Five years ago, almost all CRM capability was sold as an on-premise application. Today, while many on-premise systems are brought online every day, almost every CRM vendor has made an on-demand solution available to its customers and potential customers. According to Sidney C. Lejfer, president of Harvest Solutions, a CRM consulting and training organization, there are many factors involved in this significant shift from the traditional software purchase model (on-premise) to the on-demand model:

1. Implementation fatigue. Over the past decade, many firms (especially large enterprises) have experienced drawn-out and expensive CRM implementations that never really panned out. As such, they’re looking for ways to implement CRM that don’t involve as many resources and as much effort.

2. Infrastructure maturity. Because on-demand applications run across the Internet, the extension of broadband into business environments has made on-demand a practical alternative to on-premise.

3. Cash flow. A monthly subscription charge per user allows a company to extend the software component cost of a CRM implementation over a period of time and eliminates the yearly support and maintenance fees of a traditional software product.

4. Flexible pricing. Some on-demand vendors allow their customers to choose and pay only for the functionality and services they need. Furthermore, it’s often possible to pay only for the number of licenses needed at the time, with the flexibility to add users when necessary.

5. Hardware expense. With an on-premise CRM software implementation, customers need to ensure that they have appropriate servers, work stations, operating systems, database, and network infrastructure to properly run and support the system. On-demand only requires a customer to have PCs and Internet access.

6. IT personnel shortages. An on-premise system requires IT support staff with various skills to maintain the application. However, skilled IT personnel are difficult to find and expensive to hire. By contrast, the leading on-demand vendors have invested heavily in both infrastructure and personnel.

7. Cheaper upgrades. With a traditional on-premise CRM software solution, customers can expect a major software upgrade every 12 to 18 months – a process that can be time consuming and expensive. By contrast, on-demand solutions are upgraded automatically without additional charges.

8. Remote management. Because an on-demand solution is typically accessible anywhere there is Internet access, system management and administration can be handled remotely. This ensures a high level of up time and reliability.

9. Faster deployment. On-demand solutions eliminate the need to load software on the sales team’s computers, allowing for faster and easier deployment. This, in turn, allows the end users to concentrate on using the software rather than the mechanics of getting it installed and running.

10. Support for distributed offices. On-premise CRM becomes much more complex inside companies with many different offices located throughout the world. By contrast, an on-demand solution gives every office and every user access to the same database.

11. Ease of use. Most sales professionals are familiar with the user-interface conventions on the Internet. Because on-demand solutions have been designed specifically for the Internet, training time is reduced.

12. Increased mobility. With the improvement and reliability of wireless technology, CRM users now have access to on-demand mobile solutions for on-demand services using smart phones like the BlackBerry and the Treo.

13. Security and backup. In order to provide a secure and reliable service offering, an on-demand vendor has to provide the highest level of security and data back-up services that are often superior to those at the CRM users own data center.

14. On-line training. As part of the monthly service fee, some on-demand vendors provide free online training. This can be a significant cost saving compared to the costs of traditional classroom training.

15. Third party add-ons. As on-demand offerings continue to grow and gain acceptance by companies, an increasing number of third party add-on offerings have become available to meet various needs including integration, extended sales methodologies, and email fulfillment.

16. Integration capabilities. Some on-demand solutions are highly customizable and easily integrated to existing corporate back-end systems.

For more information Mr. Lejfer can be reached at 781/530-3736 or www.harvestsolutions.net.