Hosted CRM Solutions

Hosted or on-demand (or even SaaS) CRM refers to a solution where much or all of the functionality of a CRM solution is outsourced to a solution provider that is not located on the premises of the organization. Usually this simplifies implementation since additional hardware and even software is not required and the pricing structures are highly predictable since providers charge on a monthly basis. In addition, it frees the company to focus on its core business and on making effective use of the solution.
Third party research has shown that typically over 80 percent of companies that use a hosted CRM solution achieve a positive ROI. It is a particularly effective solution for smaller organizations where the costs of implementing on premise solutions can be too high a barrier to entry. However, hosted solutions do have drawbacks. The primary drawbacks are flexibility and customization. Hosted providers cannot truly integrate their solutions into existing operations, whereas on-premise CRM solutions can be tailored to the particular needs of an organization. Furthermore, on-premise solutions are easier to integrate into a company’s existing business processes and applications.

For small- to medium-size businesses, however, the price is right when it comes to hosted CRM tools. By paying per user per month, a company can gain access to a sophisticated application in a mere 30 days without having to burden its IT department or cut off its cash flow. And of particularly good news to growing companies is the fact that today’s on-demand CRM solutions are highly scalable and easy to upgrade.

Advantages 

The advantages to a hosted CRM solution for a business are compelling. A predictable pricing structure makes it easy to calculate ROI and predict cost. Rapid deployment can have your team up and running in days if needed. Easy and automatic upgrades can take place without your IT staff's intervention. Flexible options and a wide range of add-on tools and capabilities are also available because of hosted CRM's success.
Other potential advantages can include lower operating costs, greater safety because of automatic off-site backup and a lower overall IT cost. However, these advantages can be matched in many cases by a good on premise solution.

Cost 

Hosted CRM solutions are usually priced in two parts. The first is a setup or overall fee that can be one time or monthly and can range from free to as high as $200 per month or several thousand dollars one-off. Much of that cost depends on the size of the installation. Then there is typically a per seat per month fee that can be as little as $15 per month to as much as $100 per month depending on the solution and options. For a small business of about ten to twenty seats, a typical cost would be a $200 setup and $40 per seat per month.