The pros and cons of developing CRM in-house

Discover the pros and cons of developing CRM in-house in this expert tip. Learn which type of company would benefit from a CRM system developed in-house.

I am the marketing manager for a small natural skincare company and we are planning to deploy a CRM system for the first time. Would it be more effective for us to have our programmer build a CRM system (using basic Microsoft software as a foundation) or to go with an existing Web host? What are the pros and cons of developing CRM in-house vs. purchasing a commercial package?
The principle advantage of developing a CRM application in-house would be if your business has particularly unique requirements which can't be cost-effectively addressed through commercial CRM software.

However, the major commercial CRM packages tend to be very flexible and many vertical CRM applications have been...

developed for specific industry needs, so the probability is that there are suitable packages out there.

The other reason that people venture into in-house developments is that they have 'spare' development resources which they feel they could use to cost-effectively develop a CRM package. In my opinion, there are a number of reasons this doesn't generally work out:

  • People frequently underestimate how much work goes into creating any sort of application, and it ends up taking a lot more time than previously estimated.

  • The developer gets sidelined on other projects so the new CRM application doesn't see the light of day.

  • Companies don't realize how many opportunities may be lost -- if they dedicate their development resources to one project they may miss out on other activities.

  • The homegrown CRM applications lack the ease of use and breadth of functionality of more seasoned commercial applications, thus impacting user adoption.

  • If the developer decides to leave the company it's difficult for anyone else to fill their shoes and the CRM application becomes obsolete.

  • The management team gets emotionally attached to the system and hang on to it longer than is rational to do so.

    I'd be very wary of the in-house route unless you have very specific needs not easily met through standard packages, and even then you would want to undertake a very measured assessment of what's involved in developing a viable application before continuing. One compromise might be to take an open source CRM application as your foundation.

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