How to Choose the Right Management Software for Enterprises?

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Since I have been engaged in the field of SaaS (Party A, Party B, and consulting), I am often asked about the choice of SaaS office software and CRM customer management software system in my Wechat official accounts, Github, and blogs.

Although there are many suppliers of enterprise service products and articles on how to choose on the Internet, they are either advertisements made by enterprises or some official articles on the selection without substantive reference value.

So I want to spend some time and energy helping enterprises choose the right management software, combined with the domestic and foreign network of professional SaaS service organizations, SaaS software service providers, well-known experts in the industry, success and failure cases, and my own experience.

Let's start with "CRM (Customer Relationship Management)".

• What are the deployments of management software?
• What are the strengths and weaknesses of each?
• Which deployment should the enterprise choose?

There are three deployments of enterprise software on the market: SaaS (Public Cloud) mode, Private Cloud mode, and Hybrid Cloud mode.

I. SaaS Mode

Image Source: BlueTree

It is more suitable for small and micro enterprises with low data security sensitivity or small budgets.

SaaS is a cloud mode. The SaaS software service provider sets up all the network infrastructure, software, server, database, security, and encryption measures required by enterprise informatization in advance and is in charge of the development and implementation of enterprises in the early stage, as well as the later maintenance and other one-stop services. Enterprises with Internet access can use the software through a browser or mobile phone instead of buying hardware and software, building computer rooms, or recruiting IT staff.

1. Advantages of the SaaS Mode

1.1 Convenience

This is one of the biggest advantages of the SaaS mode. Because it is deployed in the Cloud, as long as users have access to the Internet, they can access the system and database, query customer information, update customer status, record the chat, and issue contracts anytime and anywhere, whether at home, on business trips, or on trains, subways or buses, to manage and serve customers more conveniently.

In 2020, the Tokyo Olympic Games was held in Japan. To ease the traffic pressure, the local government put forward a Telecommuting Plan to encourage and support the employees of various enterprises to work from home.

50,000 employees at Fujitsu, 34,000 at NEC, 1,600 at Toyota in Tokyo, and 600,000 from more than 3,000 other companies, including Lenovo and Ricoh, worked remotely during the 2020 Tokyo Olympics.

1.2 Low Input and Cost

I have reservations about this. For most small and medium-sized enterprises, the SaaS Public Cloud mode is the first choice with low investment compared with the other two modes. However, it may not be the first choice for enterprises with a certain scale or a large number of software users. Why?

Enterprise software is different from personal software, which can be replaced without cost if it is not used well. Generally, the cycle of enterprise software replacement is more than 3 years on average. Within three to five years, the expenses incurred by enterprises may be equal to or even exceed the traditional mode, which only needs to bear part of the loss cost of the server, part of the salary of development and operation personnel, and the annual 5%~15% maintenance cost.

What's more, it is paid and customized on demand. Each user is a license authorization (account), which must be paid separately every year. If there are many users, it is necessary to comprehensively consider the input of the overall account cost in the next few years rather than just the first year.

If the needs of the enterprise change frequently, it is necessary to consider each change's implementation/development cost; thus, the total investment is also a large amount plus the annual maintenance cost.

However, I still list it as one of the advantages of the SaaS Public Cloud mode because it is an absolute advantage for most small and micro enterprises and not a problem for large enterprises with sufficient budgets, which can spread the budget of the enterprise every year to reduce the risk of one-time investment.

1.3 Ease of Use

It's a matter of opinion. Generally speaking, the usability of UI and operation of SaaS is better than that of traditional software or independent development. Because SaaS is a cloud product to serve more enterprises, not only one or two. If the UI is intricate and the operation is complicated, there is no reason for business owners to choose them. Therefore, vendors value ease of use more than business owners do.

When choosing CRM software or others, ease of use should be listed as a major consideration, and sales, product, and technical personnel can be invited to participate in the selection.

After all, the software will be used by employees in the future. If they refuse to use it, it will be the biggest obstacle after the software launch. Almost every supplier provides a registration trial so that you can register it!

1.4 Customized on Demand and Fast Launching.

It is also a relatively significant advantage of the SaaS mode. Compared with traditional software, the circle of development/implementation is shorter, the cost is lower, and the success rate is higher. However, not all SaaS products can provide powerful customization functions. To sum up, there are three main categories:

• Products with independent PaaS and IaaS platforms can provide customization functions. Enterprises can quickly build various functions or processes that align with their business flow. Representative suppliers are Salesforce and Mirco Dynamics.
• Products with relatively simple and basic customized functions: Such products can only provide the configuration of basic fields, permissions, standard reports, and a relatively simple business flow. In order to meet more complex functions or requirements of enterprises, it is not only through the customized functions of the platform but also the back-end development. At present, the vast majority of domestic suppliers are of this type.
• Products with a completely standard version: These products can only meet the demands of some small and micro enterprises with relatively simple businesses and low requirements for products, such as just recording some basic information of customers.

1.5 The Iteration Cycle of Products is Faster and More Convenient

SaaS and CRM vendors often iterate on their products and introduce new functions or services from time to time. Business owners can enjoy the benefits of it quickly and for free.

