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The use of cloud technology is growing at an unprecedented rate as more and more organisations move business processes off-site and into the cloud, according to according to Mike Richardson, EMEA managing director for Maximizer CRM, who here explains the real truths about the myths of cloud-based CRM. This article is copyright 2014 The Best Customer Guide.

More than 50% of workloads will be processed in the cloud this year according to Cisco Systems' Global Cloud Index, and this is a figure that is set to rise. In fact, by 2017, 63% of workloads will have shifted to the cloud, according to Index projections, with global cloud traffic accounting for 69% of total data traffic, compared to 46% in 2012. At the forefront of this boom is Cloud Customer Relationship Management (CRM): research from Gartner has shown that 40% of CRM systems sold in 2013 were cloud-based.

As the number of businesses operating in the cloud soars, the advantages and disadvantages of doing so are gaining much coverage in the media, placing increasing pressure on non-users to sign up or risk being left behind. Yet with so much conflicting information out there, accurately determining whether moving business information and software into the cloud or keeping them on-site can be a daunting prospect.

It is certainly a decision that demands full possession of the facts, and there are a number of myths surrounding cloud storage and software that need to be expounded before you can make an informed choice on whether the benefits of cloud CRM, outweigh any potential downsides.

Big myths busted
The big myths surrounding cloud-based CRM sound convincing at first, but Richardson provides some compelling rebuttals:

  1. The cloud compromises data security
    There are four big myths surrounding cloud technology, and the first is a big one is the belief that moving to the cloud will compromise your data security. While any exposure to the internet carries a degree of risk, moving to the cloud can actually boost data protection. How? By making data less vulnerable to attacks by providing access to more sophisticated firewalls, security protocols and data encryption than most SMEs can afford on their own. This also means that cloud computing offers a huge security boost for any company that offers remote access to employees but does not have protected web access to its systems.
  2. Moving to the cloud results in disruptions and poor service quality
    Many also believe that operating in the cloud will expose businesses to service outages and interruptions, slowing down performance and resulting in poor customer service. In fact, a 2013 Maximizer survey revealed outages and interruptions to be a major concern for 71% of UK SMEs. In reality, economies of scale mean it is far more likely that a cloud service provider will have better back-ups and technical support than those of an individual company with a single data facility. While an incident such as a fire or flood can prove disastrous for a company that stores everything on-premise, any good cloud vendor should have automated back-ups in place via a fully configured disaster recovery shadow facility, ensuring nothing is lost should the worst happen.

    A good cloud service provider should also have a highly configured remote service centre, with the power and speed to support the huge volume of data it handles. This level of computing power, maintenance capabilities, around-the-clock support and general back-up are often far beyond the capabilities and resources of most organisations not specialising in data, particularly SMEs.

  3. SMEs can't afford the cloud
    This is a very persistent myth, with many SMEs feeling that the cloud is not suitable for businesses of their size because they cannot take the kinds of risks that bigger organisations can afford. Again, in actual fact, operating in the cloud cuts risks for the majority of SMEs that use it: security is better and the costs of staff, infrastructure and software are all reduced. What is essential however, is a rigorous selection process: all due diligence must be done to ensure that you choose an established, trustworthy third party provider with secure, well backed up and properly supported hosting facilities.

    Many SMEs have already ventured into cloud-based storage without even realising it - a survey of 500 SMEs by Spiceworks revealed that this was the case for 50% of those questioned. Dropbox, GoogleDocs, and Hotmail, are all examples of using the cloud to store or access information, while anyone using online applications such as Office 365 and Google Apps are also operating in the cloud. So it's not quite as large a leap as you might think.

  4. The cloud will change the way we do business, for the worse
    The fourth big myth is that using cloud technology will negatively affect the way users do business. In fact, because everything is held remotely and is accessible from multiple points and multiple devices, the cloud helps rather than hinders business productivity. Cloud CRM can make it easier for businesses to search their customer databases, update records, enable workplace collaboration, permit off-site working and tap into business intelligence, changing business processes for the better, all whilst boosting computing power, tightening information security and improving the cost-effectiveness of a company's CRM investment.

Benefits of the cloud
Clearly, there are some good advantages to cloud-based CRM solutions, including the associated cost savings. Implementing a cloud-based CRM does also negate the need for big upfront costs for infrastructure, and the security applications that an on-site solution requires.

The cloud can also significantly cut or even eliminate the operational costs associated with an on-site solution, reducing the need for IT staff, security, power, cooling, physical maintenance and hardware refreshes, because all of this is handled by the cloud service provider. Overall, the result is lower capital expenditure for the business and a more rapid return on investment in CRM. In fact, the International Data Corporation estimates that almost every SME that uses cloud services lowers their costs by 10-20%.

Software and storage upgrades also become cheaper. With a cloud-based solution, software is automatically upgraded on the host server, enabling users to keep up with technology advances, adding new features without the worry of significant investment. Additional storage space can also be bought within minutes when it is needed, doing away with the need for big hardware purchases.

Finally, cloud-based CRM is scalable. This was identified as the second biggest benefit of cloud-based CRM in our 2013 survey, with almost half of respondents citing it as an advantage. This scalability in terms of user numbers is a crucial factor for SMEs, allowing smaller firms to respond to growth or entrenchment in their business at minimal cost.

The cloudy business case
There is a clear business case to be made for adopting a cloud-based CRM and data hosting solution, with SMEs that choose to go down this route gaining an important competitive edge in a challenging business environment. No major business decision should be made lightly, however, and before deciding, it is essential to look beyond the commonly held misconceptions that abound around cloud-based technology.

When considering a cloud-based CRM versus an on-site solution, it is essential to separate fact from fiction, and to determine whether the business benefits outweigh the potential downsides. For those looking for reduced upfront costs, for faster, flexible, scalable ways of storing customer data and conducting CRM activities, however, the chances are that the cloud will help.