In-Depth

Hosted CRM’s Killer App

Web-necessary CRM applications can enable new business processes that aren’t possible with on-premises CRM solutions.

• By Stephen Swoyer
• 03/03/2004

But while proponents of on-premises CRM solutions typically tout several advantages over hosted competitors, such as always-on access to applications and data, security, easier integration, and better customizability, CRM-as-a-service advocates mostly fall back on one big selling point: price.

By doing this, says application and technology consultancy Beagle Research Group, they’re ignoring hosted CRM’s most important value-add. In fact, Beagle Group researchers say, hosted CRM applications can exploit their tight integration with the Internet to enable innovative business processes that in most cases couldn’t be supported using on-premises solutions.

Beagle Group defines these new applications as “Web necessary” (WN), which they distinguish from the “Web friendly” (WF) applications that spawned the success of hosted CRM in the first place.

“Whereas conventional WF hosted CRM applications behave much as they would if they were behind the firewall, WN CRM applications leverage the Internet to deliver value beyond simply transporting data,” researchers write. “For example, by hosting an application and making it available on the [W]eb to multiple users[,] WN applications can bring together experts from diverse geographies, specialty areas, and time zones in synchronous or asynchronous collaboration.”

More importantly, WN CRM applications can enable new business processes that aren’t possible with on-premises CRM solutions, Beagle Group says, which in most cases are siloed away behind enterprise firewalls. This will be of primary benefit to marketing applications, which in many organizations take a backseat to sales and service applications, researchers say.

In addition, the WN CRM applications are both cost effective and well suited to the requirements of most marketers. “WN applications frequently support business processes that involve multiple people potentially working in different locations and different times,” which Beagle Group researchers say is make them a good fit for organizations that outsource many typical marketing activities, such as design, survey work, and public relations.

Because these applications are accessible by means of a Web browser, they’re ideally suited to support collaborative scenarios between company employees and outsourcers, the research firm says. “[T]his enables business processes between company employees and non-employees in an ad hoc collaboration that can go well beyond conventional geographies and provide users with access to a greater number of resources.”

Beagle Group researchers identify several companies they say are implementing WN CRM applications to support outsourced marketing efforts today. One such organization, CustomerSat, a provider of software for building and hosting online surveys, created an application that lets users develop, support, and analyze quantitative marketing studies from any location. The alternatives, researchers note, include costly direct telephone surveys, or paper-based surveys that are administered through the postal service. “The system’s built-in analytics make it easy to cross tabulate and follow trends—two very time-consuming processes that the online system makes routine.”

Not all WN CRM activity is happening on the marketing side, however. Beagle Group researchers identified another organization, BlueRoads Corp., that markets WN applications designed to support channel sales efforts. Most partner relationship management tools typically manage the interface between the manufacturer and the first line of the channel, researchers say, but BlueRoads’ offerings deliver lead information directly to the sales people, regardless of where they are. In addition, the company’s software captures feedback from sales people in the field and uses custom analytics to collate it, so that managers can fine-tune their sales strategies. The upshot is a more responsive sales organization than would be possible using on-premise CRM solutions, according to Beagle Group researchers.

Beagle Group says the market for WN CRM applications is still relatively immature, with most vendors offering only one WN-ready application. In this respect, it’s very similar to the early CRM market, where many vendors shopped specific modules, such as SFA or customer service, before building—or cobbling together by means of acquisitions—full-blown enterprise CRM suites. As a result, many of today’s WN CRM leaders could become tomorrow’s takeover targets, as established CRM vendors augment the capabilities of their own WF suites. “Many of those single-use application companies disappeared in a wave of mergers that resulted in the enterprise CRM suites we know today,” Beagle Group researchers observe.