Different Delivery Model, Same Risks

Marxer is sticking with the hosted solution, even though RightNow had a clause in its contract that ResortCom could buy a license and take the software onsite if Marxer wasn’t pleased with the results. Although he’s had to hold off on upgrades to date, he’s hoping they won’t pose a problem when RightNow adapts a true Web-services integration platform.

In the meantime, the on-demand system has yielded some solid ROI. The self-service function has reduced customer e-mails by 40 percent, and workflow has improved between back-office and front-office functions, resulting in a 40 percent improvement in productivity. And ResortCom has been able to introduce some automated marketing functionality that Marxer predicts will boost its bottom line this year.

Marxer credits the progress he’s made with his on-demand CRM solution not to the technology itself, but to the two years he spent preparing the organization for the changes that would be required—preparation that would have been the same regardless of which delivery model he chose. "Back then, we didn’t have the money or maturity to do a full-blown implementation. [As a result], I was able to do all the prep work necessary on a cultural level way before we even put out the RFP," Marxer says.

It remains to be seen whether more complex on-demand CRM implementations ultimately succeed or suffer the same fate as many large-scale on-premise CRM projects have. "Because most of these are monthly investments and in the past were smaller deployments, we haven’t heard about the big disasters yet," says Bois. "The larger implementations will be the ones to watch," he says.

"On-demand CRM may be a less-expensive risk, but it’s just as big a risk," says Greenberg from The 56 Group. "If you haven’t planned everything out, customers will get lost. People will get fired. You will fail."