CHAPTER 8 CASE STUDY : Customer Relationship Management Heads to the Cloud

1.) What types of companies are most likely to adopt cloud-based CRM software services? Why? What companies might not be well-suited for this type of software?
 

Types of companies which are most likely to adopt cloud-based ERP and CRM software services will be startup companies, companies that want to reduce internal IT costs and companies that want to reduce their capital costs and companies that are struggling with a lot of data.

That is because it enables them to achieve operational excellence and customer intimacy. It releases them from infrastructural maintenance and its respective fixed and operational costs. It provides them with operational ubiquity and allows them to easily subscribe and cancel the subscription without losing large upfront software licenses and hardware investments.

Companies which might not be well-suited for this type of software are those companies from small to middle-sized companies. These companies have senior finance professionals and they concern about security and the lack of information and understanding about cloud technology which are the main reasons for organizations are staying away from cloud ERP. Large firms in fast paced evolving industries are also not suited for ERP and CRM cloud-based software. This is due to the need for flexibility. Firstly, firms require not only deep-seated technology changes but also fundamental changes in the way business operates. Installations of the new software require employees to change their working methods. Employees must learn how to perform a new set of work activities. This requires new organizational learning and provides training for them. Companies that are unable to accept the changes and also provides training for their employees will be not be suggested to use this type of software.

     2.) What are the advantages and disadvantages of using cloud-based enterprise applications?

Advantages:
Removing the hardware and all the complications attached with it for example the cost of maintaining  the hardware, the risk of hardware failure, and the cost of hiring personnel required to handle them
The beauty of cloud computing technology is its simplicity, the fact that it requires significantly fewer capital expenditures to get up and running.
Cloud computing infrastructures offer much greater scalability, complete disaster recovery, and impressive uptime numbers.

Disadvantages:
A constant internet connection is required. Without the internet, you cannot access your data or application
Lack of control over data, system performance, the ability to audit or change processes.
Potential inability to see who is viewing / accessing your corporate data.

3.) What people, organization, and technology issues should be addressed in deciding whether to use a conventional CRM system versus a cloud-based version?

 

People:

Service Level Agreements (SLAs); there is lack of SLAs concerning ERP and CRM cloud based solutions and of methods to ease their respective verification.
Risk Assessment: it is hard to assess the risk when the company does not own the infrastructure that supports the ERP and CRM systems.
Dependability: companies using cloud based CRM and ERP solutions might become dependent of their providers since they do not store the data, and might not be able to easily export it to another system if required.

Organization:

Human Resource Optimization: while traditional ERP and CRM solutions demand for technical staff, cloud based solutions allows to optimize HR to focus on operation.

Technology:
Security; using the web as infrastructure, cloud based ERP and CRM solutions suffer have difficulties in offering security comfort to companies that own sensible data.
Availability; due to the web failure tolerant model, cloud based ERP and CRM solutions suffer from availability issues that might cause business operation failures