Open Source CRM Software: "Tricky," Impossible, or Troublesome?

At Inc. Magazine, Bryce McDonnell offers a testimonial of how he uses free, open source CRM software to track leads from Twitter, Facebook, and online advertising. His promotions have been successful enough to generate more than 1,000 leads, requiring a strong CRM software solution for filtering and follow-up.

Open source solutions, like the Fat Free CRM package McDonnell uses, often attract attention for their price tags: "free." However, McDonnell offers a caveat for company leaders hoping to score a big win with free CRM software:

One word of caution: Installing Fat Free is a bit tricky, especially if you're not comfortable with software code. But once the application is installed, you don't have to be a Web developer to use it.

For small office/home office CRM users, this warning can lead to a big money drain. If you're not a professional web developer, free CRM software may require hours of tedious installation on the front end of a launch. A consultant who charges $100 per hour could lose thousands of dollars in opportunity cost on an installation that requires server provisioning and custom installation, especially on low-cost, shared server accounts designed to save money.

At larger organizations, free CRM software that gets tagged on to the responsibilities of web teams can often sour a whole enterprise on the idea. Although the work that open source teams do can be impressive, the challenge of keeping servers secured and code updated against threats often falls to the end user. Marketing teams won't like hearing that a critical website push is being delayed by the maintenance of an internal application. Likewise, users will get frustrated if a CRM system crashes during a time when no dedicated technicians are available to help.

SugarCRM has already shown the market potential for a hosted CRM model based on free software. Understanding that "free" doesn't mean "instant" or "maintenance-free" is the first step toward successfully integrating open source CRM tools into the enterprise.

Is Your CRM System a Hoax?

That's the question Jerome Pineau asked clients of CRM software purchasers in a recent post on his personal blog.

Pineau was reacting to an article by Matt Wallach for Destination CRM Magazine, exploring the blurred distinctions between hosted CRM and on-premise CRM systems. Wallach called out unscrupulous vendors for passing off hardware installations as "SaaS" products, leveraging the hot market for cloud computing in the C-Suite.

Putting aside the ethical debate about how some vendors sell CRM software, Pineau challenges customer service professionals to ask what they want to get from CRM systems in the first place. Business intelligence tools have evolved to the point where they can generate reasonably good insight from the types of data once stored exclusively in CRM systems. What else, Pineau argues, can a company leader learn from CRM software that he or she cannot learn from taking their top five clients out to lunch?

For large companies with a handful of key clients, this might be the case. However, the CRM software market thrives by meeting the needs of small to medium business owners who rely on increasingly distributed sales and service teams to provide consistent client experiences. Companies may not have as simple a choice as abandoning CRM software for BI tools, but they do have the power to implement CRM systems more effectively. As Pineau points out, many failed CRM implementations stem from false hopes about what new software can do for a company's culture. When tools support a team's shared vision, that team can succeed.

Ultimately, the search for the best CRM software comes down to a solution that fits a team, a business, and a collection of customers. No CRM software can completely automate the customer relationship. And, as Pineau argues, a totally automated solution often loses credibility with customers who crave the insight and the empathy that only human agents can provide.

Critical Questions for Hosted CRM Users

In my last post, I offered a quick view of the recent Danger/Sidekick data loss. It's an event that has hosted CRM users worried for good reason. After all, this kind of data loss can bring Perez Hilton's business to a halt, so what could it do to you if you lost all of your leads and contacts?

For CIOs and other technology leaders, this list of questions can offer peace of mind:

• Where are hosted CRM records stored? "The Cloud" isn't good enough. Careful CIOs should know the location of a vendor's primary data center, along with the security provisions in place to protect data from theft, fire, flood, or other disaster.

• How often are backups of CRM records made, and where are backups stored? CIOs should listen for "at least daily" and "offsite." A backhoe driving into the data backbone of your primary data center shouldn't cause your CRM applications to become inaccessible.

