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Building a CRM upgrade business case

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Ask The CRM Expert: Questions & Answers

Assess CRM business benefits and process improvements via activity-based costing

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I am trying to develop a CRM strategy that goes beyond technology to incorporate people and processes. Also, I am concerned about the CRM strategy enterprise-wide, not just in the call center. Of course, ROI is a requirement. What's your advice from a ROI standpoint?
CRM is all about how we make sales more efficient, and most importantly more effective -- so yes, any business case for CRM needs to include people and process improvements to drive business value.

Business benefits should be tallied for how the system will improve current manual processes and tasks, automating and eliminating some, while streamlining others. The best way to assess these process improvements is via activity-based costing. To do this, assess the process steps and tasks as they currently are, costing them out as is. Then do the same after the task is re-engineered or automated with the CRM system. A couple of examples of the calculation would be:

 

  • Annual costs for calls handling = number of calls per month * time per call (hours) * burdened salary rate ($/hr) * 12 months/year

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  • Annual cost per forecast = number of times sales forecasts done per month per sales person * 12 months/year * time per forecast (hours) * burdened salary rate for sales person ($/hr) * number of sales people

  • Doing this and comparing the as is way things are done today compared to the to be method proposed after the CRM system for all tasks to be automated can prove invaluable in demonstrating the value, quantifying the impact and providing the ability to measure improvements post implementation.