Case Study Customer Relationship Management Heads to the Cloud

INTRODUCTION

Customer relationship management (CRM) system integrate and automate customer facing processes in sales, marketing, and customer services, providing an enterprise-wide view of customers. Companies can use this customer knowledge when they interact with customer to provide them with better service or to sell new products and services. These systems also identify profitable or non profitable customers or opportunities to reduce the churn rate.

The major customer relationship management software packages provide capabilities for both operational CRM and analytical CRM. They often include modules for managing relationship with selling partners (partner relationship management) and for employee relationship management. Selecting a CRM program means finding the software that best fits the company’s needs. CRM software comes with many features and tools, and despite the fact that many CRM products offer similar feature sets, there are some unique tools in each one. 

Programs can be divided into categories by several criteria:

• Features refer to how well the software integrates with other applications (ex. Outlook, Gmail) and how accessible information is. It covers everything from calendar alerts and to-do lists to mobile access and synchronization capabilities.
•  Contact information ranking outlines the program’s ability to store specific information for each contact. The business world is fast-paced, so managers need to be able to access customer’s information quickly.
• Sales and marketing tools are designed to help and maintain current clients and gain new ones. Most importantly this tool helps find campaigns with positive ROI and campaigns that are not yet performed.
•  Ease of use is about the program's design. A well built CRM program will be easy to navigate quickly and will make the most important items clear and easy to find.
•  Help and support indicates what support the CRM software manufacturer provides for their product.

SWOT ANALYSIS

STRENGTH

• Cost. For most small businesses’ managers, saving money is the most important benefit of cloud-computing applications.
• Ease of Set-up and Use. Cloud applications don’t need to be installed, downloaded or upgraded. Applications are easy to learn and utilize and many of them are available for free trial to see whether it fits for a certain small business or not.
• Scalability. As the business grows, additional resources are added in the environment to support the businesses growth.
• The beauty of cloud computing technology is its simplicity, the fact that it requires significantly fewer capital expenditures to get up and running.
• Cloud computing infrastructures offer much greater scalability, complete disaster recovery, and impressive uptime numbers.
• Backup and Recovery. The process of backing up and recovering data is simplified since those now reside on the cloud and not on a physical device. The various cloud providers offer reliable and flexible backup/recovery solutions. In some cases, the cloud itself is used solely as a backup repository of the data located in local computers.
• Increased Storage Capacity. The cloud can accommodate and store much more data compared to a personal computer and in a way offers almost unlimited storage capacity. It eliminates worries about running out of storage space and at the same time It spares businesses the need to upgrade their computer hardware, further reducing the overall IT cost
• No Hardware Required. A physical storage center is no longer needed as it is hosted in the cloud. Again, a backup could be worth looking into in the event of a disaster that could leave your company's productivity stagnant. 

WEAKNESS

• Failure to adjust business process.
• The complexity of CRM project is a major hurdle. CRM implementation can consist of dozen of related goals and project.
• Customer identification parameter. Defining customer is a hurdle to overcome in archiving a customer focus organization.
• A constant internet connection is required. Without the internet, you cannot access your data or application
• Potential inability to see who is viewing / accessing your corporate data.
• Security and privacy in the Cloud. Security is the biggest concern when it comes to cloud computing. By leveraging a remote cloud based infrastructure, a company essentially gives away private data and information, things that might be sensitive and confidential. It is then up to the cloud service provider to manage, protect and retain them, thus the provider’s reliability is very critical.
• Dependency and vendor lock-in. The implicit dependency on the provider. This is what the industry calls “vendor lock-in” since it is difficult, and sometimes impossible, to migrate from a provider once you have rolled with him.

OPPORTUNITY

• Accessibility. Cloud based applications can be accessed by using an Internet connection. Customers and clients can also access online services offered by the business, such as online appointment-scheduling or making payment.
•   Easy Implementation. Cloud hosting allows businesses to retain the same applications and business processes without having to deal with the backend technicalities. Readily manageable by the Internet, a cloud infrastructure can be accessed by enterprises easily and quickly. Another advantage is a lesser cost for in-house IT infrastructure maintenance. While some providers may say cloud hosting allows companies to save money by taking away the need for an IT support and management team, the opposite is true. We at Stratosphere Networks believe redundancy is key. While a backup can be an extra cost, it can be worth it in the event of a technical failure within the cloud.

THREAT

• Increased Vulnerability. Cloud based solutions are exposed on the public internet and are thus a more vulnerable target for malicious users and hackers. Nothing on the Internet is completely secured and even the biggest players suffer from serious attacks and security breaches.
• Lack of control over data, system performance, the ability to audit or change processes. Since the applications and services run on remote, third party virtual environments, companies and users have limited control over the function and execution of the hardware and software.

Question 1 : What types of companies are most likely to adopt cloud-based CRM software services? Why? What companies might not be well-suited for this type of software?

Types of companies which are most likely to adopt cloud-based ERP and CRM software services is startup companies, companies that want to reduce internal IT costs and companies that want to reduce their capital costs and companies that are struggling with a lot of data. Another is company wanting to consolidate multiple services or applications into one, mainly to reduce electricity, personal or operating costs. Companies that need a Service level agreement or sense of data security would not want to invest into a cloud system.  Cloud-based CRM would help these companies to achieve operational excellent and customer intimacy and released from fixed and operational cost. Not only that, it also allow them to subscribe and cancel without losing large up-front software license and hardware investment.