• How quickly can a hosted CRM system be restored from a backup? User error at the data center caused the total erasure of Danger/Microsoft's entire user library. With a solid backup plan in place, users could have been restored within hours.

• How can records be exported from a hosted CRM system, if necessary? Record export isn't just a CRM software feature that lets you migrate platforms. It's an essential tool that allows your team convert raw data into actionable spreadsheets or local databases in the event of a dire emergency at the server farm.

Of course, these are all questions you should ask, even if you intend for your CRM software to be hosted within your own facility. Treat data the same, whether your "cloud" is in your own building or out at a mystery data facility. Otherwise, you could end up like a frustrated Sidekick user.

Danger in the Cloud for CRM Software Users?

I just got back from a week out of the office, and I mostly relied on my smartphone to take care of client requests and to keep on top of the news. Sure enough, the week that I was away from my desk, one of the biggest tech stories of the year broke out:

Danger, the company that created the popular Sidekick smartphone, notified users that all of the data on their servers was mistakenly wiped out, during what should have been a routine system upgrade. Accusations are flying:

• T-Mobile, the U.S. carrier supporting the Sidekick, has offered service credits for customers who choose not to defect. They blame Danger for poor data handling procedures.
• Danger representatives have told users that they blame the vendor hired to manage their storage.
• The storage vendor claims that Danger is their first client that didn't have a comprehensive backup plan for critical user data.

Sidekicks aren't very common in the business world these days, unless you're a celebrity blogger. The hardware, revolutionary when it was released a few years ago, doesn't hold a candle to today's modern smartphones with loads of internal memory. The phones' lack of storage is why so much user data was on a central server in the first place.

However, CRM software users have been shaking in their boots over these events for a few specific reasons:

• Danger was purchased, a few years ago, by Microsoft. Essentially, Microsoft employees are now on record as having failed to back up critical customer data. Microsoft has been trying (and failing) to reposition Danger as a distant subsidiary instead of as a core business unit.
• Many CIOs now wonder whether Microsoft hosted CRM services can be trusted, since a "simple" service like the Sidekick could be so easily purged.
• And just about every CIO wonders how easily this could happen at the hosting provider for their own CRM applications. After all, "if it can happen at Microsoft..."

In my next post, I'll walk through some of the reasons CIOs might use this news to revisit the debate between hosted CRM and locally-installed CRM software...

(Follow this link to Part Two...)

Hosted CRM vs. Server Virtualization

As the sluggish economy impacts CIOs budget planning for the remainder of the fiscal year (and into the next), some technology advocates have revisited the debate over whether server virtualization initiatives save more money in the long run compared to "cloud-based" CRM applications.

Web-based, hosted CRM applications allow users to connect through any web browser, especially when using "dumb terminals" with little to no configuration. Essentially, a traveling sales agent with a computing mishap can walk into any retailer, purchase a bare-bones netbook or laptop with a supported browser, and reconnect to his or her customer relationship management tools instantly. However, "dumb" clients often lack the tight security demanded by enterprise IT managers.

On the other hand, server virtualization offers CIOs the ability to serve an entire desktop environment to an end user, not just a web application. Popular desktop-based CRM applications can be virtualized, along with other essential office software suites. IT management professionals enjoy the security of knowing that no customer data can live on "dumb terminals" in the field, especially if security measures prevent users from copying or pasting information from an active server session into a local document. However, a field sales professional must still provision equipment for use with a virtualized server environment. Client software and VPN tools must be installed and configured, often requiring direct support from IT teams.

Critics also worry that misconfigured server virtualization projects can cause companies to overspend on hardware, instead of investing budgets into CRM applications with proven ROI. Sales agents accustomed to buying the very best portable hardware might not realize that even a barebones client can enjoy the full power of a remote server. Likewise, conservative system administrators may fail to push rack mounted servers to their full potential, requiring extra backend costs.

As companies continue to develop remote CRM software strategies, hosted CRM solutions maintain an edge in both pricing and functionality. Yet, server virtualization solutions are gaining momentum, especially as end users become more comfortable with remote desktop technology.

