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CRM Contracts, Negotiations, and the Hidden “Gotchas” | CRM Magazine Blog

CRM Contracts, Negotiations, and the Hidden “Gotchas” | CRM Magazine Blog.

I am quite puzzled to read this recent post in the CRM Magazine blog. The post itself is largely based on what Gartner Analyst Jane Disbrow said in the Gartner CRM summit in Arizona.

To quote:  “Offers, promotions, and discounts are appealing, but you might end up with something you don’t really need.

Often people just think ‘We have to buy new software,’ but they don’t think of the additional aspects,” Disbrow said. There are many (hard and soft) hidden costs involved with implementing new projects that must be taken into account:

  • Training costs,

  • Customization of code,

  • Implementation time and manpower,

  • Database management, and

  • Data conversion.

Not only are those important to look out for, but Disbrow said that customers need to be aware of the silent software-as-a-service “Gotchas.” Many people think that SaaS lets you scale up and down with users whenever you’d like, she said. However, that’s truly not always the case. On-demand applications can bring along a tailwind of additional expenses including:

  • Storage fees,

  • Premium main fees,

  • Data protection and rights to data,

  • Set-up fees and customization fees,

  • Sand-boxing fees,

  • Fees for customers and business partners,

  • Document functionality, and

  • The ability to reduce or re-level volumes midterm.”

How different is this scenario from any other purchase?
Upfront cost is not the same as lifetime costs; most people get it; corporate purchasers certainly do. And, a product sold as a service will have to embrace some of the same uncertainties of a service sale; just as a service is more difficult to specify than a product, so it is more complicated to price.
Would it be fair to say though that a CRM product sold as a SAAS would typically be, in spite of the uncertainties identified above, cheaper, friendlier and easier to set up and customize than a similar enterprise class software product?
Nothing is as good as it is marketed to be; but nothing is as bad as it is often dismissed as 😉

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