What
types of companies are most likely to adopt cloud based CRM software services?
Why? What companies might not well suited for this type of software?
Types of companies which are most likely to
adopt cloud-based ERP and CRM software services will be companies that want to
cut IT staff cost. With CRM and ERP, a business can be up and running with the
software quickly which less need for in-house IT staff or high levels of
technical skills, and things like security and upgrades are looked after by the
vendor. This is because the difference between cloud and on-premise is that cloud-computing
makes your software an operational expense rather than a capital spend. There’s
usually little or no financial outlay in terms of hardware and IT
infrastructure, and you pay a monthly fee to use the product, which is based on
the number of users you have. Some businesses prefer a capital spend and to
‘own’ the software. Others prefer an operational cost, as with the cloud. For
cloud-based applications, you also need a reliable internet connection, and in
some sectors there can be issues with the geography in which the data is
actually held. Many mainstream business software vendors are working to
transfer their traditional on-premise applications in to the cloud. From a
technical point of view, it is not as straightforward as it may first appear.
Once it has achieved, the results are arguably superior to applications that
have been developed as purely cloud-based applications.
Next, companies which might not be well-suited for this type
of software are those companies from small to middle-sized companies. These
companies have senior finance professionals and they concern about security and
the lack of information and understanding about cloud technology which are the
main reasons for organizations are staying away from cloud ERP. For the vast majority
of businesses, modern commercial cloud applications provide exceptionally high
levels of security, including data protection and back-up, and are usually more
secure than the majority of on-premise applications
What are the advantages and disadvantages of
using cloud based enterprise applications?
Advantages of
Cloud Computing
Cloud computing offers numerous advantages both to
end users and businesses of all sizes. The obvious huge advantage is that you
no more have to support the infrastructure or have the knowledge necessary to
develop and maintain the infrastructure, development environment or
application, as were things up until recently. The burden has been lifted and
someone else is taking care of all that. Business are now able to focus on
their core business by outsourcing all the hassle of IT infrastructure.
Cost Efficiency
This is the biggest advantage of
cloud computing, achieved by the elimination of the investment in stand-alone
software or servers. By leveraging cloud’s capabilities, companies can save on
licensing fees and at the same time eliminate overhead charges such as the cost
of data storage, software updates, management etc.
The cloud is in general available
at much cheaper rates than traditional approaches and can significantly lower
the overall IT expenses. At the same time, convenient and scalable charging
models have emerged (such as one-time-payment and pay-as-you-go), making the
cloud even more attractive.
If you want to get more technical
and analytical, cloud computing delivers a better cash flow by eliminating the
capital expense (CAPEX) associated with developing and maintaining the server
infrastructure.
Convenience and continuous
availability
Public clouds offer services that
are available wherever the end user might be located. This approach enables
easy access to information and accommodates the needs of users in different
time zones and geographic locations. As a side benefit, collaboration booms
since it is now easier than ever to access, view and modify shared documents
and files.
Moreover, service uptime is in
most cases guaranteed, providing in that way continuous availability of
resources. The various cloud vendors typically use multiple servers for maximum
redundancy. In case of system failure, alternative instances are automatically
spawned on other machines.
Backup and Recovery
The process of backing up and
recovering data is simplified since those now reside on the cloud and not on a
physical device. The various cloud providers offer reliable and flexible
backup/recovery solutions. In some cases, the cloud itself is used solely as a
backup repository of the data located in local computers.
Cloud is environmentally friendly
The cloud is in general more
efficient than the typical IT infrastructure and It takes fewer resources to
compute, thus saving energy. For example, when servers are not used, the
infrastructure normally scales down, freeing up resources and consuming less
power. At any moment, only the resources that are truly needed are consumed by
the system.
Resiliency and Redundancy
A cloud deployment is usually
built on a robust architecture thus providing resiliency and redundancy to its
users. The cloud offers automatic failover between hardware platforms out of
the box, while disaster recovery services are also often included.
Scalability and Performance
Scalability is a built-in feature
for cloud deployments. Cloud instances are deployed automatically only when
needed and as a result, you pay only for the applications and data storage you
need. Hand in hand, also comes elasticity, since clouds can be scaled to meet
your changing IT system demands.
Regarding performance, the
systems utilize distributed architectures which offer excellent speed of
computations. Again, it is the provider’s responsibility to ensure that your
services run on cutting edge machinery. Instances can be added instantly for
improved performance and customers have access to the total resources of the
cloud’s core hardware via their dashboards.
Quick deployment and ease of
integration
A cloud system can be up and
running in a very short period, making quick deployment a key benefit. On the
same aspect, the introduction of a new user in the system happens
instantaneously, eliminating waiting periods.