Hosted CRM Vendors Debate Multi-Tenancy

If you're a small business thinking about CRM software, isn't it nice to dream about the day that your business grows so large that vendors will start to fight about whether you've outgrown your hosted CRM solution? That's the debate that some CRM software providers have been having both internally and externally. Assuming that nearly all CRM applications will one day be accessed across networks instead of solely on the desktop, experts wonder whether single clients can sustain versions of hosted CRM systems that were intended for thousands of shared users?

Zoli Erdos picks up the debate on the Cloud Ave. blog, where some of his colleagues believe that Software as a Service can only encompass "multi-tenant" development plans. Many SaaS CRM systems make financial sense because significant maintenance, hosting, and security costs on a single server cluster can be shared among thousands of clients. For vendors that outsource storage and processing to cloud systems, like RackSpace or Amazon, servers themselves may not even exist in the forms to which we have become accustomed.

However, some of the biggest potential clients for hosted CRM systems have no real desire to see their data floating "on the cloud." They're happy to pay for secure, in-house hosting and development in exchange for assurances of tighter security and guaranteed uptime. The leveraged power of a SaaS application becomes tougher to manage when a company tries to scale its hosted CRM system to reach 99% uptime and beyond. As a result, some vendors choose to build server "pods" to handle single clients or small clusters of clients. Other vendors have focused instead on powerful computing arrays that leverage CPU time and storage across millions of simultaneous users.

The good news is, regardless of who is "right" in the ongoing debate, strong competition in the CRM software arena makes it easier and more affordable for companies of any size to take advantage of the latest tools and strategies for customer relationship management.

Gen Y's Impact Felt Through Hosted CRM and Smartphones

If you see fewer sales professionals unboxing their laptops in airport security lines, you're not alone. Thanks to hosted CRM applications and a new wave of sophisticated smartphones, more field agents prefer to leave their laptops at the office. The shift has a little to do with technology and a lot to do with the changing demographic of the mobile workforce.

For the past ten to fifteen years, the most serious sales professionals hit the road with ThinkPads and other business laptops. In addition to PowerPoint slides and sales projections, those portable computers often contained sophisticated desktop CRM applications. Long before Wi-Fi became ubiquitous, sales professionals would keep notes and add new customers on their laptops, synchronizing information with the rest of their office by connecting devices to servers upon their return.

However, tales of lost and damaged laptops pervade the IT service space. Without wireless backup, desktop CRM applications are still at the mercy of dropped hard drives, cracked screens, and misplaced laptop bags. Hosted CRM systems solved the problems of lost data after a laptop failure, but replacing equipment can put a strain on company budgets during tight economic times.

Enter the smartphone. Though hard-core IT junkies note that today's fastest smartphone processors only rival laptop chips from a few years ago, today's phones have just enough power to handle many hosted CRM applications. Furthermore, as Generation Y workers join companies in droves, a new wave of sales professionals already comfortable with sleek phones sees no problems using them for CRM as well as for calls and texting.

This shift is good news for CIOs, who have discovered that they can replace many of their field laptops with less expensive and more durable smartphones. Many carriers subsidize the cost of new smartphones, making them even more appealing. Their learning curve tends to be offset by the convenience of having one less bulky item to carry in the field.

Granted, some CRM systems still don't play nice with all smartphones. Internal company systems often fare far worse than hosted CRM applications, since they require middleware or server licenses that can negate other cost savings. Nonetheless, with more companies adopting hosted CRM applications, the transition to smartphone-based CRM should do great things for company budgets, not to mention sales professionals' shoulders.

Positioning Hosted CRM Software as a Network

Software as a Service (SaaN) offerings have grown in popularity among small business owners, especially since web-based services often cost far less per month to maintain than typical boxed small business CRM packages. For instance, a popular accounting and invoicing solution that costs $199 per year to keep current results in a monthly spend of over $16 for a single user. Competing web services that cost $12 or less per seat per month enjoy an advantage, both from a cash flow standpoint as well as from the perspective of delivering overall value to a growing business.

