Choosing a CRM for Your Small Business
Recently we worked with a small manufacturing company on a CRM selection project. We started by getting to know them and how they work. They do custom projects and would need to add about 20 users to the new CRM from their management, sales, and fabrication teams. Working with this team, we helped them select Microsoft Dynamics CRM as the best fit for their business.
But that wasn’t the end of the decisions the principal owner faced. He still had to make one of the key decisions businesses have with any complex software implementation: Do you buy your own on-premise system, or do you subscribe to a partner hosted CRM?
Is Hosted or On-Premise the Right Approach?
This owner is conservative. He wanted to know the system he chose wouldn’t cripple his cash flow. Things were good now, but you never know about the future.
His main concern was adding the fixed cost of a hosted CRM subscription to his monthly P&L. From his perspective, the company was having a good year. He could make the whole investment now by buying and hosting the system on-premise. That seemed like the conservative approach—no ongoing subscription costs to add to his monthly expenses.
Maybe you do this too: from time to time the company principal evaluates what a “doomsday scenario” would look like. He routinely checks how long he can stay in business if they stopped getting orders today. It’s every small business owner’s nightmare. If everything dried up tomorrow, how would we make it?
The Hidden Costs of On-Premise
What is not obvious to most small business decision makers is that Microsoft Dynamics CRM is a much more complex product than QuickBooks or Microsoft Office. It is a distributed system with a robust database.
Here’s what that requires: a fully redundant system combined with expertise to perform regular backups and maintenance routines in the database. You can automate these, sure, but they need to be closely monitored or the whole system can fail.
The cost of the hardware required for replicating the system, plus license costs and maintenance makes the real total of an on-premise CRM cost prohibitive for most small businesses.
On the other hand, the subscription cost of a cloud-based CRM solution includes a robust infrastructure of software and hardware combined with a staff of qualified IT professionals whose core competency is to install, configure and maintain CRM applications. The chances of system failure are almost none and the true price is much more reasonable for most business owners.
Making the Decision
So what did our client decide? How could he support his company’s growth while keeping costs under control?
We worked closely with the Microsoft Partner in charge of the implementation to explain the options, which led our customer to decide on a partner-hosted solution.
We addressed his doomsday scenario by showing him he could go down to a minimum number of licenses if he ever needs to lower his fixed expenses.
There’s More to CRM Than You Think
CRM is a more complex application than most of the other software applications used by small businesses on a day-to-day basis. Software as a Service providers have a solid infrastructure of software and hardware combined with a workforce that is equipped to install, configure, and maintain your CRM application.
But that doesn’t mean hosted is always the answer for all small and medium-sized businesses. A business with a strong in-house IT team that sees the value of CRM for the business and is willing to engage and support the CRM implementation might choose on-premise.
It’s one of many decisions you have to make when selecting software, and having a partner in the decision-making process can save you a lot of time, work, and hidden costs you never knew you needed to consider.