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January 2005

Hosted CRM For The Contact Center

By Meenakshi Sharma, eGain

This is a good time to explore and acquire hosted CRM solutions for your contact center. Often called “on-demand” solutions, hosted software applications for customer service, marketing automation, sales force automation and other aspects of CRM have evolved and matured over time. Nowadays, it’s not hard to find a solution that meets most, if not all, your needs. Many companies are offering solutions that are proven in both hosted and in-house deployments, and users can attain the best of both worlds. Contact centers are using this approach to practice and perfect their CRM strategies. Hosted applications become “training wheels” for these contact centers, allowing them to incrementally implement and fine-tune CRM initiatives and maximize the odds of CRM success. Contrary to popular belief, hosted solutions are not just hastily deployed, purely tactical quick fixes. Mature on-demand solutions offer exceptional functionality and, in fact, encourage innovation. Solutions that are proven in hosted as well as in-house modes offer unmatched flexibility, allowing contact centers to get up and running quickly, prove ROI (return on investment) and fine-tune requirements before seamlessly switching to an in-house deployment, if they choose.

Contrary to popular belief, hosted solutions are not just hastily deployed, purely tactical quick fixes.

The Need For Speed
In a time of overlapping markets and a dizzying array of products, competitive advantages have moved from asset-based to adaptive capabilities; i.e., how fast can you learn, change and respond? This is as true for the contact center as for the rest of the enterprise. In fact, contact centers, more than most other parts of the organization, are being asked to reinvent themselves at short notice and with limited resources. Businesses want their contact centers to do a lot more with a lot less. They want contact centers to provide high-quality, integrated customer interactions through multiple channels, cross-sell and upsell at every available opportunity, and provide critical information and insight about customers to the rest of the organization — and cut costs at the same time.

Is your contact center being asked to do “new” things — use new Web-based interaction channels, know everything about your customers’ preferences and interaction history at the moment you interact with the customers, or analyze customer interactions for insight about preferences and product issues? Do you have the tools to achieve your new goals? Do you have unlimited time and budget to get there? Probably not.

Can you afford to ignore the promise of speed that hosted CRM applications offer? For instance, if you were part of a retail organization and swamped by customer e-mail, wouldn’t an easy-to-deploy, easy-to-use e-mail management system be a real blessing during a holiday season? An experienced vendor can set up new tools in as little as a week. It is therefore not surprising that even large organizations are now opting for on-demand solutions to fix time-critical problems.

Don’t Dismiss The “Low TCO, Quick ROI” Claim
Besides the speed of deployment, another benefit of hosted CRM solutions that is widely acknowledged but not given enough consideration is that on-demand software offers low TCO (total cost of ownership) and quick ROI. Even detractors of hosted software admit that it is a “low-risk, high and rapid returns” option. This characteristic makes hosted software a good fit for innovative, customer-focused organizations whose main goal is to adapt and respond to changing customer needs.

In an unpredictable environment where change is the only constant, it’s hard to dismiss the value of solutions that need low upfront investment and offer quick results. What makes the proposition even more attractive is that vendors with proven expertise in both in-house and on-demand deployments now offer a hybrid approach that allows for seamless migration from hosted to in-house implementations, a path that is becoming increasingly popular with contact centers of all sizes.

Flexibility On Demand
What attracts contact centers to on-demand solutions is the freedom to start small and expand on demand. They don’t have to pre-plan each small detail and the final state of a large deployment. They can determine the general roadmap, add pieces one at a time, monitor closely, and refine the system based on feedback from existing users and changing market demands. With hosted CRM software, companies can add users, interaction channels, capabilities and customization and integration, all on demand.

Attractive Features Of On-Demand Delivery
It’s ideal for distributed contact centers and agents. One hosted CRM benefit that doesn’t get enough ink in evaluations is that most mature on-demand products are Web-based, which makes them perfect for virtual contact centers. A user can log in from anywhere as long as he or she has access to a Web browser.

The product is easy to use. A bonus benefit that organizations typically discover later is that products designed for on-demand deployment are often easier to use than those meant for only in-house installations. With in-house deployments, organizations often run into huge hidden training costs. The very nature of on-demand applications makes vendors ensure they are easy to support. Web-based products tend to have particularly user-friendly interfaces.