Mike McDerment, the CEO of Toronto-based FreshBooks, has even bigger ideas for his small business CRM suite. In a recent video and blog post, McDerment challenged customers to ask for more from their small business CRM software by integrating more of their business operations into networked web applications. Using FreshBooks as an example, McDerment illustrated how users can enjoy the convenience of invoicing on a hosted CRM platform while receiving invoices and tracking tasks from contractors or vendors from within the same system.

For small business CRM users, the power to integrate accounts payable into the same systems can unlock many of the same benefits as enterprise-level business intelligence software. Users can make more accurate cost projections, while enjoying more visibility into contractors' task progress. Integrated credit card processing improves cash flow, since users who rebill subcontractor work can connect invoices to specific tasks and jobs. A networked small business CRM solution can also evolve into a job referral platform, since users become more likely to select vendors already using the same hosted CRM tools.

McDerment calls this new way of thinking about hosted CRM a move toward "Software as a Network." Instead of viewing CRM applications and other web tools as silos, he uses Facebook as a model for what can happen when multiple software tools within the same shared destination site. While comments at TechCrunch and other blogs suggest that SaaN may not replace SaaS as a buzzword anytime soon, users of competing hosted CRM applications may find themselves craving the same kind of streamlined functionality as FreshBooks integrated business management suite.

Sugar Express Raises Questions About Hosted CRM and Open Source

If your company develops open source CRM software, what's the incentive for users to pay for it? That's the question most business owners new to CRM systems ask when they first encounter SugarCRM. Developers like to bundle SugarCRM as "free software" for their clients, but companies without server-savvy professionals on staff soon fall victim to the chores of maintaining the right hardware to keep their CRM systems secure and stable.

In the case of SugarCRM, "open source" may mean that you can download and install the software for free, but that you will almost certainly invest resources into equipment and IT staff. That's one reason why the SugarCRM team launched Sugar Express, a hosted CRM platform using SugarCRM at its core.

Pricing for SugarCRM, which includes an initial base of five users and scales to a maximum of ten users, reminds many industry analysts more of Zoho's low-cost hosted CRM offering than many of the service's premium competitors.

For small shops struggling with their current SugarCRM implementation, the hosted CRM option also features paid data migration services. End users experience the same CRM applications they already know, just hosted on SugarCRM's servers instead of their own.

For prospective SMBs and enterprise customers, Sugar Express represents a gateway from hosted CRM to a full-blown internal implementation. By getting users to start with a ten-seat license of Sugar Express, the company hopes to grow the kinds of clients that will more easily migrate to the professional server editions of SugarCRM.

Eight Building Blocks for Success of CRM Software Still No Clue to Its Future

In 2001, Gartner analysts John Radcliffe, Jennifer Kirby, and Ed Thompson published "The Eight Building Blocks of CRM." This white paper helped IT leaders understand the impact of customer relationship management in the workplace, while providing a consistent structure by which purchasers could evaluate CRM applications. (Gartner's isn't the only checklist, either.)

In the years since, even Gartner has admitted that the world of CRM has changed. The document itself now contains a disclaimer that it "may not reflect current conditions." For many CIOs, the building blocks remain as important as ever, even though the deployment of CRM systems has largely shifted to the web.

Those eight fundamental "building blocks" remain:

• Vision. Effective CRM software requires support from the boardroom to the basement.
• Strategy. CRM software should not be a destination in itself; it should support broader goals.
• Customer Experience. The customer should drive the tools, not the other way around.
• Organizational Collaboration. CRM should bring departments together, not serve as a wedge between them.
• Process. When used effectively, CRM systems streamline and codify the things that make your organization special.
• Information. The more you know, the better you can compete through service.
• Technology. Customer demands should drive technology acquisitions.
• Metrics. CRM systems should provide clear results while helping other teams track their own objectives.

