Destination CRM has an interesting article this trend. The article highlights the following facts:
Recent research from Gartner analyst Michael Maoz predicts that by the year 2012, 30 percent of investments in CRM will be via software-as-a-service (SaaS).
Gartner research indicates that the increased deployment of SaaS initiatives might have underwhelming implications for consulting and professional services. Maoz explains that many companies view software-as-a-service applications as plug-and-play. The implementations lack process involvement and merely connect applications in the cloud, rather than looking at the bigger picture of business process management. "CRM is not just the technology," Maoz expels. "It's more an issue of ‘How do I interact with my customer?' Using some of these SaaS applications without changing the business process could be just enabling [organizations] to do bad things even worse." In other words, without a bottom-up approach, deploying new applications in the cloud is automating a tired or flawed process. "Using software-as-a-service is not going to help CRM," Maoz states. "We shouldn't be enamored by cloud computing instead of in lieu of process improvement."
My View: I can't agree more with Gartner on this trend. Increasingly, clients will prefer this as a hosted and managed service. In fact, the second part of the article seemed more important to me. It's not only important to have SaaS as a model in customer management but the ability to understand the process and business impact & action is a key need where I see is a huge gap that exists currently in such models.
I believe there must be 4 stages before implementing SaaS in a customer management environment:
Stage 1: Define your CaaS : Customer management as a strategy - How are customers or prospects being defined by current and prospective value, opportunity and segments?
Stage 2: Define your IPPM: Set-up a clear interaction planning and process mapping & migration of your customers and prospects.
Stage 3 : Implement SaaS: Once you have done the above 2 stages, then plan your SaaS roll out.
Stage 4: Plan the analytics,campaigns & metrics: SaaS is just the start but post customer management in SaaS is critical. The analytics around customers, campaigns around potentially valuable segments and tracking key metrics is often overlooked.