A Shared Vision Business Plan

Consumer relationship management has altered how firms sell, communicate, and handle customer complaints and inquiries. CRM can be defined as the process through which businesses manage their customers’ expectations and collect data to assist them adapt to changing customer demands and preferences. This report discusses the differences that exist between open source CRM and proprietary CRM. In open source CRM, the code is available for public use and modification while in proprietary CRM, the code is under the vendor’s ownership. This paper starts with a brief introduction, which sets the tone for the report and identifies the research gap. After that, the paper presents an overview of the concept of CRM by providing several definitions of CRM from various scholars such as Buttle and Woodcock. Besides, the section on CRM concepts presents CRM examples and then concludes with a focus on the benefits of CRM to businesses. Such benefits include increased competitiveness and reduced costs of operations.

Furthermore, this report compares the open source and proprietary CRM based on the level of consumer control of CRM features, customization, how updates are performed and third-party integration. To start with, open source CRM gives the consumer full control over the features of software while proprietary CRM significantly reduces the consumer’s control over CRM features. Secondly, the report reveals that proprietary CRM offers greater customization capability as opposed to open source CRM. Thirdly, the report points to the fact that updating open source CRM is easy while updating proprietary CRM is complicated and expensive. Finally, the report reveals that it is easier to integrate open source CRM with third-party platforms as compared to proprietary CRM. The final section of this report is the conclusion section which briefly summarizes the report.

Introduction

On the one hand, an open source CRM uses open source programs where the source code is available for public use or modification to original designs. On the other hand, proprietary CRM is one where the code source code is retained by the developer, and it is not open to public use or definition. These two types vary in the level of consumer control of CRM features, customization, how updates are performed and third-party integration. Hence, there is need to investigate how these two different systems differ in the stated aspects. As well, it is vital to focus on the concept of CRM and the benefits that a business can reap from CRM.

CRM Concepts

Customer relationship management has been defined in various ways. It is a firm’s strategy designed to reduce the cost of operations through meeting customers’ needs and responding to changes in consumers’ tastes and preferences. Customer relationship management has three essential aspects to make it effective, and these include people, process, and technology. According to Buttle, CRM is the core business strategy since it combines the business processes and external networks to deliver value to customers (Partanen, Jajaee & Cavén, 2017). Another definition of CRM is by Woodcock in which he defines CRM as a business attitude where companies use Information Technology to identify, combine and focus various capabilities to deliver exceptional customer value (Mukerjee, 2013). In another definition, Rigby, Reichheld &Shchefter described CRM as the as a way in which businesses affiliate their processes with customers strategy to build loyalty and generate sustainable profits (Partanen, 2017). For instance, StemCell Technologies. Inc increased its sales after investing in CRM as illustrated in figure 1. Examples of CRM systems are such as customer service and marketing systems used by companies. For instance, Wells Fargo has taken advantage of CRM social media connectivity hence helping those who come to them to connect with someone who can assist them (Mukerjee, 2013).

Figure 1: StemCell $20,000 investment in CRM Yields 500 percent.

Data retrieved from: https://s3.amazonaws.com/academia.edu.documents/33004384/How5_cmpies_incrsd_sales_uk.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1508290047&Signature=HFK7G02YBM03Frdou4Kz92y%2BMuA%3D&response-content-disposition=attachment%3B%20filename%3DHow_5_Companies_Increased_Sales_and_Impr.pdf

CRM has opened a new world of opportunities for businesses which they can use to gain and maintain a competitive edge in the market. For instance, the data generated from a CRM system can be transformed into market intelligence through data or text mining and therefore help the business to optimize its operations hence lower the cost of production (Mukerjee, 2013). As well, CRM helps firms to build trust and thriving business relationships with the customers since through the use of CRM; a company can maintain seamless communication with the customer, hence, address consumer complaints or queries as they arise.

