synchronization, enabling workers to alter date off-line and make changes once connected to the system
    • Provision of intuitive tools which allow the IT in-house team to set-up and administer the system

Check out our complete comparison between cloud and on-premise CRM to find out more about the differences

Disadvantages of cloud-based CRM

Being ‘in the cloud’ is certainly a big trend these days but that does not mean that there are not disadvantages involved.  

  1. The ability to pay monthly is useful for smaller companies but can cost more overall.
  2. Mobile costs need to be considered.  If users are going to be accessing the cloud from several remote locations, this can be a great advantage but the costs of wireless use have to be taken into account.
  3. Devices used to access the cloud have to be adequate.  If you need to update mobile devices and the terms of your data service, costs may not balance out. You also need to be sure that key workers within the company will be using mobile devices.  If not, then being in the cloud is not such an advantage.
  4. Your company needs to adopt cloud use.  Your cloud CRM needs to be introduced positively to the users as resistance will be a major disadvantage and possibly lead to project failure. Not only will training be required, but your team needs to be willing to use the new interface. This disadvantage can be minimized by introducing the new software carefully, ensuring high adoption rates.
  5. Security may be a concern. Think of the amount of sensitive data stored in the system such as company financials, employee information and customer details and it is small wonder that some companies are not happy about having this stored via a third party in the cloud.
  6. Compliance may be an issue. This depends upon the services of the company using it but they will need to carry out due diligence. This means ensuring that the third-party vendor is up-to-date when it comes to the various regulatory mandates within their particular industry.  Sensitive data has to be secure so that the privacy of partners, customers and employees is guaranteed.

There is much to be said for opting for an on-premise CRM.  When it comes to choosing a CRM system, there are more choices than ever for businesses of all sizes.  Cloud-based models definitely make this type of software more accessible to SMEs, although drawbacks such as security and limited customization need to be considered.  This may cause them to opt for an on-premise CRM for small businesses.

Large corporations and enterprise-scale businesses are more likely to select the fully customizable on-premise software.  Having their own IT team in place, it makes total sense for them to want to be in full control without having to involve any third party.  It may be more expensive up-front but this is not normally an issue as once purchased, they own it.  

However, small businesses who do not need the sophistication on offer may still opt for the cloud solution, purely because it is cheap (pay monthly), convenient and easy to implement.  Because it offers so much reliability and flexibility, it means that the business does not have to worry about upgrading or maintaining the system. This way, they are free to invest their money and time instead into focusing on their core business strategies.  Mobile use also has to be considered and in this regard, much will depend upon the particular needs of the business and its employees.

It is only by being fully aware of the difference between online and on-premise CRMs that companies can make a fully informed decision and determine the best fit for them.  In turn, this allows efficient allocation of resources and a far more efficient CRM workflow.

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Jane Tareen

About the author…

An MBA-qualified professional, Jane specializes in all kinds of copywriting and creative content production. With many years spent working in advertising and publishing, she is also skilled in editorial production and proof-reading. Whilst writing, she has a constant companion in the form of one very large Fox Red Labrador!

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Jane Tareen

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