• Legal Escrow & Arbitration Services Ltd.

    Escrow news

The Benefits And Risks Of Putting Customer Data In The Cloud

Posted on by admin


The CRM market has evolved dramatically in recent years. More organizations are embracing cloud-based CRM services as the foundation for an omnichannel customer engagement strategy.

They value the flexibility and scalability offered by cloud infrastructure and the increasingly sophisticated SaaS offerings not just in CRM but also in associated areas such as analytics and Data-as-a-Service.

Analyst firm Gartner predicts that 50 percent of CRM offerings will be delivered over the cloud in 2015 and by 2025, the figure will rise to 85 percent.

There are plenty of reasons to move your CRM system to the cloud. But there are also risks, particularly when it comes to customer information and other sensitive data.

From a legal perspective, businesses need to manage the risks associated with custodial and proprietary data in a proactive way.  They need to actively engage with service providers and ask the right questions, particularly when it comes to data security, jurisdiction issues and business continuity.

Too often, business continuity is understood in its narrowest technical sense relating to SLAs and disaster recovery facilities.

But potential users of a hosted CRM service need to evaluate what might happen if they could no longer access customer and other data in the cloud-based CRM service because the CRM provider had gone out of business.

The consequences of such a failure could be dramatic and irreversible. So you need to conduct the same level of due diligence on a hosted CRM supplier that a manufacturer would when evaluating a key component supplier. But what happens once you have signed up for the service and the business is now dependent on it?

Supplier failures can happen at any time so a SaaS escrow service, such as that offered by LE&AS, relieves businesses of the need to constantly monitor their SaaS suppliers.

If it appears that a supplier might be running into financial troubles, the escrow agent makes sure the business knows about the risk in good time. If such a trigger event occurrs the legal obligations to take appropriate action are contractually negotiated and agreed, to ensure access to its customer information and other data hosted in the CRM service will not be jeopardised.

Share it now!
This entry was posted in Cloud computing. Bookmark the permalink.