Upgrades and routine maintenance are easy. Most satisfied hosted CRM users rave about how little it takes to maintain the system. Businesses with limited IT resources are some of the biggest advocates of hosted CRM. Upgrades are not a nightmare and routine maintenance can be almost invisible.

The “Pros” Are Numerous, Most Of The “Cons” Have Disappeared
Here’s some more good news: mature solutions don’t have the three common limitations of early hosted CRM applications.

Limited customization options. No longer must companies accept on-demand solutions “as is.” Mature solutions can now be customized as easily as in-house options. They also provide extensive configuration capabilities that reduce the need for custom coding.
Lack of integration capabilities. Here too, mature solutions are designed to fit into companies’ existing environments. Integrations with transaction and fulfillment systems are readily available in these solutions.

Inadequate security. Some hosted CRM solutions offer even more data security than what companies were planning to attain for an in-house deployment. Of course, different industries may have some different requirements (as is the case with some financial services organizations), which may rule out the hosted option.

Choosing A Solution
Important guidelines that should be considered when considering a hosted solution include the following:

Check customer references. Speak to the company’s customers that use the product on a hosted basis.

Consider various deployment options. Many companies allow users to “try it before you buy it,” and offer subscription-based pricing for software and services; allow users to buy a software license and pay for managed services through a subscription; and enable users to easily migrate from on-demand to in-house deployment.

Match the product suite support to your contact center roadmap. Companies may wish to include components such as knowledge management, interaction management, process management, reasoning capabilities and analytic capabilities. Check to see if it supports expansion to other interaction types such as proactive contacts, self-service, interactive service and escalated contacts, if these features are important to you.
Consider the time it will take to deploy the product. Rapid time-to-benefit is a key value proposition for hosted solution providers.

Ask if the application scales easily. You should be able to expand usage of the system easily and without any disruptions in service. Also ask about common customizations that the vendor performs for similar deployments.

Check to ensure if the system will integrate with your existing systems. A hosted CRM solution provider can provide integration with your in-house systems to allow you to leverage current investments. Many users look for out-of-the-box integrations that can help minimize the cost of ownership.

Does the vendor use a collocation facility? Your hosted solution provider should house your applications and data in data centers to ensure data security. You may wish to ask about redundant heating, ventilation and air conditioning; uninterruptible power supply (UPS) with automatic power transfer bridge system; and premises security.
Ask about security measures. The hosting network architecture should include multilevel security that eliminates single points of failure and security risks within the network, systems and physical locations.

Determine if you are guaranteed availability and performance. Many service providers can guarantee very high levels of availability. Look for built-in redundancies, failover, disaster recovery and wrap-around security for round-the-clock availability. Additionally, look for the provider’s ability to perform proactive monitoring and maintenance for all critical services to ensure peak performance. 

Determine policies about routine maintenance and upgrades. You may wish to ask about the vendor’s policies regarding security updates and patches, spam filtering and application upgrades and patches.

Ask how often backups are performed. Check for complete daily and weekly backup, incremental transaction log backup, and onsite and offsite storage

Determine the vendor’s disaster recovery policy. It should include co-location sites, redundant network access and backup servers and hardware.

Hosted solutions address the Achilles’ heel of traditional in-house CRM implementations, which have classically failed because of their enormous scope, the complexity and requirements of organizational and behavioral changes, the challenges of process definition and improvement, metric development, and ever-changing business priorities that risk even the best run initiatives. However, hosted solutions should not be seen as the antithesis to in-house deployments. The implementation cycle should include the same phases: try, prove, optimize, scale and integrate. 

With some of today’s solutions in in-house as well as hosted deployments, companies are finding they can find the best of both worlds — they can seamlessly bring the hosted solution in-house if and when they need to. If this sounds too good to be true, it’s time for you to take a closer look at today’s hosted solutions.

Meenakshi Sharma is marketing communications manager at eGain (www.egain.com), a provider of customer service and contact center software and services. eGain Service, the company’s software suite, installed on-demand as well as in-house, includes integrated applications for customer e-mail management, live Web collaboration, service fulfillment, knowledge management and Web self-service.

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