Customer Relationship Management: Online or Offline?

Posted October 8, 2007 By Nick Weynand |

CRM stands for “Customer Relationship Management” and any company that has prospects and customers needs it. How it’s handled is different across the board and depends on many factors. In July of this year, our company made the decision to migrate away from ACT! (an offline, software-based CRM solution) to Salesforce.com (an online, service-based solution). There are advantages and disadvantages to going with an offline or online CRM system and this article attempts to discuss these. I’ll also briefly discuss our migration so you know what to watch out for if your company finds itself moving from one CRM solution to another.

Offline CRM

Even before our company was incorporated in October of 2003, we used ACT! (http://www.act.com) to handle all of our customers’ information. ACT! is probably the world’s most popular offline CRM solution and it has many competitors such as Goldmine and SalesLogix. ACT! is considered an offline CRM system because it comes packaged as software that you install on your computer or local network and access locally. In fact, you don’t even have to have an Internet connection to access data stored in ACT!.
Handling your customer relationship management with software in an offline environment has advantages and disadvantages:

Advantages of Offline CRM

Security

An offline CRM solution exists as software on your computer or your local area network. One advantage with this arrangement is its superior security. If set up correctly, your computer or network is secure and your data is not on the Web for anyone to hack into. Also, logging into your offline CRM system requires that the user be physically in front of a computer that has the software installed. This is more secure than a Web-based solution that allows users access from anywhere.

One-Time Cost

Most offline CRM solutions are sold as software with a one-time license fee. For example, ACT! retails for around $150 and you only have to pay this once if you never want to upgrade the software. If you’re not looking for a long-term expense, software-based CRM is the way to go.

Customization

Because offline CRM consists of software that you install on your computer, you can get an advanced user to recode the software and customize the CRM program to fit your specific needs. Many online CRM solutions are customizable to an extent, but with an offline solution, the possibilities are usually limitless.

Disadvantages of Offline CRM

Software Becomes Obsolete

Because offline CRM solutions exist as software that gets installed, as time goes by, the software becomes older. Many of the providers offer updates but you have to install the updates yourself and you always have to pay when a new version comes out.

Integration Isn’t Easy

The security advantage discussed earlier presents a disadvantage as well. Integrating your CRM system with other systems, especially online ones, can present a challenge. Usually an offline CRM program is locked down on a local computer or private network so letting other systems gain access isn’t easy.

Online CRM

With the arrival of the Internetcame online customer relationship management. An online CRM system exists solely on the Web and users log on with a Web browser and an Internet connection. The online CRM leader is Salesforce.com, serving over 35,000 customers (according to their home page).

Advantages of Online CRM

Ease of Use

Online CRM systems are often easy to use. They don’t require that you install any software and there’s a short learning curve. Generally, if you can work a Web site, you can work an online CRM system. You can also get up and running very quickly; it’s usually just a matter of signing up.

Access from Anywhere

Online CRM is just that – online. It is perfect for someone who works from multiple locations, like home and the office, or for someone whose job requires travel. Users don’t have to be on a single computer to access their customer data; instead, they just log on with a Web browser from anywhere that has an Internet connection.

Integration with Other Systems

Just as offline CRM systems make integration difficult, online CRM solutions are made for integration. For example, Salesforce.com offers an API that allows you to integrate your data with all kinds of other systems. For example, you can have a contact form on your Web site that dumps data directly into your online CRM system. An offline CRM program usually requires an import, which adds another step.

Service not Software

Online CRM is a service, not software. One thing you pay for is consistent and immediate upgrades. When the system gets upgraded, you don’t have to do anything. Simply log in the next time you need to use it and you’ll see the improvements.

Disadvantages of Online CRM

Security

Online CRM systems store your data in an online database, accessible by the Web. Anything on the Web is inherently less secure than something locked down on a single computer or within a private network.

Ongoing Cost

CRM solutions that are online are usually offered as an ongoing service rather than software with one license fee. As a result, most online CRM systems charge a monthly or yearly subscription fee. In the long run, online CRM solutions are usually more expensive than their software-based counterparts.

Our Switch from ACT! to Salesforce.com

After weighing the advantages and disadvantages of the two models for managing customer data, our company decided to move from an offline system (ACT!) to an online system (Salesforce.com). Four months after making the switch, we’re very happy with our decision. We made the move because:

After making the decision to switch, we needed to transfer our existing customer data from ACT! to Salesforce.com. The export/import process wasn’t easy, so if you’re going through this switch, be prepared. It took some advanced knowledge of the existing CRM program and an Excel spreadsheet as an intermediary step. We weren’t able to get all of our data transferred over directly, so we still had to manually enter some of it so that our new database would be complete.
Now that we’re up and running with the new system, our team is working more efficiently and our customer data is easier to manage. If you’re deciding on a new CRM solution, think about the advantages and disadvantages of an online system versus an offline system and make the best decision for your business.

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About the Author

Nick Weynand is the founder, president and strategy director for TradeMark Media. Nick provides strategy consulting for clients and manages the business activities of TradeMark Media.

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