Nearly ten years after the creation of the eight building blocks, Gartner invited some of the top leaders from CRM software vendors to discuss how their products and services live up to the vision of an ideal CRM system. As Stuart Lauchlan from MyCustomer.com discovered, the vendors could only "agree to disagree."

• Panelists agreed that only about 20-30% of their clients actively measure the ROI from CRM software implementations. They couldn't agree on why large companies can't or won't measure their success.
• Panelists disagreed over the most challenging of the eight building blocks to accomplish. Data, customer experience, and processes came up in conversation as consistent challenges for organizations.
• Roughly half of CRM software will be web-based by 2020, according to panelists. However, the evolution of technology will erase the distinction between "desktop" and "cloud," making the question irrelevant.

Lauchlan provides more coverage of the CRM software discussion, along with Gartner's own insight into CRM challenges over the next decade.

GMail Outage Raises Concerns About Hosted CRM Backups

CRM software experts have expressed their concerns about hosted CRM applications for the past few years. Even as modern web scripting makes hosted apps more desktop-like, their issues are with the challenges that CRM software vendors face when choosing an interoperability strategy.

From a programming point of view, some vendors prefer not to spend time on a feature that makes it easy for users to export data to a competitor's service. And for marketers and sales professionals, even hinting at the possibility of export functionality seems to feel wrong -- like you're bringing up the possibility of a failed implementation right from the start.

It's one thing to debate this issue in the wake of the Entellium fiasco. However, the need to ensure backups of both systems and data emerged recently when Google's GMail service experienced a four-hour outage. Business customers, who pay fees for additional features, were incensed. And critics of software as a service wondered aloud whether any provider could offer truly error-free service.

In my experience, it's better to think about when a vendor will experience an unexpected system failure -- not "if." Thinking this way puts an outage into perspective:

• What's your threshold for failure?
• How long could you run your business without a hosted CRM tool?
• How quickly could you migrate to a backup solution?
• How much extra are you willing to pay for a feature that you may never need?

While some vendors have made export functionality part of their sales pitch, others leave it up to you to ferret out the information. Based on advice from industry experts, here are some tips that can help you get over your fear of leaving data on the cloud.

• Learn how your team can backup and restore data from your hosted CRM software on a regular basis. A legitimate vendor will have some way to do this, even if it lacks official documentation.
• Ask for specific details about how a prospective hosted CRM vendor operates their servers, especially their backup systems.
• Make the right decision for the kind of business you operate. A mom-and-pop marketing agency does not always need the kind of redundancy as a bank.

Following these steps can reduce your stress level while opening up real opportunities to save money and to improve customer service.

Google Gears for Hosted CRM

If you've been following developments in the web application market, it's no surprise that CRM software enthusiasts are gasping at today's announcement of Google Gears for GMail.

For the uninitiated, Google Gears is a small software patch that allows a web browser to download specific pieces of software code to be run once the browser has disconnected from the network. This afternoon, Google's developers released a version of Gears that allows its highly popular e-mail service to operate more like a desktop e-mail client when access to the web has been interrupted.

Any sales professional who has endured the pain of a network disconnection while using a hosted CRM system can understand the promise of today's development. Users of desktop CRM applications may not feel like this is big news, especially if their systems synchronize with master databases. However, the growing popularity of browser-based CRM software has created demand for highly flexible tools that can be used in the field or during flight.

Google Gears also addresses another common concern of web-based application users: that a sudden communications or power failure can cause them to lose key information about a deal or a client. Hosted CRM applications with the ability to cache data like Google Gears can compete for customers against traditional, desktop-based CRM applications.

Already, developers for a number of hosted CRM applications are fielding questions from clients about whether an offline data cache styled after Google Gears might be included in their future releases. As developers find ways to extend the reach of web browsers, enhancements to hosted CRM applications can ultimately blur the line between what's on the web and what's on the desktop.

Will Oracle Updates Shift Hosted CRM Pricing?