That is because it enables them to achieve operational excellence and customer intimacy. It releases them from infrastructural maintenance and its respective fixed and operational costs. It provides them with operational ubiquity and allows them to easily subscribe and cancel the subscription without losing large upfront software licenses and hardware investments.

What companies might not be well-suited for this type of software?

Companies which might not be well-suited for this type of software are those companies from small to middle-sized companies. These companies have senior finance professionals and they concern about security and the lack of information and understanding about cloud technology which are the main reasons for organizations are staying away from cloud ERP. Large firms in fast paced evolving industries are also not suited for ERP and CRM cloud-based software. This is due to the need for flexibility. Firstly, firms require not only deep-seated technology changes but also fundamental changes in the way business operates. Installations of the new software require employees to change their working methods. Employees must learn how to perform a new set of work activities. This requires new organizational learning and provides training for them. Companies that are unable to accept the changes and also provides training for their employees will be not be suggested to use this type of software.

QUESTION 2 : What are the advantages and disadvantages of using cloud-based enterprise applications?

Advantages:

• Removing the hardware and all the complications attached with it for example the cost of maintaining  the hardware, the risk of hardware failure, and the cost of hiring personnel required to handle them
• The beauty of cloud computing technology is its simplicity, the fact that it requires significantly fewer capital expenditures to get up and running.
• Cloud computing infrastructures offer much greater scalability, complete disaster recovery, and impressive up time numbers.
• Cost Efficiency. This is the biggest advantage of cloud computing, achieved by the elimination of the investment in stand-alone software or servers. By leveraging cloud’s capabilities, companies can save on licensing fees and at the same time eliminate overhead charges such as the cost of data storage, software updates management.
• Backup and Recovery. The process of backing up and recovering data is simplified since those now reside on the cloud and not on a physical device. The various cloud providers offer reliable and flexible backup/recovery solutions. In some cases, the cloud itself is used solely as a backup repository of the data located in local computers.
• Increased Storage Capacity. The cloud can accommodate and store much more data compared to a personal computer and in a way offers almost unlimited storage capacity. It eliminates worries about running out of storage space and at the same time It spares businesses the need to upgrade their computer hardware, further reducing the overall IT cost
• Easy Implementation. Cloud hosting allows businesses to retain the same applications and business processes without having to deal with the backend technicalities. Readily manageable by the Internet, a cloud infrastructure can be accessed by enterprises easily and quickly. Another advantage is a lesser cost for in-house IT infrastructure maintenance. While some providers may say cloud hosting allows companies to save money by taking away the need for an IT support and management team, the opposite is true. We at Stratosphere Networks believe redundancy is key. While a backup can be an extra cost, it can be worth it in the event of a technical failure within the cloud.
• No Hardware Required. A physical storage center is no longer needed as it is hosted in the cloud. Again, a backup could be worth looking into in the event of a disaster that could leave your company's productivity stagnant.

Disadvantages:

• A constant internet connection is required. Without the internet, you cannot access your data or application
• Lack of control over data, system performance, the ability to audit or change processes. Since the applications and services run on remote, third party virtual environments, companies and users have limited control over the function and execution of the hardware and software. Moreover, since remote software is being used, it usually lacks the features of an application running locally.
• Potential inability to see who is viewing / accessing your corporate data.
• Security and privacy in the Cloud. Security is the biggest concern when it comes to cloud computing. By leveraging a remote cloud based infrastructure, a company essentially gives away private data and information, things that might be sensitive and confidential. It is then up to the cloud service provider to manage, protect and retain them, thus the provider’s reliability is very critical
• Dependency and vendor lock-in. One of the major disadvantages of cloud computing is the implicit dependency on the provider. This is what the industry calls “vendor lock-in” since it is difficult, and sometimes impossible, to migrate from a provider once you have rolled with him. If a user wishes to switch to some other provider, then it can be really painful and cumbersome to transfer huge data from the old provider to the new one. This is another reason why you should carefully and thoroughly contemplate all options when picking a vendor.
• Increased Vulnerability. Related to the security and privacy mentioned before, note that cloud based solutions are exposed on the public internet and are thus a more vulnerable target for malicious users and hackers. Nothing on the Internet is completely secure and even the biggest players suffer from serious attacks and security breaches. Due to the interdependency of the system, If there is a compromise one one of the machines that data is stored, there might be a leakage of personal information to the world.

QUESTION 3 : What people, organization, and technology issues should be addressed in deciding whether to use a conventional CRM system versus a cloud-based version?

People:

Service Level Agreements (SLAs): there is lack of SLAs concerning ERP and CRM cloud based solutions and of methods to ease their respective verification.

Risk Assessment: it is hard to assess the risk when the company does not own the infrastructure that supports the ERP and CRM systems.

Dependability: companies using cloud based CRM and ERP solutions might become dependent of their providers since they do not store the data, and might not be able to easily export it to another system if required.

Organization:

Human Resource Optimization: while traditional ERP and CRM solutions demand for technical staff, cloud based solutions allows to optimize HR to focus on operation.

Technology:

Security:  using the web as infrastructure, cloud based ERP and CRM solutions suffer have difficulties in offering security comfort to companies that own sensible data.

Availability: due to the web failure tolerant model, cloud based ERP and CRM solutions suffer from availability issues that might cause business operation failures.

CONCLUSION          

Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. It involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support.