E-CRM Deployment Options

A significant challenge facing companies today concerns investment in electronic customer relationship management (e-CRM) solutions. There are a number of implementation options available to organizations, and this week I’ll attempt to break down the pros and cons of the most popular deployment strategies.

Option 1: In-House Implementation

By far, the most popular method of implementing an e-CRM solution is to bring the entire infrastructure in-house. Now, this approach affords companies the greatest degree of customization and flexibility. Application packages and networks can be tailored to address specific business requirements. However, owning your own e-CRM infrastructure carries many ongoing investment requirements and responsibilities.

Pros
Cons
  • Complete e-CRM architecture
  • Significant initial and annual investment
  • Freedom of application choice
  • Responsible for ongoing maintenance
  • Integration with legacy system
  • Increased labor expense
  • Greater control over infrastructure
  • Speed of implementation
  • Greater levels of flexibility
  • System architecture can be a competitive differentiator

Option 2: An ASP for Specific CRM Solutions

An ASP manages and delivers packaged applications from an off-site location distributed via a wide area network. In most cases, an ASP aligns with a specific solution vendor to resell capabilities for a monthly fee. Although an ASP may offer a menu of solutions from various vendors, its service normally does not include building and maintaining integrated system architectures.

What ASPs provide is accelerated deployment speed and skilled support resources. Normally, an ASP will have significant service strength related to a specific package, accelerating implementation schedules. However, ongoing maintenance or integration with legacy infrastructures can be problematic if the provider has very limited industry expertise.

Pros
Cons
  • Deep functional and technical expertise with specific applications
  • Siloed approach to e-CRM
  • Rapid implementation
  • Addresses very narrow solution set
  • Lower capital investment requirements
  • Support personnel have limited insight of business drivers and customer needs
  • Addresses resource constraints
  • Limited integration with legacy systems

Option 3: Outsourced Customer Contact Centers

The third option for companies seeking to implement e-CRM solutions is outsourcing specific customer contact point to third-party service providers. The classic example is contracting a call center support company to handle all inbound support calls. In the online arena, a number of service companies handle specific processes, such as email campaigns and response management.

Outsourcing specific functions to third parties is a rational choice for organizations seeking to lower the marginal costs of maintaining customer relationships. But there are system and process implications to consider. Data management with your support provider is a challenge, one that could sacrifice the quality of a customer’s experience.

Pros
Cons
  • Lowers operational costs of e-CRM infrastructure
  • Low level of technical expertise
  • Rapid deployment
  • Poor data or process integration with in-house infrastructure
  • Managed by seasoned professionals
  • May lack industry or domain expertise
  • Greater level of accountability

Option 4: e-CRM Solution Hosting

Service providers that host the entire e-CRM infrastructure offer many solutions to the challenges presented above. These service offerings, which are described as managed solution providers (MSPs), help companies address the technical, financial, and operational issues related to building a highly scalable infrastructure for e-CRM.

MSPs represent an evolution from first-generation ASPs. The greatest differentiator is that MSPs offer companies integrated solution sets rather than support for individual packages. MSPs invest their efforts in building the integration layer between applications and resell this capability for a monthly fee.

For example, an ASP may offer complete support for a sales force automation package. An MSP, however, typically offers to support the same package and integrate processes with other applications, such as customer analytics and call center support.

Pros
Cons
  • Offers integrated solutions
  • Problematic integration with legacy applications
  • Lower capital investment
  • Limited industry expertise
  • Rapid deployment
  • Must manage service-level agreements (SLAs)
  • Accountable support
  • Limited package selection
  • Allows organizations to focus on developing new programs

What Is Your Plan?

As you have read, a number of options are available to companies seeking to implement e-CRM solutions. Overall, organizations should consider the following when deciding on a deployment strategy:

  • Capital investment barriers

  • Complexity of business needs
  • Speed of deployment
  • Appetite for ongoing maintenance and support
  • Level of change within industry

These guidelines can often lead you to the proper decision for your organization. I would be interested to hear the decision criteria you have used in implementing your e-CRM solutions.

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