According to Barney Beal, company leaders at Oracle used today's product announcement to challenge other hosted CRM vendors on pricing and on features. For "Release 16" of Oracle CRM On Demand, programmers focused on usability, reporting, and industry-specific customization. CRM software experts note that three of this releases most important updates are designed to give Oracle a strategic advantage over Salesforce.com and other cloud-based CRM systems.

No "Nickel and Diming." Company leaders told the press that hosted CRM clients have become tired of paying extra for simple add-ons. Instead, Release 16 now offers an unlimited number of "custom objects."

Single Tenancy with Benefits. Maintaining your own hardware and software installation appeals to companies that like the idea of hosted CRM applications, but don't want the risk of company data being stored at third party server farms. However, running a parallel installation of popular CRM applications often means waiting for new features, upgrades, and security fixes. Release 16 now features a coordinated updating tool that allows "single tenant" clients access to updates and patches at the same time as Oracle's other subscribers.

On Site Solutions. Now that updates and patches can be centrally coordinated, Oracle's site-specific deployment service appeals to privacy-sensitive firms more than ever. Although an on-site CRM application with dedicated servers doesn't fit the standard definition of "hosted CRM," end users and administrators enjoy many of the same benefits.

These three features can help get some CIOs revisiting the idea of hosted CRM, even if the "cloud" lives within one of their company's own buildings. As competition heats up for business in the hosted CRM arena, industry watchers can't wait to see what new pricing tiers and service innovations will emerge over the next year in response to Oracle's announcements.

Can CRM Systems Change Our Government

The new presidential administration has been using a popular hosted CRM tool to collect information about Americans, and you probably didn't even know it.

When the Obama/Biden Transition Team unveiled the Change.gov website shortly after the 2008 presidential election, they invited citizens to create accounts and share ideas on how to change our government and our country. Site managers promised that the most popular ideas, as ranked by site members, would be printed and bound into a Citizens' Briefing Book to help new administrators understand the public's demands.

If it seems like the team was able to get the site launched and running very quickly, that's because they did it with the help of a hosted CRM application from Salesforce.com. Site managers made a few cosmetic customization to the "CRM Ideas" tool -- the same system used by Starbucks and Dell. This strategy allowed them to deploy quickly, and to scale rapidly -- especially as media coverage picked up when transition officials started responding to citizen questions and ideas.

Now that President Obama has been sworn in, it's time to wonder how this pre-inaugural experiment could affect the way that government agencies use hosted CRM applications in the future. With arguably the broadest collection of personal data at their disposal, can hosted CRM tools help agencies use that information more efficiently. Gathering real feedback from citizens using a proven tool shows promise for the next few years.

Making Hosted CRM Make Sense to Your CFO

Yesterday, I made a quick reference about CFOs and CIOs who battle each other over every scrap of a company's IT budget. As we inch our way into the new year, it's becoming obvious that budgets are under tight scrutiny at companies of all sizes.

Solo entrepreneurs are looking at every penny going into and going out of their enterprise. Startup companies once known for lavish parties and broad hiring are scaling back and laying off. In this environment, it might sound like a tough pitch to get CRM software approved in your organization.

Hosted CRM is a great solution, especially for smaller companies. There's no hardware to install, and it can automatically be used in the field with the help of wireless cards. Many hosted CRM vendors now offer limited trials or discounted startup costs for new clients.

Still, any new hosted CRM project must first past muster with the executive who signs the checks. You'll need to convince your CIO that your bottom line will improve when you implement hosted CRM. And, if you're the person who pays the bills in your company, you may even need to convince yourself.

White papers and case studies that profile the results of similar hosted CRM implentations in your industry can help you determine whether you're making the right investment. Thanks to competition and a gradual decrease in technology costs, hosted CRM services seem to become less expensive every day. Trying one out in a proof of concept on yourself or on a small team can help you decide which platform best suits your needs.

Is Your Prospective Hosted CRM Vendor Just Slapping Their Own Label on Open Source Tools?

