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Why cloud-based CRM systems make sense

Some would say there's a natural affinity between cloud-based technologies and customer relationship management.

"The initial go-to market for cloud-based CRM and related technologies were underserved markets, like the SMB[small and medium-sized business] market, where doing a large on-premises implementation didn't make sense," said Arnab Mishra, vice president, products and solutions at

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Transera.

According to Mishra, one of the last bastions for cloud computing adoption is enterprise-level CRM, primarily because the systems involve so much customer data -- and in the enterprise, the customer data is always slower to move.

Cloud-based CRM systems and other cloud-based applications are becoming common in business. As people in the organization use different cloud technologies, it becomes part of corporate culture.

The advantages of CRM in the cloud

Comparing CRM applications from the 1990s with present-day apps, they are starkly different from a modern implementation.

"Consider the enterprise timeline, the cost to deploy, the time and effort needed to support the environment and uploading upgrades and patches," Mishra said. "Cloud computing provides … significant cost and effort reduction … [in] making technology available in the enterprise."

For ShuttleCloud, a technology company that specializes in data migration, analysis and storage products, CRM has become an important tool for managing customers and organizing sales leads, and for the company's own internal hiring process.

"Our company needed something lightweight, and integration with the tools and services we already use was extremely important," said Bill Dagiantis, director of client services at ShuttleCloud. "It made sense for us to go with a cloud CRM application for the company."

In the cloud, applications tend to be lighter and more intuitive, so it allows users to get up to speed quickly, Dagiantis said. Connectivity with remote offices has become important to the company since its move to the cloud. "We have people in global offices that can now connect via a browser and have instant access. We don't have to deal with issues around on-premises routing," he said.

While time and cost are the obvious benefits, another is that cloud-based CRM systems enable companies to react to business demands dynamically. "In the old on-premises world, adding capacity was a big project," Mishra said. "You'd have to add hardware, operating systems, and provision licenses. In the cloud world, scaling up and scaling down is fairly easy, so it's a benefit from both an operational and business perspective."

For most organizations, concerns about security are perceived as the major drawback to the adoption of cloud-based CRM systems, but most vendors in the marketplace today do a very good job of managing security concerns.

"Most vendors look at the problem in terms of the layered stack: There's the physical security of the data center, network connectivity and making sure it's secure, and the data is kept in a [Payment Card Industry Data Security Standard]- or HIPAA-compliant repository," Mishra explained.

CRM trends made possible by cloud computing

A side effect of the growing popularity of cloud computing is that raw storage costs are decreasing and technologies, such as Hadoop, that are built for high-volume data processing have become available. These technologies are built to be cloud-friendly, so there are many advantages to using cloud-based CRM systems.

"The big data phenomenon and the idea that you can take data from multiple disparate systems, inject it into the cloud, and bring it back to the business or technical user in a cloud application for analysis changes things," Mishra said. "Big data and leveraging it all in the enterprise allows you to gain insights to run the business more efficiently and more effectively."

For more on cloud-based CRM

Line between cloud CRM and on-premises apps starting to blur

Five tips for Software-as-a-Service CRM selection

Traditionally, there's been a data problem in the enterprise: All the data you use to determine the best business outcome is there, but it's siloed. Now, with cloud computing, it's possible to pull data from CRM and other systems and stitch it together in a big data repository.

"Technology that leverages big data in the contact center gives us the data on an interaction as it's traversed through the IVR [interactive voice response] system, the ACD [Automatic Call Distributor] system and the CRM system," Mishra said. "On top of that, you add in descriptive analytics to visualize the data and predictive analytics to get recommendations as to how to make that best business outcome a repeatable phenomenon."

Another trend in cloud computing is Session Initiation Protocol (SIP), which is used for voice and video calls over Internet Protocol (IP) networks. The advantage of SIP is that it takes voice, which Mishra believes to be the channel of choice for about 70% of customers, and makes it an application.

"Voice has always been its own specialized case, and it's siloed because it requires specialized hardware and connectivity. With SIP, you do everything over IP, so you don't need specialized hardware. All the telephony equipment you need is software," he said.

With SIP, you have a previously hardware aspect of telecom that has been made accessible through software. It's built for the cloud and can deliver voice in the cloud, side by side with every other application the enterprise is using. "It's a significant trend that will reshape the voice side of the contact center and customer relationship management in the next 10 years," Mishra said.

This was first published in December 2013

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