Software as a service to sweep across CRM by 2012

Gartner vice president Michael Maoz says that organisations are already experiencing project savings of 25 to 40% by deploying CRM applications in a software as a service (SaaS) model, as a direct result of reduced application expense and lower implementation costs. Much of the savings spring from a reduced dependence on external service providers, which, he says, typically help businesses improve customer processes as part of the CRM engagement. Among the top 100 SaaS deployments in 2007 and 2008, fewer than 10% involved a large system integrator or an external business consulting team. Says Maoz: “Due to the increasing use of SaaS for CRM, enterprise service providers [including business consulting and system integration services teams] will have less influence on CRM processes as SaaS accelerates. “This could result in an erosion of customer satisfaction among large enterprises that invest in SaaS solutions, unless they invest their own resources to measure and manage long-term CRM process improvements.” Why? Because SaaS applications lack sophistication in business process management and process design, and – due to the absence of service providers offering business process advice – the growing spread of SaaS CRM applications threatens CRM efforts. “There will be significant savings in infrastructure and resource costs in migrating to SaaS, but to put that money to work in customer process improvements, careful performance measurement of ‘before’ and ‘after’ project spending, will need to be performed,” comments. Maoz. “If this does not happen, then the savings will be short-sighted, as they will not improve the relationship with the end customer.”