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Will open source CRM software mean cost savings?

Read Jim Berkowitz's advice for SMBs debating open source CRM software in this expert tip.

What kind of savings can a small business expect from moving to an open source CRM model? Our licensing fees are really adding up and we are trying to get an idea of how much we can save.
First and foremost, "high" software license fees are not a reason to move to an open source CRM model.

Before considering open source software for CRM, accounting, etc. you need to ensure that your IT organization has the specialized technical skills that will be needed to support this software and its underlying technical infrastructure. I generally don't recommend open source solutions unless you have the open source infrastructure (ex. Linux Servers, PHP, LAMP, MySQL, etc. platforms), and the IT staff needed to support these resources.

Actually, there seems to be more empirical evidence to suggest that moving to an on-demand, Software as a Service (SaaS) model may be a the way to go, rather then open source if you are looking to reduce your CRM software investments over time.

More importantly, regarding your mounting CRM software licensing fees, these fees should be in investment that's providing your organization with a nice return. If it is, then just keep on investing. If you're not sure if it is, then you should seek help in determining the business and financial benefits of your current licensing fees. Above all, do not spend any more money on CRM software unless you first determine the financial benefits that you can expect to achieve from your investment. Completing this critical project planning step should eliminate, or at least reduce, the anxiety you feel about the software licensing fees that you're incurring.

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