Furthermore, software integration
occurs automatically and organically in cloud installations. A business is
allowed to choose the services and applications that best suit their
preferences, while there is minimum effort in customizing and integrating those
applications.
Increased Storage Capacity
The cloud can accommodate and
store much more data compared to a personal computer and in a way offers almost
unlimited storage capacity. It eliminates worries about running out of storage
space and at the same time It spares businesses the need to upgrade their
computer hardware, further reducing the overall IT cost.
Device Diversity and Location
Independence
Cloud computing services can be
accessed via a plethora of electronic devices that are able to have access to
the internet. These devices include not only the traditional PCs, but also
smartphones, tablets etc. With the cloud, the “Bring your own device” (BYOD)
policy can be easily adopted, permitting employees to bring personally owned
mobile devices to their workplace.
An end-user might decide not only
which device to use, but also where to access the service from. There is no
limitation of place and medium. We can access our applications and data
anywhere in the world, making this method very attractive to people. Cloud
computing is in that way especially appealing to international companies as it
offers the flexibility for its employees to access company files wherever they
are.
Smaller learning curve
Cloud applications usually entail
smaller learning curves since people are quietly used to them. Users find it
easier to adopt them and come up to speed much faster. Main examples of this
are applications like GMail and Google Docs.
Disadvantages
of Cloud Computing
As made clear from the above, cloud computing is a
tool that offers enormous benefits to its adopters. However, being a tool, it
also comes with its set of problems and inefficiencies. Let’s address the most
significant ones.
Security and privacy in the Cloud
Security is the biggest concern
when it comes to cloud computing. By leveraging a remote cloud based
infrastructure, a company essentially gives away private data and information,
things that might be sensitive and confidential. It is then up to the cloud
service provider to manage, protect and retain them, thus the provider’s
reliability is very critical. A company’s existence might be put in jeopardy,
so all possible alternatives should be explored before a decision. On the same
note, even end users might feel uncomfortable surrendering their data to a third
party.
Similarly, privacy in the cloud
is another huge issue. Companies and users have to trust their cloud service
vendors that they will protect their data from unauthorized users. The various
stories of data loss and password leakage in the media does not help to
reassure some of the most concerned users.
Dependency and vendor lock-in
One of the major disadvantages of
cloud computing is the implicit dependency on the provider. This is what the
industry calls “vendor lock-in” since it is difficult, and sometimes
impossible, to migrate from a provider once you have rolled with him. If a user
wishes to switch to some other provider, then it can be really painful and
cumbersome to transfer huge data from the old provider to the new one. This is
another reason why you should carefully and thoroughly contemplate all options
when picking a vendor.
Technical Difficulties and
Downtime
Certainly the smaller business
will enjoy not having to deal with the daily technical issues and will prefer
handing those to an established IT company, however you should keep in mind
that all systems might face dysfunctions from time to time. Outage and downtime
is possible even to the best cloud service providers, as the past has shown.
Additionally, you should remember
that the whole setup is dependent on internet access, thus any network or
connectivity problems will render the setup useless. As a minor detail, also
keep in mind that it might take several minutes for the cloud to detect a
server fault and launch a new instance from an image snapshot.
Limited control and flexibility
Since the applications and
services run on remote, third party virtual environments, companies and users
have limited control over the function and execution of the hardware and
software. Moreover, since remote software is being used, it usually lacks the
features of an application running locally.
Increased Vulnerability
Related to the security and
privacy mentioned before, note that cloud based solutions are exposed on the
public internet and are thus a more vulnerable target for malicious users and
hackers. Nothing on the Internet is completely secure and even the biggest
players suffer from serious attacks and security breaches. Due to the
interdependency of the system, If there is a compromise one one of the machines
that data is stored, there might be a leakage of personal information to the
world.
What
people, organization and technology issues should be addressed in deciding
whether to use a conventional CRM system versus a cloud based version?
People
Risk assessment it is hard to assess the risk
when the company does not own the infrastructure that support ERM and CRM
system.
Dependability: companies using cloud based CRM
and ERP solution might become dependent of their providers since they do not
store the data and might not be able easily export. It to another system to
require.
Organizational
Human resource optimization: while traditional
ERP and CRM solutions demand for technical staff cloud based solution allow to
optimize HR to focus on operation
Technology:
Security: using the web as infrastructure,
cloud-based ERP and CRM solution have difficulties in offering security-comfort
to companies that on sensible data
Available due to web-failure tolerant model,
cloud based ERP and CRM solution suffer from availability issue that might
cause business operation failures
