CRM - The Business Case

CRM – Investment Appraisal

CRM systems represent for many businesses and organisations a new type of IT expenditure. While it is still all too clear where costs are to be incurred, the case for the investment cannot necessarily be made in terms of improved efficiencies and therefore reduced costs in existing processes in the organisational value-chain. Obviously, this is not always the case – call centres or internal help-desks may offer significant cost savings over the existing regime. Investment in CRM systems may be a far more risky proposition – with commensurate returns – for example, the survival of the organisation as a viable commercial entity!

If we are investing in a CRM system as a basis for competitive advantage and the winning of new business, the case for the system should be set out as would any investment in plant, equipment or other assets which are intended to generate wealth for the organisation. The costs and benefits need to be defined in tangible terms – not just woolly statements like “improving customer service”, so that management can take a informed view of the inputs and outcomes of the proposed project. In this way, IT investment is not just seen as an expense but an asset for the organisation with all that this entails in maintenance, budgeting and planning etc.

For this article, we have compiled a case study model for an investment in a call-centre. The investment combines elements of improved resource utilisation and a speculative component where the new system will play a part in retaining (and capturing) market share by enabling the delivery of accurate and timely customer service to a growing client base.

We examine the benefits that might accrue to an organisation, the associated costs and finally a comparison. In this way we can determine the value of the investment. It is not just an expense to be pared to the minimum.

a) Benefits

Here we compile all the improvements expected from the implementation of the proposed system.

Certain riders and assumptions need to be stated prior to the presentation of the benefit case:-

  • The value of benefits is often arguable, particularly in case of so-called intangible benefits. However, all underlying assumptions are stated and any different interpretations of value can be quickly considered.
  • The values shown are sales prices - additional sales made as a benefit of a certain feature. This is not the net benefit as sales have costs associated. However, it is beyond this analysis to calculate what the marginal costs are on these additional sales, including all production costs.
  • The benefits stated below will not be experienced to the full extent in the first year, but certainly thereafter, provided that the customer support system stays in line with customer expectations. This is clearly an important proviso suggesting that further investment may be required in subsequent years.

The first table is based on the assumption that the new call centre can offer a performance close to the world best practice benchmark:

  • 24hr, 365 days service call availability
  • <15 seconds average time to answer the phone
  • a technician arrives on any metropolitan site typically within 1 to 2 hours
  • >90% of information / query calls are answered on the spot
  • >90% of returned calls to customers occur within 45 minutes (during business hours)
  • All users, from sales and service field staff to senior executives will have access to all information as defined and permitted by authorisation levels via password controlled user access.

Note that in the following benefits table, while there are savings to be made by improvements in resource utilisation, these benefits are a mere 9% of the estimated total. The benefits are almost wholly derived from increased business with existing clients and new business. The assumptions that underpin these estimates therefore require rigorous discussion prior to acceptance.



Additional Revenue & Estimated Savings


(1) With the much improved service response, customers continue to renew service contracts; assume and extra 150 contracts @ AUD45/month


(2) Customer satisfaction with support leads to improved sales, increasing market share through new purchases, upgrades and replacements; 100 customers influenced, 5 machines additionally renewed/installed – AUD15,000 average sales price


(3) New Prospects – expect an increase in market share – 50 new customers, 5 machines each @ AUD15,000 each on average


(4) Expected productivity improvements increase field service personnel productivity by 10%. Estimated staff reduction. 40 field staff with 10% productivity improvement reduces require by 4 @ AUD100,000 per staff member


(5) Improved productivity of client services staff results in 10 effected staff, 10% improvement in productivity @ AUD100,000 costs per staff member


Estimated Total Benefits


In order to isolate the potential benefits of 24hr service coverage the following assumptions have been made, which were included in the numbers on the previous page: -



Additional Revenue & Estimated Savings


(6)Some customersrequire 24hr availability for support services. This service is mandatory for a number of customer sites; 100 machines under service with AUD45/month service revenue


(7)Extended coverageleads to market share improvements 10 new customers per annum, 5 new machines at AUD15,000


Estimated Benefits from 24hr Coverage


In this case study, there has been some attempt to isolate the benefits associated with each feature specified in the performance benchmark for the call centre. Clearly, this exercise can work both ways:-

  1. as a basis of estimating the total potential benefits
  2. to act as a basis for discussion if functionality has to be reduced due to cost or delivery constraints in the future.

The benefits of a global availability of the call centre are assumed to be as follows:



Additional Revenue & Estimated Savings


(8)Existing customerswith global resources...

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Date posted: 2014-12-23 | Comments(0)

People, Change and CRM

So you have decided to adopt a Customer Relationship Management system (CRM). The technology has been evaluated and selected and the infrastructure has been designed. Expectations are raised and the sales and marketing people dream about the opportunities the new technology will create. Project plans are prepared and you are ready for implementation. But what about the people involved? Where do they fit in? Will the culture of your organisation encourage or inhibit the changes required?

If the capabilities of a CRM system are to be realised, the people side of any implementation must be addressed. In this article we explore some of the cultural, people and change factors that need to be considered.

