Can open source CRM fulfill its promise?

The limitations of closed sourced software and the vendor lock-in policy of proprietary software companies remind us of the fact: fools rush in where angels fear to tread. Software professionals and far sighted business gurus are gradually finding proprietary software as risky solutions. Today’s organizations deal with tremendous complexity and fight frequent changes and updates. A software that is useful today, can a few months later be a headache for the organization.  As a result, software professionals and business organizations are increasingly opting for open source software that allows them to modify the code and add desired functionality.

In terms of Customer Resource Management (CRM), the above scenario is more apparent. CRM can be used to collect, store and manipulate customer information. It gives ways to communicate with the customer more effectively.  In order to increase customer satisfaction and retention, a business needs to record all its clients’ information and different instances of interaction with the clients. From follow-up to lead generation and from product marketing to closing the sales; in every step, an organization has to deal with a huge amount of different types of data. CRM tames this data and facilitates analysis of this data that reveals significant insights about market trends and customer behavior.

Open source is very pronounced and mostly sought out in the CRM sector. Open source CRM software is capable of doing the entire aforementioned workflow. In addition, having its source code open means it is more flexible, more customizable, and gives more opportunity to update the code according to the necessity, particularly in a business environment where changes are frequent and unpredictable.

Currently, there are several options for CRM implementation, proprietary vendor’s solution (e.g. Microsoft Dynamics CRM), on-demand server side or cloud based CRM, Open Source CRM, and open source hosted CRM.  Enterprise software vendors are harnessing ways to reach customers and are utilizing the strength of open source as a clever marketing ploy which benefits both users and vendors. SugarCRM is an example of a such commercial open source model. Their community edition is free of charge whereas the commercial edition comes with advanced functionality and support. This allows a potential customer to evaluate and even use the basic version of the software, as long as they need, for free. When the initial learning phases pass and the customer opts for more advanced features, the commercial edition starts to serve its role. This facilitates the vendors with reduced marketing cost and brings customers through the sales funnel more efficiently.

CRM software has been around in giant corporations for some time where they invested in their IT department to build software that can automate the business and meet their demand. The major barriers of CRM adoption in small and medium size organizations are lack of skills and lack of budget. Open source CRM truly helps businesses to overcome these barriers. Nowadays with the blessing of open source CRM software, businesses of all types can exploit the opportunity to utilize this powerful tool. Here are some important aspects of CRM software.

Quality

It is found that commercial software vendors spend more than half of their revenue in marketing; a fraction is used for actual product development. On the contrary, developed by the community of dedicated professionals, open source software comes with enhanced quality and features. As open source software is built for general use, they are normally platform independent and can be utilized with minimum hardware requirements and configuration. Additionally, by being community driven, open source software is more frequently updated with frequent fixing of bugs and enhanced security features. Help, support forum and documentation for open source software is also abundant.

Customization and scalability

The strength of open source lies in its community and in the customization. In order to be truly effective and add proper value, open source software needs to be customized according to the business requirements, fitting in the way an organization’s employees and different departments work. Organizations can utilize extensions, plug-ins and suggestions of the community to harness the power of open source CRM. However, open source CRM may not be a good alternative for those who want to avoid this path because of the limited IT skills and resources, and should opt for the off-the-shelf solution. Preconfigured CRM is particularly suitable for such small and medium size business. However, some open source CRM software vendors, like sugar CRM, now offer a pre-configured download that can satisfy the needs for many small and medium enterprises.

Cost efficiency

The organization which is under tremendous budget constraints can benefit from open source software. This trend is particularly apparent in the open source CRM. While during the global financial crisis tranquilized the business organizations around the world, due to its novelty, open source CRM adoption continued to grow and flourished. Open source CRM can add value during the initial phase of a business, particularly for small and medium enterprises, where budget is a big concern. Now-a-days almost all open source CRM, including sugarCRM, gives out of the box basic customization capabilities, which many businesses can benefit from tremendously.

Security

Big organizations utilize open source not only for their scalability, but security is one of the great concerns as well. Where proprietary cloned software is vulnerable to security attack, the bad guys remain far away from reaching the tailored code of open source software that has been customized according to the organization’s need. Security experts can investigate the loopholes in the code and implement necessary code to enhance the security.

Open source CRM market and its future

Open source software is used by many corporations in business critical projects and is replacing closed sourced/commercial software in many cases. Today Linux is utilized by the majority of large organizations; Apache occupies more than 60% of web servers. Oracle, MySQL etc. are all heavily utilized and highly praised for easy integration with open source software.  This is also true in the case of CRM. Open source CRM occupies a significant part of the market share compared to the other sectors. Although the history of the open source CRM begins at the turn of this century, due to its corporate intrinsic value, open source CRM expands continuously. In merely half a decade open source CRM has become the mainstream in business where millions of users are benefiting from them. Along with SugarCRM, SplendidCRM, vTiger etc., now there are hundreds of open source CRM alternatives. The market leader in open source CRM, SugarCRM, has been downloaded approximately ten million times and currently utilized by more than half a million users worldwide. The software is built on PHP code and compatible with MySQL. It can be plugged-in with a Oracle database using a JDBC database connector.

CRM is a big market, which is predicted to be around $ 7.6 billion by the end of 2012, and a significant part of this market is occupied by SaaS providers. However, there is no doubt that a considerable share will be earned by open source CRM. And, it will take some time to predict the true potentiality of open source CRM, as many small and medium size organizations are yet to deploy CRM in their organization. It is worthwhile to mention that small and medium size enterprises represent more than 98% of companies worldwide.  If open source CRM can promise the much sought out functionality and deploy the correct business policy fulfilling the requirements of the users, there is no doubt that it will be in the forefront in the near future.

As the developers add and extend functionality, CRM is being more co-ordinated with other segments of business (for example, ERP) and the distinction among them is becoming narrower. In the future, CRM tools will be more integrated with the surrounding social media and mobile platforms. In this perspective, the wider scope opened up by the utilization of free open source alternative will clearly attract more businesses.

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