If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

In today’s CRM market, a variety of on-demand CRM solutions are available, some extremely popular. Companies are attracted to on-demand CRM by convenience and price. On-demand CRM systems can be quick to set up and are unlikely to need much, if any, investment in new hardware. The monthly contract costs can also seem very appealing.

Though many businesses have taken up on-demand CRM however, many are also moving away from it. On-demand CRM solutions may seem a good fit to start with, but businesses can soon outgrow them, find they are limited in what they are capable of, or that the business needs a more comprehensive CRM solution.

On-demand CRM solutions have their place in the CRM market. However, the benefits they seem to offer at first glance need careful investigation. While on-demand CRM solutions may be faster to get up and running than on-site CRM software, they can often cost more in the long term. In some companies, their investment in on-demand CRM solutions has added up to a higher total cost of ownership - especially when users get tied into contracts.

On-demand solutions frequently have limited functionality, and are notoriously difficult (which usually means expensive!) to integrate with other applications. So, although on-demand CRM solutions may seem cheap to start with, the price may not always turn out to be as attractive as it first appeared. Paul Petersen, Senior Director of the GoldMine Business Unit for FrontRange Solutions, recently stated “We talk with many companies that learn too late of the limitations of on-demand CRM”. He goes on to say “On the surface, on-demand CRM is compelling and seems to offer incredible benefits. Yet, an increasing number of organizations that tried on-demand applications have returned to an on-premise solution, and we want customers and partners to be as informed as possible about the options for cost-effective and mission-critical CRM.”

Hosted or on-demand CRM systems are mainly preferred by small and medium sized companies. On demand CRM services are provided by an application service provider (ASP) and are an example of Software as a Service (SaaS). The on demand CRM provider will integrate all business functions of the client on a monthly fee. The client company can access all their data, such as documents, collaboration application, customer information, etc, through internet on demand.