Two of my favorite hot-button topics surfaced on Nathan Eddy's list of five trends to watch in 2009. Cloud computing has become a huge buzzword (or buzz phrase, really, over the past few years). It's breaking into the big time in a major way, getting a lot of coverage in the mainstream press. However, a simple hosted CRM application -- even one that has been running for years -- is still a form of cloud computing. If you're using a hosted CRM service, consider yourself ahead of the trend!

Another of Eddy's hot trends is open source software. Until recently, open source was the province of dedicated, savvy technicians committed to community development and common standards. As low-cost netbooks ship with flavors of Linux preinstalled, more business customers are becoming exposed to the benefits of community-maintained projects.

However, if you mash these trends up, you run into some potential problems that can cause havoc for prospective hosted CRM clients. Free software isn't always the right software for your business. For instance, the wildly popular OpenOffice still has a long way to go before it can unseat Microsoft Office in the enterprise. Thinking about cloud computing, a clever reseller may successfully rebrand open source CRM tools into their own hosted CRM service -- and still remain unable to integrate it fully into a client's workspace.

Low-cost hosting providers often bundle open source applications in their reseller platforms, making it easy to offer "free CRM" with web hosting packages. As with any hosted data provider, you should ask critical questions about the products and services being offered. Is the hosted CRM software homebrew, or a repackage of existing open source tools? Who supports the server or the software if either crashes. Will modifications made to the software be supported if the community development project updates the core package?

Finally, if the price point for your hosted CRM system seems too good to be true, it probably is. Remember that saving cash in exchange for uptime and productivity doesn't always make the best business sense.

Hosted CRM Helps Charities Ride Out Recession

Yesterday, I dipped into my past experience in public radio and television to show you how CRM software plays an important role in keeping PBS and NPR on the air. Today, I want to look at the methods non-profits from all walks of life are using hosted CRM to support their missions.

When I worked in public radio, CRM software was relatively expensive to purchase and required lots of regular database maintenance. We could justify the cost by looking at the additional revenue we generated by using the tools. However, when I consulted or sat on the boards of smaller non-profits, many of them couldn't even think about raising the kind of money required to manage a sophisticated CRM software solution.

Thanks to today's wave of hosted CRM applications, that's changing. Now, a very small broadcaster can stage an efficient fund drive by using web-based pledge forms. While audience members at home can donate directly through a station's website, operators at a studio can use backend web tools to transfer member information directly into a CRM database. Instead of ramping up staff to handle data entry and paper shredding, volunteers can use borrowed or rented computers to process a pledge online, in real time.

Hosted CRM applications allow charities to ramp up gradually as they grow. A small charity can acquire a single seat license for most hosted CRM tools inexpensively, while gaining the same kind of fundraising power that large organizations enjoy.

Utilizing hosted CRM allows organizations to unify their relationships with donors. In the past, donors would complain of fatigue when receiving newsletters from one branch of an organization, fundraising letters from another, and solicitation calls from a third. Today, hosted CRM tools let multiple departments get a full view of their relationship with a donor. By coordinating outreach efforts and factoring in a donor's history, fundraisers can save money while improving their renewal and conversion rates.

Finally, hosted CRM allows non-profits to tap into their most lucrative resource: the brain power of distributed volunteers. Since most hosted CRM systems can be accessed from any secure web browser, fundraising managers can open access to volunteers around the world for help with data maintenance or donor service. No longer tethered to a home office, non-profits can enable telecommuting volunteers to help provide mission-based services or to manage targeted campaigns. Because local contacts help national charities fundraise more effectively, hosted CRM tools have become a hit with organizations that stage charity events or neighborhood canvassing projects.

Thanks to vendor sponsorships and private donations, sophisticated CRM systems are within reach of most charities, churches, and community organizations. Using these tools effectively still takes effort, but the potential results dwarf the possibilities that existed just a decade ago.

How App Engine Connectivity Enhances CRM Software, Part 2

Yesterday, I offered a brief introduction to the cloud computing services offered by two household names: Google and Amazon.

