Since hosted sales force automation (SFA) applications first hit the scene, they have promised easier implementations without the IT headaches associated with licensed CRM software.
But that doesn't mean hosting is easy.
Hosted SFA requires companies to plan, foster adoption and offer ongoing user support, according to "Best Practices for Implementing Hosted Sales," a report from Cambridge, Mass.-based Forrester Research.
"If you're not careful, all hosted SFA means is you can fail much faster," said Erin Kinikin, co-author of the report. "Because you can just turn the software on, it's sometimes easy for companies to forget the planning and training stage."
Best practices for hosted SFA are similar to those for on-premise applications, Kinikin said.
Organizations should plan the terminology, workflow and screen layouts in advance. One hosted SFA user that Forrester interviewed ran into problems with its rollout because it didn't give any forethought to its naming conventions.
Hosted SFA providers have long preached how easy their products are to use, but sales force adoption remains a concern -- just as it does with licensed applications, Kinikin said.
"We still saw situations where companies tried to put too much [functionality] up front and sales people got confused and stopped using the [hosted] product," she said.
Like on-premise deployments, hosted rollouts should be slow and incorporate user feedback, particularly during the requirements-gathering stage and during early testing. One user in the Forrester report warned against a "grand-scale 'I shall give thee fire'" approach, and said businesses must encourage user feedback and then act on it.
However, hosted applications tend to put business users in more control, Kinikin said. For instance, hosted SFA enables users to generate reports with minimal IT involvement.
As with all CRM initiatives, executive sponsorship is a must, and some hosted SFA users are tying commissions into system entries.
Other problems encountered were more basic and could have been avoided with planning, said Liz Herbert, research associate at Forrester and co-author of the report. For example, one company was still running a 56K Internet connection and end users didn't want to wait to access Web-based hosted apps on a slow connection.
The integration obstacle
Boston-based Eastern Bank contracted with hometown provider Salesnet Inc. two years ago to deliver hosted SFA to its small business unit. Eastern Bank followed many of the best practices outlined in the Forrester report. It started small (13 seats), provided training with executive backing and did the necessary planning.
Yet, like some companies, it ran into integration issues.
"One of the drawbacks, at least for us, is [Salesnet] is not integrated into our core system," said Joe Riley, senior vice president and corporate sales manager. "I understand it could be, but it's not yet. We haven't reached critical mass."
The good news, according to Kinikin, is that hosted applications tend to have lighter integration requirements. However, going into an implementation, businesses should ask integration questions up front.
It is, therefore, vital to get IT involved at the start, even though the decision to go with a hosted application is often made for expediency and to free up the IT department, Kinikin said.
In the organizations that Forrester spoke with, business executives made the decision to go hosted. Despite the potential pitfalls, they're largely happy with their decision.
"These were people who were in control of their destiny, who generally were happy with the implementation because they drove it," Kinikin said. "Immediate gratification is an awfully powerful emotion."