The short answer is YES. Even a one man business can use a CRM system to good effect.  If you have customers (which every business does), you need a system that gives you a single point of contact for managing the relationship. You need a place where you can maintain your contact list of, both current and potential customers. Some small businesses use basic applications like Microsoft Excel and Outlook to manage their clients for notes and email archiving. While it works in measure for some businesses, its by no means an ideal situation. Excel and Outlook weren't built to replace a CRM system.

Would there be any cost savings and related benefits once I start using a CRM? 

Of course! The time you spend juggling between different applications to get the job done translates into money; after all as a business owner your time is chargeable to your business. With every piece of business detail about a relationship in one centralized place, a web based customer relationship management tool would let you focus on the core areas of your business and close more deals. Download a trial version of a basic CRM and use it for a month to check out its worth.

Will my customers benefit due to my switching over to a CRM?

The real purpose of a CRM system is to help you build better, longer lasting and more profitable business relationships. At the core of a good CRM system lies an easy to use contact management system, that allows businesses to store as much information as they can about their contacts, from notes, to street maps, email history, files you've exchanged with them and more. If your team is diligent in adding notes every time they interact with the customers then over time, your customers will have better experiences dealing with your business. 

Do I need to install the CRM on a server and do I need specialist/technical knowledge?

No. WIth most of what we need to do in business now been done on the internet, it makes sense to go for a web based CRM system such as DimensionCRM where the server set up, maintenance and upgrades do not require your direct involvement. All you would need to do is upload your data and start managing your clients using this, out of the box, customer relationship management or CRM system. 

CRM customer relationship management is not complex and in all probability you would already be using certain CRM components in running the sales of your Company. Do the smart thing - switch to a web based CRM system and experience a new level of productivity.