Open-Source CRM Delivers More Control, Less Cost

Open source enterprise applications are beginning to show up on IT's radar screen.

A good CRM package does you no good if employees aren't willing to use it. Case in point: IMA Financial Group, a medium-sized financial services company based in the US. IMA had installed a commercial customer relationship management system that "was flexible and configurable and attractive on the front end," says business processes manager Jennifer Hallam.

But the seeming advantage of a vastly configurable system was irritating her internal customers-and so only 10 to 15 per cent of them were using it.

"The old system simply had too many bells and whistles," she says. Even bringing in a developer to simplify the interface didn't do the trick, she adds.

After a good deal of internal discussion, the 500-employee company moved users off the old system late last year (IMA has asked not to disclose the vendor's name) and installed ConcourseSuite 5.0, an open source CRM solution from Concursive (formerly Centric CRM).

An open source application in an US$80 million company? "It was a hurdle to get the management team to accept open source; they didn't understand the business model," says Hallam. But accept it they did, and the package has been adopted by 90 per cent of the company's users.

The Right Fit for You?

The success of open source operating systems and middleware is an old story: Linux and tools such as Apache have long since moved from the fringes to mainstream adoption. But now, open source enterprise applications, including CRM, are beginning to show up on IT's radar screen, says Gartner analyst Laurie Wurster. According to a recent open source survey by CIO, 45 per cent of the 328 IT leaders queried use desktop applications such as OpenOffice.org and 29 per cent use open-source enterprise applications. The most popular of those enterprise applications are collaboration tools, CRM tools and ERP applications, according to the survey.

To be sure, this is a nascent trend. Open source CRM barely registers when industry watchers like Gartner compile market share charts. "We have to look at open source CRM the way we looked at Linux five years ago," says Wurster.

And like the early adopters of Linux, the pioneers of open source enterprise applications aren't yet a representative cross section of business. They tend to be companies that are medium-sized, often engaged in business-to-business commerce, and equipped with good in-house development skills.

Enterprise adoption is not unknown; H&R Block, for example, is a SugarCRM customer. But that's something of an exception to the rule, in part because most big businesses already have a sizable commitment to an existing commercial CRM package. Also, transaction-heavy, consumer-oriented businesses and other large enterprises may need more features than those offered by the open source competition.

If your company does fit the profile, there's quite a bit to be gained. Open source CRM packages (including support and charges for premium editions) cost approximately 20 per cent as much as corresponding commercial solutions, says Wurster.

Since most of the code is open, the applications tend to be very customizable, run on any platform, and have a good, if not all-encompassing, feature set. Indeed, SugarCRM, the largest player in the category (Concursive is No. 2), has added more mobile features than many of its commercial rivals.

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