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Marketing & Campaign Management

Until fairly recently a company of any size wishing to implement a Customer Relationship Management (CRM) package really only had one option - licence the software and install it. In the 90's and early part of the 21st century many did to their cost. Tales of disastrous implementations involving heavy costs were rife and the evidence wasn't simply anecdotal. AMR Research found that only 16% of 'on-site' (on-site, - licence it and install it) projects provided real benefits, while a very similar number failed to go live at all. Spending crashed, falling 25% in 2002.

As there was little alternative when on-site solutions crashed, the market crashed with it. Alternatives had been tried but 'software as a service' (the Application Service Provider, or ASP model, where no software is ever delivered and is provided entirely over the web) had failed to live up to its early, and heavily hyped, promise. But the seeds had been sown and never fully died as witnessed by the enormous growth of Salesforce.com from a tiny base in 2002 and the release of Siebel's 'OnDemand' service. Hosted CRM, CRM on-demand, whatever you choose to call it, was here to stay.

So why is ASP more relevant today?

• The first, most obvious and most overlooked reason is the easy availability of broadband. Five years ago we were in the era of internet dial-up, leased lines or ISDN. It was either slow or expensive. Now it is fast and cheap and getting faster and cheaper.
• Secondly, the whole web set up at both a macro and micro level is more reliable. Redundancy is so heavily built in that even if main pipes fail there are dozens of other routes around. Data security, disaster prevention and recovery have moved on dramatically – the Data Centre of today bears little relation to its 20 th Century predecessor.
• Thirdly, the functionality of all the ASP systems have improved. NetSuite have grown from their ERP roots to embrace most aspects of CRM, Salesforce, though largely still a SFA (Sales Force Automation) vendor, has CRM attributes, and MarketDeveloper has grown from its Marketing Automation origins to integrate the whole Sales / Service process.
• Fourthly, integration has improved dramatically. This is partly a function of greater breadth of programming but partly technological improvements. So, on the one hand new modules integrating back and front office applications have been written, on the other XML and SOAP communications protocols have dramatically eased those integrations.

There are a number of other reasons. There's a broader acceptance of the net as the way forward; extensive anti-virus capabilities are now available that didn't exist five years ago, and there has been the development of thinner and thinner client technology.

However, the one that cannot be ignored, particularly in the mid-market area in which we are most interested, is cost. This is a very hot topic at the moment particularly as some recent research by Sheryl Kingstone of Yankee Group suggests that hosted total cost of ASP ownership is 60% lower than an on-premise solution. It is impossible to generalise, as for example Microsoft's CRM package is an 'on-site' package that it is possible to customise internally. Nonetheless with monthly costs as low as £50 per user per month from the likes of Salesforce, Siebel and MarketDeveloper, no up front licensing, no new hardware, no internal IT intervention and free upgrades this can be a compelling argument in the mid-market. 

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