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Monday, June 13, 2005

Hosted CRM Adoption : Some Perspectives

Anecdotal and quantitative data point to a significant shift in end-user adoption of hosted CRM and other software applications: In short, it appears that hosted CRM applications have achieved the Holy Grail of I.T. buying patterns - acceptance by the enterprise-sized firm.By and large, enterprise firms wish to leverage the flexibility, ease of deployment and cost efficiencies that hosted applications can deliver now that they have proven themselves.
There is little data comparing the user adoption rates of hosted software to on-premise software. It appears that companies that deploy hosted software have far less trouble coaxing their employees to use the application wholeheartedly compared to the on-premise counterpart. Some analysts say, it is the end users themselves who are driving enterprise firms to deploy hosted applications - which by definition will never be able to match completely the complex functionality of the on-premise applications that most enterprise-sized firms need to operate, especially on a global scale. In the enterprise company, what usually happens is that users themselves begin to experiment with the application and realize that, compared to the pre-existing application, it is far easier to use.
User adoption would be far greater with an on-premise application if firms can resist the temptation to stay away from the aggressive customizations. The fact that relatively few employees actually like using their application does not come as a shock to on-premise vendors; they have been trying to address the UI problem for years. Often, though, a perfectly user-friendly application is then corrupted needlessly by a partner or steering committee that has overcustomized the application. On the other hand, in some cases an on-premise application can deliver greater functionality than a hosted application - with the same level of user friendliness. As Web services and service oriented architecture (SOA) becomes mainstream in many applications, a creative customization can create a user interface on the client that offers multiple applications built into the UI.
The dashboards on many hosted vendors' applications, while very dynamic, usually link to a third-party application via a tab or a link
. In some cases, it is just a click away; in others, it can be very cubersome. Enterprise-sized firms tend to worry about security, are leery about the partitioned database or multitenant architecture and the lack of control that is inherent to a hosted deployment. Smaller firms worry about support they will receive from the vendor, especially if their own I.T. departments are overstretched.Many consulting firms have concluded that the total cost of ownership of hosted deployment in a large firm over a period of years can conceivably match the costs of an on-premise application.

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