Compare Open Source CRM and Proprietary CRM Systems

Before delving into the differences between open source and proprietary CRM systems, it is imperative to focus on an example of open source CRM and the usage differences of open source CRM in the UAE and other parts of the world. The OROCRM is a perfect example and it gives the users optimum flexibility with the easy to use interface, which gives the end users complete control over the way they manage. This software is currently used by organizations such as Spares, Box and Signature Products Group. The United Arab Emirates have high number of open source CRM providers such as Oracle and Sage, which are major players in the Open source CRM industry in the country. For instance, Expresso Telecom Group relied on the use of Oracle CRM software. Companies in the UAE use open source CRM Mas a way to reduce the cost of operations and build customer loyalty. Similarly, there is a high usage of opensource CRM in Asia which has been supported by the ease of deployment and the democratic way of software development. For instance, SugarCRM open source is widely used in the country. In contrast, though the American countries have developed some of the top opensource CRM systems in the world, they have not embraced them nearly as much as other regions like Asia.

When it comes to the amount of control the end user has over the CRM features, the open source and the proprietary CRM have glaring differences. Where open source CRM gives the end user absolute freedom to define features specific to their domain, the proprietary CRM denies the end user any freedom to make modifications to the system. The open source software is usually supported by a community of developers meaning that they can add more features to the system in a shorter time (Lee, Tang & Sugumaran, 2014). In contrast, the vendor of proprietary CRM has total control of the features, and the end user is unable to make any modification to the CRM software without authorization from the vendor. Customization is the modification of a product or software according to an individual’s preferences (Vallabh, Radder & Venter, 2015). In light of this, open source CRM offers customization to a small extent while proprietary CRM offers end users highly customized software for specific industries. Since the source code for open source CRM is publicly available, a business can tailor it with the assistance of in-house staff (Abramova, Pires & Bernardino, 2016). However, the staff may lack the expertise or the experience to customize the software to meet the needs and processes of their employer. Proprietary CRM on its side is highly customized since the vendor conducts a feasibility study of the needs and processes of the organization, hence, deliver software that meets the needs, processes of the organizations. While procuring a CRM from a vendor, a business may also ask the vendor to factor in scalability of the CRM software to enable the firm to meet changing needs.

Software’s require periodic updates to fix bugs in the current version and improve the user experience. In the case of an open source CRM, the work of developing updates is left to the community of developers. Therefore, a business which uses open source CRM relies heavily on the community of developers since they respond appropriately when a bug has been identified in the code (Lee et al., 2014). However, it is advisable for consumers to use back tested updates before adopting them into their system. The users of proprietary CRM, on the other hand, are forced to rely on their vendor since there is no alternative as a result of the vendor lock between the vendor and the consumer. Another variation between open source and proprietary CRM is in third-party integration. Open Source CRM offers integration with cloud-based tools like Microsoft outlook and has no issue working on different platforms (Abramova et al., 2016). In contrast, proprietary CRM rarely supports third-party integration since it is linked to the hardware and therefore changing the environment necessitates software customization which is both costly and procedural. As well, the cost of maintaining a proprietary CRM system is high as illustrated in figure 2 compared to open source CRM which is usually free.

Option

Cost per month

Sugar Ultimate

$150

Sugar Enterprise

$65

Sugar Professional

$40

Figure 2: Monthly cost of Sugar CRM proprietary software

Data Retrieved from: https://financesonline.com/much-crm-software-cost-overview-typical-pricing-plans/

Conclusion

To sum up, the discussion above focusses on the concept of CRM by providing several definitions to customer relationship management and the benefits that businesses can reap from adopting CRM. Such benefits include operational efficiency and thriving business relationships with customers. As well, the discussion has presented the differences that exist between an open source and proprietary CRM. These differences occur in aspects such as consumer control of CRM features, customization, updates performance and third-party integration.

References

Abramova, V., Pires, F., & Bernardino, J. (2016). Open Source vs Proprietary Project Management Tools. In WorldCIST (1) (pp. 331-340).

Lee, Y. C., Tang, N. H., & Sugumaran, V. (2014). Open source CRM software selection using the analytic hierarchy process. Information Systems Management, 31(1), 2-20.

Mukerjee, K. (2013). Strategizing for CRM to leverage its benefits. Business Strategy Series, 14(4), 118-122.

Partanen, J., Jajaee, S. M., & Cavén, O. (2017). Business Intelligence within the Customer Relationship Management Sphere. In Real-time Strategy and Business Intelligence (pp. 123-147). Palgrave Macmillan, Cham.

Vallabh, D., Radder, L., & Venter, D. (2015). Factors preceding CRM readiness in small-and medium-sized tourism enterprises. Acta Commercii, 15(1),