Once you understand the value that a customer relationship management (CRM) solution can bring to your business, you require making some decisions among them, whether you’re going to host it on premises or in the cloud. Both deployment options have their benefits and drawbacks; the goal here is to help you identify which applies to your business so that you can make the best decision.

Before You Get Started

For your CRM solution to be effective, it must bring into line with your business processes and goals. The deployment option you choose is as much a part of this puzzle as the type of data you intend to analyze. Before moving forward, sit down with project stakeholders, determine what you’re trying to do with the CRM solution, and identify what your current infrastructure looks like. You may have your mind set on one thing, but your IT department and end users may have other thoughts. Questions you may consider asking include: 

  • Do I have the budget to purchase new servers and hardware for this project?
  • Do I anticipate rapid growth in my company?
  • Does my company hire seasonal or temporary employees?
  • What data regulations does my company need to comply with? 

With all the preplanning complete, you can begin to investigate which option is best for your organization. 

A Look at On-Premises Solutions

An on-premises CRM solution more or less defines itself. With this option, your organization buys the software license and installs it on servers that you own. Not only do you have to own the servers and other infrastructure hardware, however, but you must manage and maintain it all, as well. All this equates to some hefty costs up front. Remember that eventually, servers and hardware fail and become outdated, so have a plan for replacing old components.

In an on-premises surroundings, your IT team is responsible for configuring the databases, deploying the software, and ensuring security. If your organization doesn’t have the personnel or expertise for this configuration and management, you can opt to have a managed services provider handle the deployment from start to finish. However, you’ll still need to have staff who are trained to deal with common issues that arise with any enterprise software solution.

There are plenty of benefits to an on-premises solution, despite how much work it may look like: 

  • You own it all. Once you’ve paid for the equipment and software, there are no additional costs except for maintenance and any scale-up based on company growth.
  • Your data are stored locally. Some regulations require that certain data be kept on premises, and some companies are just not comfortable with data being stored outside their network.
  • You have more flexibility to integrate your CRM software with other business-critical solutions, which is especially important if you’re running legacy applications. 

A Look at the Cloud

With a cloud-based CRM solution, or Software as a Service, you hand over control of the CRM solution to your vendor. Cloud vendors host the software on their servers, so they upgrade, repair, maintain, and manage the entire infrastructure. They also install the software for you. Basically, you just tell your vendor how many users licenses you to need, and then start customizing your reports and whatever other elements the vendor allows you to change. Other benefits include: 

  • Low upfront costs. You pay for the licenses you use.
  • Flexibility. If you need more users, even for a brief period, let your vendor know, and pay the costs until you no longer need the extra users.
  • Uptime. Your service level agreement guarantees your uptime; if something fails, the vendor’s redundancy plan will take care of you.
  • Mobility. Using the cloud means that your workforce can sign in from anywhere.
  • Rapid deployment. The vendor already has everything in place. 

Most solutions aren’t overly friendly with integrations, and your vendor likely won’t allow you to customize its code to make things work. In addition, even though your vendor will handle most of the security for you, if a breach occurs, you’re still responsible for your data.

Companies of all sizes make both options work and have seen disappointments with both, as well. Those that have a successful experience with their CRM solution are those that choose their vendor wisely and plan their integration carefully. If you do both, you’ll find that choosing the right hosting option is much easier.