SaaS as a CRM implementation Strategy – Indian Scenario

SaaS as a CRM implementation Strategy Indian Scenario

Relationship marketing is emerging as the core marketing activity for businesses operating in fiercely competitive environments. On average, businesses spend six times more to acquire customers than they do to keep them. Therefore, many firms are now paying more attention to their relationships with existing customers to retain them and increase their share of customer's purchases.

CRM or customer relationship management is a system of processes which businesses use to organize and streamline customer service, give sales staff the customer information they need to achieve higher closure rate, optimize marketing and sales efforts, and help to increase the customer base and revenues. CRM has become backbone enterprise software for many large and SMB companies.

Leading the way for CRM solutions is the Hosted/On-Demand/SaaS paradigm, an implementation strategy where the provider of the software hosts the software for its clients. The software resides at data center maintained by the vendor and user interfaces are made available to the client using internet. On-Demand or Hosted solution saves heavy investments in Hardware, Software and manpower resources. Under this model, customers pay as per their usage instead of investing, owning and managing the complete infrastructure themselves. It is very popular with businesses that don't need to or do not prefer to invest in high cost infrastructure and hence can deploy their capital in their core business activities

In Gartner's view, the Indian CRM market size is about 15 percent of the overall APAC market, second largest in the region, after Australia. Between 2008 and 2013, CRM in India is expected to grow at a CAGR of 12 percent. Software-as-a-service (SaaS) is poised to grow seven times faster than on premises software for the next three years, reports research firmGartner. By 2011, a quarter of new business software will be SaaS. According to a research report, "The market for On-Demand in India is over Rs. 150 crore ($32 million) in 2009 and is expected to grow at a CAGR of 50-60% for the next few years.

Some of the benefits of Hosted CRM application are

Lower initial investment and Total Cost of ownership

Shorter Implementation cycle

Global reach and availability

Frequent and automatic updates

Disaster recovery and business continuity

Software-as-a-Service (SaaS) is going to be the preferred mode for CRM implementation in coming years especially for SMBs. CRM is best suited for hosted model given the fact that sales persons are generally on the move and can therefore work from any location as long as internet bandwidth is available. The other major driver of hosted CRM is the fact that organizations prefer to get started with vanilla applications which makes sure that they focus on user adoption in the initial phase. Lead management, Sales force automation are the two major areas of CRM that are best enabled though the SaaS model.

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