Michael Maoz

Visiting clients this week, it became clear very quickly that the heads of IT and large IT projects in the area of customer care and contact center have serious doubts as to the cost effectiveness of on-demand (or software as a service / SaaS) and the ability to keep SaaS applications in synch with complex backend environments.

Simplicity and cost effectiveness have been the chief selling factors for SaaS in CRM. They can make for a decent argument when talking to a stand-alone group or function such as mobile sales people. However, large or complex call centers for technical support or order taking or partner management have dozens of real-time integration points. Systems such as outage management, fraud management, credit systems, claims, configuration, order management, as well as telephony infrastructure in the form of aging voice response systems need to be accessed, and often these systems are outsourced and sitting in partners’ data centers. The SaaS providers have largely failed to offer complete answers to questions on how to integrate, which middleware to use, and how to continually synchronize with evolving legacy systems

The second issue clients repeatedly raised was about price. It is confusing. The idea most prevalent in the minds of the IT leaders is that a SaaS application at US$75 or $150 per user per month, plus fees for data storage and customizations and offline availability of real-time data cannot compete with a software bundle that crosses ERP, supply chain, billing, and front-end customer applications, offered from a suite vendor such as Microsoft, SAP, or Oracle.

These are clear challenges that the SaaS CRM application vendors will need to address to win the business in large and complex call/contact centers, and so far the vendors have failed to convince these buyers.