CRM on a Tight Budget – Is Open Source the way to go?

Customers entering the relatively mature CRM market are increasingly looking for value for money from a wide range of open source or proprietary CRM products. Open Source in a CRM context is often perceived by most clients as a cheap or free CRM option with a low cost of ownership.

Open Source software is developed in conjunction with a community of interested developers around the globe sharing a common platform and adding to core code with the aim of continuously enhancing and developing that application with their own code additions being  tested by the other developers within the community.

The mature market means that core functionality can often be found in common usage across several products such as: leads, opportunities, contacts, contracts, cases etc, and this is equally applicable to both proprietary and open source software.  A combination of low perceived cost and core functionality has therefore stimulated increasing interest in open source CRM

Proprietary CRM systems typically require customers to purchase annual or ongoing maintenance arrangements, which open source advocates are sometimes quick to criticise. However, for many this also offers peace of mind and an understanding that the vendors will support and invest in the product longer term i.e. Over several years.   Increasing integration of CRM products with commonly used email clients and office applications already requires CRM upgrades to keep pace with new released applications and changes in web technology.

A recent review of the top 10 Open Source vendors (http://www.crmsearch.com/top-10-open-source-crm-systems.php)  was very illuminating.  From personal experience, only two of these applications-“Sugar CRM” and “vTiger” appear to have been adopted in the UK by customers in any numbers.

Implementation of Open source solutions are rarely cost free.  For example, the two leading brands Sugar CRM and vTiger, are associated with additional module costs, and indeed training and customisation are often provided as a separate cost.  For many IT administrators, much customisation could be carried out themselves.  Likewise  administrators with that level of CRM skill and knowledge should also be able to do that on proprietary CRM products as well.

However,, for most organisations selecting a  new CRM system, the well known proprietary applications such as the likes of ACT!, GoldMine, SAGE CRM and Microsoft Dynamics CRM, Salesforce.com etc do still offer a number of advantages over Open Source such as:-

·         Proven Brand pedigree and customer base together with an investment and product development track record.

·         A wide choice of experienced resellers to support CRM application locally and this can give clients more control and choice of supplier to implement.

·         Ongoing development of the product can be more defined, often with available roadmaps . Future proofing depends on the actual uptake of each product and market share/ customer base and profile.

·         ”Cost Free” perception does not always translate into reality, since many Open Source appear to be ‘free’, often this is for a very basic system or a user limited version (typically less than 5 users).

·         User acceptance and compatibility with MS Office products including MS Outlook can be an issue since the Microsoft ‘look and feel’ is often desired. MS Outlook integration may be a future issue since MS Outlook 2010 seems to be less open to embedded applications ( MS CRM 2011 now uses the same source code as MS Outlook).

·         Integration with other systems either in the feeding into or from these systems may require specialist skills and still involve further cost.

·         Future migration of data, especially relevant for smaller organisations who may wish to move towards a more recognised CRM system after a few years, means that unforeseen data migration costs can be higher since it is unlikely that ‘off the shelf’ applications have any standard upgrade paths  available.

·          ‘Hidden cost’ of the acquisition of internal knowledge as opposed to sometimes more clearly visible external costs.

In conclusion, Open Source solutions can be an attractive proposition that may meet the needs of certain customers, but a closer examination of the leading Open Source brands still shows that there are invariably other associated costs that still need to be taken into account.  Potential CRM customers need to consider their own circumstances, plans and objectives for introducing or upgrading CRM and importantly choose a reputable CRM Adviser/Reseller with relevant experience.  A review of the proprietary applications would always be a recommended first choice, subject to a client’s specific requirements.