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[CH-Andrew]

There has been a lot of discussion about the viability of customer relationship management (CRM) as a service, which basically means outsourcing your CRM needs to an application service provider (ASP) a la Salesforce.com or Siebel On-Demand. An analyst from one of the big research and advisory groups recently predicted that the CRM-as-a-service model was the way of the future, but that companies will have to get over their demands for wanting to customize the hosted applications and services they license. This brings us to the point of this Advisor.



Customization has always been the big stumbling block when it comes to hosted applications, and CRM is no exception. The ASPs realize this, and they are taking steps to address the issue. Siebel believes that the best way to handle the customization issue is to try and circumvent it. Siebel's strategy is to offer a line of vertical industry versions of its On-Demand applications. While offering vertical applications will certainly appeal to some companies seeking to outsource their CRM needs, it still does not adequately address the customization issue.



Salesforce.com is taking the approach of offering its customers the ability to perform (limited) customization of applications using its Customforce toolkit, which is an outgrowth of its application development platform. In addition, Salesforce.com customers have the option to purchase custom functionality from Salesforce.com's On-Demand Marketplace, which offers various certified third-party tools, applications, and services developed by its customers using Salesforce.com's application development platform.



So which approach is the correct one? Actually, both approaches have merit. However, I think that Salesforce.com's strategy will prove the more successful over time. True, vertical industry applications definitely offer considerable features and functionality and they will certainly satisfy many companies' initial CRM needs. But this is because the generic (i.e., uncustomized) applications offer CRM functionality beyond anything companies currently have, because these companies simply don't have any CRM capabilities.



Eventually, however, end users will become more sophisticated and they are going to want to customize their hosted applications to better support their business practices. Thus, I think that Salesforce.com's strategy will win out in the long run. For one reason: at some point, without the option to customize, companies are going to have to change their own business practices to fit the functionality of the hosted application. For another reason: if hosted CRM does take off, then everyone will be using the same techniques and practices. And although the ASPs like to refer to these as "best practices," if everyone is using them, then logic would suggest that "average practices" would be a better term, because there is no real benefit or advantage to be gained from their use.



The CRM-as-a-service model is still young and it remains to be seen whether it will indeed prove to be a viable one for ASPs like Siebel and Salesforce.com. However, I think that if the model is indeed going to succeed, ASPs are going to have to offer companies some degree of customization capabilities for licensed applications and services.

[inspire]

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- CRM
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- SUPPORT / SERVICE
- REPORTS
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As well partnership with your and their name will defiantly work.
Customization is not expensive.