How to find the right operating model

How to find the right operating model

Taxi or own car? Rent or buy a house? Which you choose is entirely up to your personal needs – as both have their pros and cons. The same goes for setting up CRM projects and the question of the right operating model. A company must find exactly what it needs on its own. There are a few things to consider. Our checklist will help you with this.

Cloud usage is booming like never before: according to a survey by the digital association Bitkom in 2018, three out of four German companies (73%) used cloud computing.

“A company’s digital transformation often starts with cloud solutions. In practice, they drive digitalization,” says Peter Heidkamp, ​​Head of Technology at KPMG.

CRM from the cloud is not the top priority

When it comes to CRM from the cloud, however, the numbers are much lower. In the study conducted by IDG on the topic “Expectations on the CRM solution of tomorrow”, one out of two participants agreed that a cloud service offers advantages such as unlimited availability. However, if given the choice, you’ll be much more likely to opt for an on-premises solution. 45% of companies surveyed tend to do so at least when choosing the operational model; 16% can very “clearly” opt for an internal solution. With a corresponding cloud solution, the values ​​are significantly lower at 25% and 7%, respectively.

The operating model should fit the business – not just the software vendor

Before choosing between a cloud or in-house CRM solution, a detailed inventory is necessary. The following basic questions will help you.

  • What does the existing infrastructure allow? What is easier to implement?
  • What is the cost situation?
  • Which IT solutions are already used in the company and with which model are they operated?
  • How to integrate a new CRM into the existing landscape?
  • How many IT employees does your company employ and what is their expertise?
  • What does your company’s long-term digitization strategy look like?

Answering the six questions can provide initial clues

You don’t have a suitable IT infrastructure, little or no IT staff and you don’t want to hire or train new employees? Then you are well advised with a cloud CRM. The service provider takes care of maintenance and care.

Conversely, if your own IT infrastructure is good, it doesn’t mean that the ideal operating model for you is automatically an in-house solution. Then, the digitization strategy is very important: if it involves long-term investments and a high level of stability, it speaks in favor of an internal solution.

Do you prefer basic flexibility and rapid scalability? Then it makes sense to outsource parts or even all of the IT to the cloud. However, it is equally possible to outsource only the CRM system to the cloud and connect it to existing internal IT solutions. Of course, this assumes that existing systems allow communication with the cloud.

Please note that the complexity may also increase with the different location of your computer systems. So think carefully about the systems you currently use, how easily interfaces can be created, and your experience with your service providers. Above all, these form another interface with your CRM provider, which must be reliable, competent and responsive. This is the only way to guarantee smooth processes and a quick solution to any problems that arise.

Process analysis and adaptability

Despite cloud technology, the complexity of a CRM implementation should not be underestimated. The introduction effort is the same as for an in-house model. The requirements of all stakeholders must be defined in the same way, the processes must also be analyzed and optimized. So you should not be blinded by the quick and easy availability of the cloud solution.

If you use different applications in the cloud, it is crucial that they communicate with each other. Otherwise, there is a risk of creating islands of data. For one connection, coordination with cloud software providers can be more complex than connecting two in-house solutions. If you ultimately opt for a cloud solution, ensuring that data is transmitted securely with VPN is essential.

The subject of data protection is not an exclusion criterion for the cloud

“Security issues should not hinder digitalization in the company. That is why the topic of security should be a central part of all process steps when using the cloud – starting with planning,” says Marko Vogel, Partner Cyber ​​Security at KPMG.

Cloud providers must also comply with data security standards and legal guidelines. As a user, however, you have no direct control. Therefore, make sure that the provider contractually undertakes to you to implement data protection and data security measures within the meaning of the BDSG. The respective data centers must also be monitored with special security mechanisms: A corresponding host must definitely be certified according to ISO 27001.

Rest assured of data hosting in Germany

In the context of criticisms of the Privacy Shield procedure, many providers now offer data hosting in Germany and also guarantee that the data will remain in Germany. Appropriate certifications, secure connections or the “Software hosted in Germany” seal of the Federal Association of IT SMEs provide information and create trust. Regular backups also protect your data against the loss of important information.

Sensitive data cannot be secured even with the internal model

If you go for an in-house operating model, that doesn’t mean a security gain per se. After all, security also depends on the IT system and competent employees. Compliance, comprehensive controls, and on-premises governance are required to ensure complete data security. The same goes for topics like disaster recovery or system failure. Here too, the corresponding know-how must be internal and maintained over the long term. It is therefore wrong to claim from the outset that a cloud is less secure than an in-house solution.

A suitable operating model is also a question of personal requirements and money

Which operating model is right for you depends on other factors:

  • Integration of different systems
    Standard processes are easier to map in the cloud. In principle, industry-specific processes can be mapped both in a cloud and in an in-house solution. However, if several different systems are to be integrated into business processes or connected to the CRM, a flexible in-house solution has the best arguments.
  • factor cost
    In-house and cloud solutions also differ in terms of costs: while in-house models require high initial investments (CAPEX), which pay for themselves over time, cloud solutions incur monthly operating costs (OPEX).
  • location factor
    Do your CRM users work in the head office or are most users in the field? An in-house solution is advantageous if the work is mainly carried out on site and not on the move. The connection is more stable and faster compared to the cloud. If many of your employees are on the road, a cloud enables app access and real-time data processing.
  • Skilled worker factor
    The human resource factor should not be underestimated. If you opt for the internal operating model, you need skilled workers and specialists, who are in high demand in the labor market. According to a survey by Bitkom Research, the number of vacancies in IT increased by 51% between 2018 and 2019, reaching more than 100,000 for the first time. An alleviation of the shortage of computer scientists is not yet foreseeable.

Conclusion: The choice of the operating model must be adapted to the requirements of the company

The decision for a specific operating model depends on many factors and how they are prioritized in the business. Above all, however, it is important that an operating model matches your business exactly in terms of the range of functions and the depth of processes. Compromising on features – in favor of a supposedly cheaper cloud model – is not advised.

It is no less true that the analysis of needs helps in decision-making. In any case, it is important to carry out the analysis exhaustively and to prepare and compare the offers judiciously. “You shouldn’t compare apples with pears” – so: investing a lot of time in the preparation is worth it afterwards!

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