The Forgotten Cost: CRM Software Total Cost of Ownership
Posted by Sid Lejfer on Thu, Jan 21, 2010
One of the exercises that our prospects go through when selecting a CRM software for their business is a Total Cost of Ownership Calculation. This is a very important step in comparing an on-premise CRM solution to a Software as a Service (SaaS) solution.
In the case of calculating the cost of an on-premise solution, the obvious costs include the following:
- Allocation of the hardware cost, both for the server and end-user computers;
- Allocation of the software cost, again, both for the server and end-user computers;
- Allocation of the NOC expenses, including rent, personnel, and other related infrastruce including firewalls, security software, disaster recovery, and UPS;
- The cost of the personnel to maintain the system both from an administrative and support;
- Upgrades. Is is the most overlooked and underestimated cost of maintaining an on-premise system. There are the obvious 20% annual maintenance fee that software companies charge. But you must include the cost of the consultants and internal personnel you need to perform the upgrade. Overtime, upgrades include the upgrading of the actual software product, underlying database, operating system, and various batches required throughout the infrastructure. You need to consider down time and loss of prodcution in your calculation.
- The Aggrevation Factor. Ah, yes, the aggrevation factor. What does it cost your organization in personal and financial manpower to go through an upgrade process. Those valuable resources can be used elsewhere within your organization.
One of the advantages that SaaS provides an organization is the seamless upgrades provided as part of your subscription cost. You really need to consider this as one of your decision criteria.
Some have actually switched from an on-premise CRM software to a SaaS solution, cost justifying the switch by eliminating the annual maintenance and upgrade expenses.
Please go to our website at http://www.harvestsolutions.net/ and download our total cost of ownership calculator. Although it is difficult to quantify an aggrevation factor, you must include some soft cost in the upgrade process.
Harvest Solutions
We understand the importance of quality customer relationship management. We can perform a needs assessment for your business, followed by planning, customization, implementation and data integration services of your next CRM system. Our continued training and support ensures your business successfully implements the plan we create together. Request a consultation from Harvest Solutions today. Then, stay up-to-date by finding us on Facebook, Twitter and LinkedIn. Learn more industry insights by subscribing to our YouTube channel and following our blog. Also, please give us a call now to schedule your free consultation! (877) 683-3313