In addition to the above advantages, there are other advantages, such as seamless integration, extensibility, and multi-tenant. I will not introduce them individually because it is relatively technical and not very helpful to enterprises in the selection. The advantages and disadvantages are not very prominent compared with other modes.

2. Disadvantages of the SaaS Mode

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2.1 Weak Data Security

This may be the problem that all business owners consider. Data related to customer information and money are particularly important. Thus data-sensitive enterprises and some particular industries will not choose the SaaS Public Cloud mode.

But from my point of view, unless the companies with extreme sensitivity to data, strong development ability, or a particular industry, I recommend using the Public Cloud mode. In addition to the above advantages of SaaS mode, there are several other reasons:

• Currently, the market cultivation degree and scale of SaaS mode is relatively mature: More and more people agree with SaaS because SaaS is ubiquitous in our daily life and work. However, compared with 7 or 8 years ago, the data security problem overwhelmed enterprises when SaaS vendors sold products. More than 70% of customers lost because of it. Today, companies are embarrassed to greet customers without mentioning SaaS.
• The current SaaS technology and data security strategy are stronger: after so many years of development, SaaS technology is more mature, server performance is stronger, data security strategy is more abundant, and is even more secure than some enterprises' self-built servers and security strategies! (At least there is a certain guarantee by signing a data security agreement with the supplier. And it is common to see that the operation and maintenance personnel of the enterprise steals confidential information.)

II. Private Cloud Mode

Image Source: Javatpoint

It is suitable for medium and large enterprises or enterprises with technical development ability, sufficient budget, or extreme data sensitivity.

Private Cloud is another concept relative to the Public Cloud, which refers to a special mode of cloud computing. Enterprises can deploy private clouds in the firewall of the enterprise data center or a secure hosting place for the use of a single enterprise organization. Therefore, enterprises can have the most effective control over data, security, and service quality. This mode can be provided by a company's own IT department or a SaaS service provider.

Image Source: NetData

To put it simply: the most obvious difference between Private Cloud and Public Cloud is that it will not be directly exposed to the Internet after being deployed in the network firewall of the enterprise. The enterprise can make special treatments if you want to access the external network!

Generally, the Private Cloud is more suitable for large and medium-sized enterprises with sufficient budgets and the ability to develop technology or with extreme sensitivity to data.

The advantages and disadvantages of the Private Cloud are relative to those of the Public Cloud so that it can be viewed reversely. Here I will only talk about the biggest advantages and disadvantages. 

1. Advantages of Private Cloud

1.1 Higher Security

Compared with the Public Cloud, the Private Cloud is more secure because enterprise data is stored on a local or managed server cluster, which is not exposed to the Internet and can only be accessed by the enterprise.

1.2 More stable

A private Cloud is usually installed on corporate servers. When employees need to access the Private Cloud, it can ensure that the access stability is not affected by uncontrollable factors such as the instability of the network and the third-party server. In addition, enterprises can effectively handle problems on time.

2. Disadvantages of Private Cloud

2.1 High Cost at the Early Stage

Private Cloud means enterprises must make a large one-time investment to purchase hardware and software equipment. With the increase in business volume and the expansion of a function, the additional hardware and development budget will be added, and professional operation and maintenance personnel and developers will be hired to maintain and upgrade later.

2.2 Not as Convenient as Public Cloud

The Public Cloud is based on the Cloud and can be accessed anytime and anywhere, while the Private Cloud needs to be accessed within the local area network (LAN). A series of protection and access measures need to be installed to access the external network.

III. Hybrid Cloud Mode

Image Source: Javatpoint

It is suitable for medium and large enterprises and customers who are sensitive to data security and want to use some resources of the Public Cloud.

Hybrid Cloud is the product of the mixture of Public Cloud and Private Cloud, which integrates the convenience and ease-use of Public Cloud and the security and stability of Private Cloud. For the consideration of data security, enterprises hope to store data on the Private Cloud and use part of the functions of the Public Cloud, so Public Cloud and Private Cloud are reasonably matched to achieve the purpose of security and saving money.

The advantages and disadvantages of Hybrid Cloud are between Public Cloud and Private Cloud. For example, the public Cloud cost is low, the private Cloud is high, and the hybrid Cloud is just in the middle (more than one side).

These three modes only apply to CRM, while the deployments of other enterprise management software such as OA, ERP, PSI(Purchase, Sales & Inventory), and human resources are similar.

Finally, I would like to share with you an example from the Internet:

Albert cooks pizza at home by himself. This is a Private Cloud, and the kitchen is a self-built computer room.

Eden eats pizza in the restaurant every day. This is the Public Cloud, and the restaurant is the cloud data center.

Tom is terrific. He has a fixed private room in the Pizza House which is not open to the public. This is the hosted Private Cloud (some manufacturers define it as Proprietary Cloud), and the private room is a managed server in a cloud data center.

One day, a dozen friends come to Albert's home, which is a sudden increase in business. There's no place for so many people in the house, so they must go to the Pizza House. This is the Private Cloud to Public Cloud.

Then Albert's parents decide to eat at home. Albert takes his friends to the Pizza House to eat. This is the Hybrid Cloud.

In other cases, Pizza House is only open to a specific group of people, such as students under 14 years old, equivalent to the Community Cloud.

The following figure briefly illustrates the different scenarios:

Image Source: Tecman