Companies that like the idea of hosted CRM systems but hate the idea of losing control of their code have started to investigate cloud computing. The recent announcement that Force.com has opened a version of its platform to users of Google App Engine has already started CRM software developers thinking about ways to leverage partnerships with two of the most trusted names in technology.

Developers using the Force.com platform have the ability to build applications that reach far beyond the CRM systems commonly associated with its parent, Salesforce.com. However, the appeal of using the platform lies in its tight connection to customer sales, tracking, and communication tools. The development platform allows companies the luxury of spending only a fraction of previous technology budgets on higher quality sales and service applications.

Meanwhile, the foundation offered by Google App Engine lets companies test new CRM applications and other tools without buying or leasing additional hardware. Best of all, as applications grow and mature over time, the cloud computing platform expands seamlessly to meet demand. Instead of frustrating users with slow server times, applications simply access more processing power on the fly. A taxi-like meter keeps track of the processing units expended by the software, meaning that companies no longer have to waste money on unused resources.

Over on the Amazon cloud, developers enjoy more flexibility to deploy CRM applications in their favorite operating environments. Virtualizing servers gives administrators the flexibility to host a single instance of a tool like SugarCRM, or multiple user desktops connected to a shared ACT database. Expect to hear lots more about CRM systems and cloud computing as we head into 2009.

How App Engine Connectivity Enhances CRM Software, Part 1

The announcement that Force.com has developed a version of its platform for Google App Engine sounds, to most of the sales professionals I know, like tech-speak for "you got chocolate in my peanut butter." Before you can understand how this innovation could impact your business, let's understand exactly what an app engine does, and why you won't find it under the hood of a Dodge.

Google App Engine and Amazon Elastic Compute Cloud are two of the fastest "cloud computing" platforms available for professional developers. Google allows developers to build standalone applications in Python that can be executed by the search company's massive server network. Amazon takes a different approach, offering subscribers the ability to create virtual server images on the e-commerce giant's extensive hardware collection.

In the early days of the web, running CRM software or other sensitive systems required a dedicated server, connected to a pretty hefty Internet backbone. I recall, looking at some old files, that a leased setup like this cost one of my clients about $14,000 per year back in 1999. And the processor in that server was not quite as powerful as the one in my current phone.

Over the years, servers have become smaller, cheaper, more powerful, and more reliable. Yet, when companies lease or buy servers for their CRM applications, they often open themselves up to security and maintenance issues. If the server is located in the office, who gets up at 3am to reboot it if it fails? What happens if someone breaks in and steals it?

Hosted CRM systems solve many of these problems for their subscribers. However, some companies that require full control over their software still need the ability to manage every element of their CRM applications. For these kinds of companies, cloud computing offers the best of both worlds: the convenience of hosted CRM with the precision of custom solutions.

Tomorrow, I'll show you how this combination can extend the reach of corporate CRM systems...

Salesforce "Sigh of Relief" Rally Underscores Importance of CRM Software

Wasn't it great to close out last week with good news about a company? Not just good news, but great news. Over the moon news, if you're a shareholder or a customer of Salesforce.com, one of the leading providers of pay-as-you-go CRM software.

Last quarter, Salesforce generated $276 million from customers that use its CRM software to help their own companies grow their own business. That translated to a profit of over $10 million, making CFOs of other Internet companies blush, fume, or cry.

While analysts typically wish the company had held on to a little more profit, a CRM software company that's in the black telegraphs the strategies that smart sales professionals intend to use over the next year.

It's no surprise, since smart sales professionals understand that affordable CRM software can help them do a lot more with fewer resources in this kind of economy. If you can't spend money on lavish ad campaigns, you can at least find ways to mine you customer database, leverage strong relationships, and grow your orders in this critical quarter.

Salesforce isn't the only game in town, though. While I know plenty of sales professionals that love the service, I know many others that prefer to work with more established players, or prefer to use CRM software that lives on a server that they control completely. Whether you work with Salesforce or with another CRM software vendor, now is a great time to look for quotes from qualified service providers. With competitors looking to steal a little thunder from Salesforce, there are some good deals to be had.