Daily Spin: Handicapping the On-Demand CRM Field

The Big Picture

Handicapping the On-Demand CRM Field

March is NCAA tournament month. Brackets. Upsets. Cinderella stories. The Final Four. So in honor of this month's games, let's take a moment today to handicap another hotly-contested arena -- the on-demand CRM market.

Today on NWC.com, we posted an exclusive review of SAP's debut on-demand CRM product. Reviewer Lori MacVittie gave SAP's initial offering solid marks in some areas (including sales data reporting), but noted the lack of some key features, such as robust data import. Late last year, NWC looked at the entire on-demand CRM market in a wide-ranging comparative review, choosing Sage Software's offering as our Editor's Choice winner.

Overall, we found on-demand CRM a solid alternative to client-server-based offerings. But choosing a hosted service isn't a no-brainer for IT. Can you trust a third-party with your crown jewel customer databases? Can you count on your service provider being around for the long term? Will your provider live up to its service-level agreements? Can the relative cookie-cutter approach of hosted CRM fit your unique business processes?Here's some help to guide your on-demand CRM decision-making.

Best-of-Breed versus Big Vendor: Perhaps no issue is more contentious in the on-demand CRM market than this one. Salesforce.com CEO Marc Benioff loves to play the upstart against his much larger rivals such as Oracle and SAP. Where you place your bets may depend on your existing vendor relationships. Do you already use SAP or Oracle for ERP or financials? Then you may be more comfortable working with a familiar vendor. But many enterprises that want to make a quick leap into hosted CRM find a best-of-breed vendor -- such as Salesforce.com, NetSuite, or RightNow -- fits best.

SFA versus CRM: For many users, CRM really means sales force automation. But as the acronym implies, CRM can be about much more, including marketing automation and customer service. SAP, for instance, is focusing strictly on SFA for it's initial hosted CRM release. Other vendors start with a strong base of marketing automation or e-mail management capabilities and tack on rudimentary sales force tools, such as customer database tracking. Especially with on-demand CRM, be sure you understand your needs and match them closely with the right vendor solutions.

The Microsoft Factor: Particularly for smaller enterprises, Microsoft's CRM represents a viable alternative, featuring deep integration with Microsoft Office and Outlook. Microsoft has been a relative late-arriver in the CRM market, but as is the case with most Microsoft products, its offering likely will improve with each subsequent release.

The Oracle Swallows Siebel Factor: When Oracle swallowed up Siebel last year, the CRM market certainly changed overnight. The full impact of that acquisition is still to be determined. For years, both Oracle and Siebel had been forced to balance their traditional (large-dollar) enterprise CRM applications against newer on-demand offerings. That balancing act won't get any easier for the combined companies.