Understanding On-Premise CRM vs Online CRM: A Comprehensive Guide for Beginners

When it comes to Customer Relationship Management (CRM), there are two main models to choose from: on-premise CRM and online CRM. Understanding the differences between these two can be crucial for any business, especially for those who are new to the concept. In this article, we will explore what on-premise CRM and online CRM are, and how they differ, to help you make an informed decision.

What is On-Premise CRM?

On-premise CRM, also known as on-premises CRM, is a type of CRM system that is installed on a company’s local servers or computers within the organization. This means that the software is not hosted by a third-party provider but is maintained and managed in-house. This model is also sometimes referred to as ‘on-site CRM’ or ‘local CRM’.

Key Features of On-Premise CRM

Data Storage: All data is stored on your local infrastructure, providing greater control and security. Customization: Greater flexibility in terms of customization and coding due to local control. Bandwidth: No internet dependency for data synchronization, eliminating bandwidth issues. Local Access: Direct access to data and system from within the organization premises.

What is Online CRM?

Online or cloud CRM, on the other hand, is hosted by a third-party provider and accessed through the internet. The software is typically available as a subscription service, allowing users to access it from anywhere as long as they have an Internet connection.

Key Features of Online CRM

Ease of Setup and Maintenance: No need to install software or manage servers; most issues are handled by the provider. Scalability: Easily scalable to meet changing business needs. Access from Anywhere: Can be accessed from anywhere with an internet connection, including mobile devices. Disaster Recovery: Reduced risk of data loss due to cloud-based backups and redundancy.

Common Misconceptions about On-Premise CRM vs Online CRM

It is important to clarify a few common misconceptions about on-premise and online CRM systems.

On-Premise CRM is Not Always About Owning Software

Many people mistakenly think that on-premise CRM means owning the software outright, but this is not always the case. In fact, many on-premise products, including popular suites like Microsoft Office or CRM suites like Act!, are sold via subscription. This means you are paying for the right to use the software, rather than purchasing the product. The term 'on-premise' simply refers to where the data and software are hosted.

The Core Difference

The real core difference lies in where maintenance and security occur. With an on-premise CRMS, the local IT team is responsible for maintenance, security, and any server-related issues. This can be a benefit if you need to connect with remote or mobile users, as it might require additional IT skills. Additionally, some advanced customizations can be more easily achieved with the additional flexibility and control provided by an on-premise solution.

Mixing and Matching: Hybrid CRM Models

It’s important to note that many modern CRM systems offer hybrid models, where the cloud version can synchronize and back up data on your local network. This hybrid approach can offer the best of both worlds, providing better speed and customization options on your network while also ensuring that your data is backed up off-site. This setup can also facilitate remote access without the need for extensive IT setup or security measures.

When to Choose On-Premise CRM

On-premise CRM is often a better choice for larger, more complex organizations. It can offer deeper levels of customization through custom coding, which might not be feasible with a purely cloud-based system like SugarCRM. However, it does require a dedicated IT team to manage and maintain the system.

When to Choose Online CRM

Online or cloud CRM is generally more suitable for smaller businesses and those who value ease of use and access from anywhere. This model is ideal for sales teams who need to access CRM data while they are out on the road. Since the data is accessible from anywhere, it’s particularly useful for mobile and remote workers. Additionally, online CRM providers typically handle maintenance and updates, which can save time and resources.

Conclusion

The choice between on-premise and online CRM ultimately depends on your specific business needs and constraints. While on-premise CRM offers more control and customization options, online CRM provides easy setup, scalability, and remote access capabilities. Understanding these differences can help you make a decision that best suits your company's requirements. Whether you choose on-premise or online CRM, the key is to ensure that your CRM system aligns with your overall business strategy and goals.