Until recently, the phrase "open source" was seldom uttered in conversations about CRM. In fact, the open source movement has primarily been focused on the data center, providing core functionality such as Web services, domain naming service and file sharing. But now the open source phenomenon has made its way into the world of business applications -- at least half a dozen vendors have introduced open source CRM offerings in the last 18 months -- and as their customers find success with the model, open source CRM is slowly gaining respect.
For companies that can't afford proprietary CRM software, which often comes with a hefty price tag, the economics of open source are particularly appealing. In most cases, the product is available at no cost and the only investment required is for services and support, offering significant savings on license fees. This is true even when comparing open source to the hosted CRM model, since the monthly fees associated with hosting can quickly add up. Because open source means the software's source code is freely available for others to access, adapt and enhance, there is the significant opportunity to leverage the skills and knowledge of hundreds of developers from all parts of the world.
But there is still a lot of skepticism about the viability of open source CRM, and experts warn that it isn't right for everyone. Open source critics claim lack of vendor support and less focus on rich analytical capabilities are at least two major drawbacks for open source CRM.
"Open source is a great alternative to jump-start a custom-built application, but it still is not as functionally rich as a packaged application," said Sheryl Kingstone, CRM program manager at Boston-based Yankee Group. "When evaluating the total cost of ownership, be sure that you are fully comparing 'apples to apples,' including future upgradeability and time to stay on top of competitive differentiating technology."
Others, like Bernard Golden, CEO of San Carlos, Calif.-based technology consulting firm Navica Inc. and author of the book Succeeding with Open Source, believe that open source CRM offers tremendous potential -- if you understand from the start what you are getting with an open source product.
Golden offers the following five tips for those who are evaluating it.
Assess your organization's level of affinity to open source
Some companies have experience with open source products in other aspects of the business and are already comfortable with it. For them, the move to open source CRM would be a logical progression. For companies that are unfamiliar with the nature of open source, there are certain cultural differences to consider. For example, companies that prefer a lot of hand-holding from their software vendor might get frustrated with an open source model, where "chalk talks" with the chief technology officer to discuss the next evolution of their architecture are less common.
On the other hand, one of the perks of open source is the degree to which a company has an opportunity to influence the vendor's product. If this is appealing or necessary, open source will likely have more allure.
"A company with, say, 25 users has less chance of influencing a NetSuite or a Salesforce.com; they'd probably never be able to influence the product direction or contribute to it," Golden said. "With open source, companies can build new functionality on their own and then submit it to the vendor to have it incorporated in future releases. The way larger vendors often work is that the customers they are most responsive to are the ones they might sign next quarter, which can be frustrating."
Gauge functionality, integration needs
With open source CRM, companies can write their own modules to handle unique business requirements. That is not always easy to do with licensed products. In fact, this is where access to a broad user community becomes a major advantage; they can quickly provide tips on how to manipulate the software to address specific business needs. In contrast, a traditional CRM provider would offer technical support after the software is purchased.
Companies should also ask: What do we need integrated? Typically, smaller companies will be moving from something like ACT or Microsoft Excel, where there really are no integration options. But, as they start to evaluate new products, they develop a wish list of how they would like their systems to talk to each other and share data. So it's important to consider what integration mechanisms exist not only for the product being considered, but also for the systems that are already in place.
Consider partnership and support needs
Golden advises companies to first consider how much and what kind of help is needed (i.e., determine if you need a strategic partner or a technical partner). When sizing up available partners for products associated with a vendor, it's a good idea to look at the project's online forums and see who is posting; this might uncover some people who do independent work. A simple Google search can also help locate qualified partners. Still, it's important to keep in mind that many open source products don't have a certified partner program, and finding the necessary support requires some investigating.
Make an IT assessment
Making sure your IT staff has the skill set to manage the technology used in the product is key. For example, if the product's integration mechanism is based on the Simple Object Access Protocol (SOAP), what level of expertise does the IT staff have with it? It's really important to ask: To what extent is the staff interested and motivated to work with open source? Open source presupposes a certain level of interest in working with and enhancing the product.
Observe and evaluate the user community
Open source movements are only as strong as the communities that participate in them. It's a good idea to look at the community, observe how many people are signed up, how active they are, how useful the posts are, how welcoming the community is. Is it dominated by a couple of people? If so, you aren't getting a good sampling -- you're getting one person's opinion. That's not a good sign.
Also try to get a sense of how active the developers from the vendor are in that community. That might indicate the level of commitment the vendor has to its product, which will also reflect the long-term viability of the vendor and its offering.