Exposing the myths behind cloud CRM: the benefits for SMEs explained
By Mike Richardson, Managing Director EMEA, Maximizer CRM
As cloud computing grows in popularity, the decision on whether to move software applications, information and processes into the cloud or to keep them on-site is one that organisations of all shapes and sizes are considering.
Many have already taken the leap with more than 50% of workloads set to be processed in the cloud this year according to Cisco Systems’ Global Cloud Index; a figure projected to grow to 63% by 2017. At the forefront of this rise is cloud Customer Relationship Management (CRM). Last year, research by Gartner revealed that 40% of CRM systems sold were cloud-based, while sales of CRM software increased by 12% in 2012 – three times the average of all enterprise software categories. According to Gartner, this growth is being driven by companies seeking easier-to-deploy CRM systems, with businesses moving to the cloud finding that the complementary functionality it provides is better than that of traditional on-site legacy platforms.
However, while figures such as these make a strong case for moving to the cloud, there is also much conflicting information out there, including a number of commonly-held misperceptions concerning the cloud and its perceived risks. This makes determining whether to move your CRM and data into the cloud or keep them on-site even more of a challenge.
Dispelling the myths
Myth 1: the cloud compromises data security
A commonly held misperception is that moving to the cloud will compromise data security, opening it up to attack. A survey by 451 Research, completed last year, showed that 69% of technology professionals expressed significant concerns about security in the public cloud, while a Maximizer survey of UK SMEs carried out in 2013 showed that almost half listed data security as a chief worry when it comes to cloud-based CRM solutions.
In fact, moving to the cloud can actually boost data protection by granting access to all of the cloud service provider’s resources, which are likely to include more sophisticated firewalls, security protocols and data encryption than most firms - particularly SMEs - can afford on their own. This makes data less vulnerable to criminal activity, offering a huge security boost for companies that offer remote access to employees, but do not have protected web access to their systems.
Myth 2: the cloud causes disruptions and poor service quality
Another popular misperception is that operating in the cloud exposes businesses to service outages and interruptions: our 2013 survey revealed this to be a major concern for 71% of UK SMEs. In actual fact, a cloud service provider is likely to have a far better level of computing power, maintenance capabilities, around-the-clock support and general back up than a smaller individual company can afford. While a fire or flood can prove disastrous for a company that stores everything on-premise, a good cloud vendor will have automated back-ups in place via a fully configured disaster recovery shadow facility to ensure nothing is lost should the worst happen.
Myth 3: the cloud negatively affects business
It’s also not unusual to hear that cloud technology can have a negative effect on how users do business. Yet by holding everything remotely and therefore making it accessible from multiple points and multiple devices, the cloud enables users to streamline their business processes. This makes activities such as database searches, record updating, project collaboration and off-site working easier, while computing power is boosted, security is tightened and the CRM investment becomes more cost-effective.
Myth 4: the cloud is too risky for SMEs
The argument that the cloud is only suitable for large corporate players who can afford to take risks with new technology is a very persistent myth, yet many SMEs have already ventured into cloud-based storage without even realising it. A survey of 500 SMEs by Spiceworks revealed that this was the case for 50% of those questioned. Dropbox, GoogleDocs, and Hotmail, for example, are all examples of using the cloud to store or access information, while anyone using online applications such as Office 365 and Google Apps are also operating in the cloud.
Major benefits of cloud
Clearly, there are major advantages to implementing a cloud-based CRM solution, and those already mentioned are just the beginning. Another big plus point is that with a cloud-based CRM solution there is no hefty upfront expense for infrastructure and security applications, as there is with an on-site solution.
Software is also automatically upgraded on the cloud’s host server, enabling users to keep up with technology advances at little cost. Additional storage space can also be bought within minutes when it is needed, eliminating the need for significant hardware purchases.
In addition, working in the cloud can also result in a lower capital expenditure for the business and a more rapid return on investment in CRM by significantly reducing or eliminating the operational costs associated with an on-site solution. By operating in the cloud, the requirements for security, power, cooling, IT staff, physical maintenance and hardware all lessen. In fact, overall almost every SME that uses cloud services lowers their costs by 10%-20% according to estimates from the International Data Corporation.
Finally, one of the biggest advantages to cloud-based CRM is the fact that it is scalable. In a 2013 Maximizer survey, almost half of respondents cited this as an advantage and where user numbers are concerned, this scalability is a crucial factor for SMEs, allowing smaller firms to respond to growth or entrenchment in their business at minimal cost.
In a challenging business environment, moving business software and data into the cloud can clearly offer an important competitive advantage. As with any major business decision, however, it is not one to be taken lightly. With so much information and misinformation out there, it is essential to first separate fact from fiction and to determine whether the business benefits outweigh the potential downsides. Those looking for reduced upfront costs, for faster, flexible, scalable ways of storing customer data and conducting CRM activities however, may well find that adopting a cloud-based CRM and data hosting offers a solution.
About the Author
Mike Richardson is Managing Director of CRM solution firm Maximizer Software for the EMEA region. Mike joined Maximizer in 2000 when he created and headed the Professional Services Team. He then progressed through a number of senior roles, including Operations Manager and Head of Customer Care, before becoming Managing Director in June 2009. Prior to joining Maximizer, Mike had a diverse career spanning the oil and gas exploration industry, the security sector and business and IT consultancy for SMEs. Mike has a BSc Hons in Electronic Engineering and a Diploma in Engineering (DIPLeng) from Hull University.