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1. How-To Guide
© 2014 Demand Metric Research Corporation. All Rights Reserved.
Evaluating Hosted CRM
EXECUTIVE SUMMARY
Until recently, Customer Relationship Management (CRM) software had
the unenviable reputation for being difficult to implement in many mid-
sized enterprises. Reasons for project failure included high start-up &
maintenance costs, I/T resource requirements, lack of user adoption, and
large changes to existing business processes.
Fortunately, vendors have recognized these issues and have adapted their
products accordingly. Currently there are many hosted CRM solutions
that can be quickly implemented at reasonable costs. Read this summary
to learn the benefits of hosted CRM and understand the current
marketplace.
WHAT IS A HOSTED CRM SYSTEM?
Customer relationship management (CRM) is a business strategy that
covers methods and technologies used by companies to manage their
relationships with clients. Information stored on existing customers (and
potential customers) is analyzed and used to this end. Automated CRM
processes are often used to generate automatic personalized marketing
based on the customer information stored in the system.
There are two major types of CRM system: in-house or hosted. Hosted
software, or ‘on-demand’ as it is often called, is delivered via the Internet.
Examples of common hosted software systems include Hotmail,
Travelocity.com, and online banking.

2. How-To Guide
© 2014 Demand Metric Research Corporation. All Rights Reserved.
HOSTED CRM SYSTEM BENEFITS
 Monthly Subscription-Based Pricing – most hosted CRM
systems provide a very attractive subscription-based pricing
model. Ranging between $20-$125/user/month, these systems are
affordable for mid-sized enterprises.
 No I/T Resources Required – organizations that have do not have
I/T resources find exceptional value from the hosted model, as
systems users and administrators can have little or no prior
technology experience.
 Very Quick Implementation – most deployments can be
implemented within a few weeks. When compared to in-house
deployments of 6-18 months, the hosted model becomes a much
more viable option.
 High Availability - Application Service Providers (ASP) deliver
these hosted solutions and provide Service Level Agreements,
which guarantee availability. Although these systems have been
known to go down from time-to-time, there is a better chance that
your in-house system would be less reliable.
ACTION PLAN
1. Discuss with Steering Committee – have a brief discussion
regarding your organization’s ability to track Sales, Marketing, &
Customer Service activities to determine if migrating to a newer,
more advance system makes sense.
2. Evaluate Existing Systems – conduct an audit of your current
systems, such as excel spreadsheets, client lists, or CRM software
to identify the strengths and weaknesses of your current
environment to determine potential impact. You should also use
our CRM Readiness Assessment to measure your organization’s
readiness to implement an enterprise CRM program and/or system.
3. Make a Decision – determine if your current systems are
adequate, or if a new CRM system is required. If you need a new
system, have a discussion regarding the benefits of a hosted CRM
solution versus an in-house system.

3. How-To Guide
© 2014 Demand Metric Research Corporation. All Rights Reserved.
4. Document Requirements – work with Sales, Customer Service,
and Senior Management to understand what your requirements
are. Next, prioritize these requirements so that you will be in a
good position to compare vendors.
5. Assess Hosted CRM Providers – create a short-list of potential
vendors and book a few demonstrations to learn about the pros &
cons of each solution. Use independent research firms, or buyer’s
guides to save time with this exercise.
6. Select a Solution(s) – based on your key requirements, determine
which system can meet your requirements and budget. Include
stakeholders from each department who will be using the system
in the decision-making process, as their buy-in and adoption of the
solution is absolutely essential.
7. Conduct a Pilot – test the system with a small group of users for a
30-90 day period. Adapt your business processes to accommodate
for the new system and analyze performance results. It is critical
that your new system enables more sales, improved marketing
tracking, and better customer service, or else it is not worth the
time & resources needed to migrate from your old system.
8. Roll-out to Enterprise – once the business case has been proven,
scale up your deployment. Have each department come on-board
one-at-a-time so that you can build momentum and internal system
knowledge incrementally. Appoint a system administrator who can
head up the training process.
BOTTOM LINE
CRM systems are one of the top investment priorities for mid-sized
enterprises this year. Learn how the hosted model for service delivery
can provide strong return on investment, and get your pilot started
immediately.