TMCnews Featured Article
February 16, 2011
Lack of Regulation May Put Hosted CRM Data at Risk
By Susan J. Campbell, TMCnet Contributing Editor
Customer relationship management (CRM) is a key focus for companies trying to regain much of their pre-recession glory. And, as customers are spending less and gathering more product and company knowledge, the value they perceive in a company and its products or services is gaining increased importance. Likewise, CRM is also gaining in importance and to cut costs, many companies are turning to hosted CRM.
As captured in this recent article, there are other considerations for companies when implementing solutions within the network. Currently, there are no legal precedents regarding transactional laws and trade agreements when it comes to cloud computing. Companies in smaller nations might to vulnerable to lost data if they opt for hosted CRM without first doing their homework.
There are some in the industry who will suggest that companies turning to hosted CRM solutions should host their data on the same shore, or at least in a country supported by clear and trustworthy regulations. Cloud computing does introduce new levels of information globalization and companies must be able to rely on proven providers to protect their information. If a company seeking to leverage hosted CRM agrees to send their data to a company in another country, there are certain questions that arise. For one, who protects the data?
Second, which country’s government has the authority if the data were to be hacked or stolen? Does the government in the hosting country have the right to subpoena information from the hosted CRM provider? Does that put the company that owns the data at risk?
Any hosted CRM database contains important and valuable information, including information about customers and business opportunities. It can also contain data covering proprietary information and trade secrets that the company would prefer not fall into the wrong hands.
Leveraging the benefits of hosted CRM should not put the company at risk for data capture. Hacking into a hosted CRM database is also possible for an individual. He or she may find they can grab information that can be easily sold when they hack into the system hosted in a country with little regulation or enforcement in place. This could not only cause major damage to the company, but also to the hosted CRM provider.
The good news is that proven providers encrypt the information they keep in hosted CRM solutions as they move from one platform to another, but companies considering this platform need to ask that question – how is the information protected? Companies also need to ask how that information is treated in the hosting country if it is outside of its own. When satisfactory answers are provided, only then should the company move to a hosted CRM platform.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.
Edited by Juliana Kenny
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