Key Differences

On PremisesCRM

Cloud BasedCRM

Control Complete ownership and control

Little or no physical control

Accessibility

Works on-premises in any situation or environment

Available only within the premises, on designated points

Depends on internet and connectivity

Accessible anytime, anywhere

On-Premises CRM

Hosted CRM

Set-Up

Complex, time consuming process Hassle-free, on-the-fly, done in a few mouse clicks.

Stressful, time consumingproject

Rapid, smooth, seamlessand stress-free deployment.

Requires extensivephysical infrastructure

Does not require any infrastructure, but internet connection

Investment Significant upfront investment Little or no upfront investment

Costs

High upfront costs Little or no upfront costs

Additional recurring costs for staff and maintenance

Monthly/annual subscription model

SUBSCRIPTION

Fixed cost - sunk investment Cost varies depending on sizeof database and number of users

ObsolescenceSoftware / hardware

obsolescence after some yearsThe pay as you go fixed pricing

also converts capital expenditures to easily

manageable operating expenses

FlexibilityHighly inflexible. The required

capacity and functionality has to be decided and installed upfront

Modular – subscribe only to functions required on a

monthly basis. Most providers offer flexible license options

Highly rigid. Very difficult and time consuming to add capacity

Highly scalable

Capacity once added is a sunk investment

Capacity can be added or reduced as required

easily, on-the-fly

Scalability

Customization Enterprise can customize the CRM as required

Extent of customization available depends on selected vendor. Full

featured hosted CRM offer customization options on par

with what can be achieved with on premises CRM

Transformation of Business Process

Does little to address issues of data silos

Force enterprises to move all customer related data to a central depository, thereby

eradicating data silos

Version conflicts can derail the system

Everyone has access to the latest and complete version

of the data iterations

Support Requires an IT team to install, operate, maintain, update, and

repair the CRM

No dedicated IT team required. Lay users can run the system

IntegrationPossibility of deep integration

with other systems and components of the enterprise

Options for integration with other systems limited -

integration may require the enterprise's legacy

applications to comply with a rigid, uniform system

SecurityHighly secure, since there is no need for communication to go

across to a third party. Database is stored locally

Data, even though stored in a private and secure database

moves through internet. Susceptible to various attacks.

Military grade encryption reduces threats greatly though

Ease of use Users need to be trained Minimal training required

Resources Resource intensive Relatively moreenergy-efficient

Suitable for Only large enterprises Suited across the board, especially for small and

medium enterprises

On-premise versusCloud CRM

Quick guide to selecting CRM type

Cost-Benefit Analysis

Security

On Premises CRM Cloud Based CRM

Software and database

Servers andother hardware

Other Resources required to install the CRM

Salary of IT staff required to install, operate and maintain the system

Energy costs to run the system

Cost of managerial time to take care of the system

Cost of server and software obsolescence

Monthly subscription costs (depending on database size

and no. of users)

BIG CONCERNData resides in external servers and is transmitted over the Internet

Hosted CRM security checklist

Physical Security for the Provider's External Data Centers

Electronicsurveillance

Multi-factor access control systems on a least

privileged basis

Trained security guards on 24x7 basis

Environmental systems designed to minimize the impact

of disruptions to operations

Redundancy through multiple geographic

regions and availability zones to ensure uptime

even in case of attacks or natural disasters

Network & Server Security

Built-in firewalls Private Subnets

Access to a small group of administrative

users only

Regular penetration testing

Application vulnerability threat assessments

Network and system monitoring on 24x7 basis

Regular and systematic back-up of customer and

system databases

Deletion of archived backup data after a

certain interval

Quarterly penetration testing performed by

Workwise

Annual penetration tests performed by 3rd

party vendor

1. suyati.com/shift-your-offline-crm-to-cloud2. www.comparebusinessproducts.com/crm/advantages-of-on-premise-crm3. www.forbes.com/sites/louiscolumbus/2012/07/27/gartner-hype-cycle-for-crm-sales-2012-sales-turns-to-the-cloud-for-quick-relief4. www.oncontact.com/crm-software-cloud-vs-on-premise5. www.techrepublic.com/blog/the-enterprise-cloud/comparing-cloud-to-on-premise-crm-choosing-a-solution6. www.business-software.com/article/on-premise-crm-pros-and-cons7. blog.imason.com/microsoft-crm-online-vs-on-premise8. www.oncontact.com/crm-software-security9. www.comparebusinessproducts.com/resources/item/the-untold-costs-of-a-crm-implementation

Reference:

Traditional way of computing

Requires installation in enterprise servers

Too many paraphernalia

Easy to use

Centralization of data

Anytime-anywhere availability

Available through cloud

Subscription model

Simple sign-up procedure

Accessible on the fly

User Acceptance

Research major Gartner estimates that 35% of all CRM implementations are now cloud (SaaS) based, and that this will

grow to over 50% by 2020.

The extent of cloud based CRM adoption varies across CRM software categories

Web analytics95% adoption95%

50%40%

Salesforce Automation: 50%

Configure Price Quote (CPQ) : 40%

35%