CRM and Change

Typically, the adoption of a CRM system reflects a desire to increase the effectiveness of a business and to focus on customers. A CRM system provides many opportunities to create radically new ways of working and thinking. Inherent in this process is change, whether it be small or large, extensive or local, personal or systemic. These changes will impact people (with new roles, priorities, structure and processes), leaders (managing a more complex and dynamic environment) and the organisational culture. To consider the degree of change required, ask yourself:

1. What type of organisation do we need to become to fully utilise CRM?

2. To become truly customer focused, what do we need to change?

3. Do we have a robust process for initiating and sustaining change?

The challenges in adopting a CRM approach include:

  • combining the people, structures, processes and technology required to produce the desired results for customers
  • moving from a product and operational focus to a customer focus
  • creating a culture that encourages the pro-active embracing of change
  • managing the change process

Culture and Customer Focus

In thinking about culture, it is worth reflecting on some of the questions commonly asked by leaders.

Isn’t culture a “fuzzy area” that leaders have little influence on?

No. Culture is manifested in what people focus on, what is expected of them, what they are rewarded and penalised for, and the behaviours and attitudes the leaders model and the organisational systems reinforce. A primary task of any leader is, therefore, the management of that culture.

Does culture have much impact on our results?

Yes. Kotter and Heskett’s (1992) eleven year analysis produced some compelling results about how the “culture” of a range of organisations influenced their economic performance. They concluded that organisations with “adaptive cultures” outperformed “non-adaptive cultures” by a factor of four in terms of revenue, twelve in terms of stock price and 700+ in terms of net incomes. Many businesses may think “we are doing well now with our current culture”. It is more useful to ask “how can we improve our culture to improve our results?”

In adopting a CRM system, an organisation typically wants to be able to say that “we are customer focused and therefore flexible and quick on our feet”. If your clients describe you in terms such as “know what we do, adaptable, high quality, take time to listen, responsible”, you may already have a culture that will embrace the changes required to fully utilise CRM.

If however, your clients use terms such as “pushy, slow decision making, don’t know us, red tape and detail” to describe your organisation, or they say that “your products work, but your organisation doesn’t”, you can assume that culturally and practically you will have a few challenges ahead in adopting CRM. Once an organisation defines its current and desired cultures, it can then design suitable change initiatives to close the “gap”.

People and Change

Change is about people, but many software implementation methodologies focus almost exclusively on the task aspect of implementation. The most successful way to implement new systems and business processes is to address the people and task aspects simultaneously.

In tackling the people side of change, we need to recognise that, regardless of how “rational” people may appear, change is an emotional event. We know that people’s emotions influence their behaviour and ability to embrace the change. We also know that change is perceived as significant when it impacts people personally. Just try reorganising your office layout to see the level of emotionally based behaviour demonstrated!

When change is in the air, people will be asking a number of questions: “why is this happening?”, “what will happen?”, “what’s in it for me?”, “how will it impact me?” and “what do I need to do?” Interestingly, if the answers to these questions are not provided, people make them up. Providing accurate meaning around the CRM system and the changes it creates is therefore vital.

Harnessing the opportunities a CRM system creates involves increasing the ability of people to thrive in an environment of constant, rapid and unpredictable change. People’s sense of control s enhanced through involvement in the change process. Their expectations are more realistic when common meaning is created. The ability of people to participate and show initiative is improved when they receive support and education. The ability of the organisation to function is enhanced when change is created at a rate that can be absorbed by its people.

The people aspects of change can seem to be “too hard” or “too intangible” and may therefore be avoided by leaders. Yet addressing the people side of change is just another set of skills that can be learnt and, once learnt, can facilitate the creation of adaptive cultures.

The Impact of Leadership

An organisation’s leaders are a primary driver and model of the culture. What leaders do and say impacts the performance of others. Leaders are therefore always creating and reinforcing a culture. Given this, it is helpful if leaders consciously and pro-actively create the culture required for success.

In driving through the changes necessary to embrace a CRM, leaders have a number of roles in:

1. emphasising the importance of customers, people, stakeholders and change

2. enrolling people, creating meaning, and setting direction and staff expectations

3. harnessing the resources required

4. removing obstacles

5. coaching and supporting people

6. maintaining a constant focus on change

7. maintaining the momentum of change over time.

In short, leaders create an environment in which people can operate at their highest possible level.

Use a Process

There is great value in using a change process to guide the adoption of a CRM system. This may seem obvious, but it is amazing how many organisations miss this point entirely, and later find themselves spending time sorting out issues that a good process would have addressed up front.

An effective change process anticipates the typical challenges to be faced, provides a common language and framework, and aids in overcoming unexpected obstacles. The first step in the process is to realise that for change to be embraced, there needs to be clearly articulated and compelling reasons for it to take place. Once people agree that change is essential, they are more willing to listen to the “solutions”. In other words, why would busy people put themselves through the discomfort of change if they are not convinced of its merits?

A truly customer focused organisation is built upon a culture that allows people to grasp the opportunities and handle the challenges a CRM system produces. As the customers change, the organisation responds accordingly. The organisation recognises that it has to change and that real opportunities come t...

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Date posted: 2014-12-16 | Comments(0)

7 Steps to Success with CRM

1. Commitment from the Top to an “Outward Facing”, Customer Centric Culture

The right culture must be adopted from the CEO down. This commitment is the cornerstone of successful CRM. It is not about buying some technology and believing you now have the answer to winning and retaining profitable customers.

Organisations will be in different stages of their “customer centric lifecycle”, so appropriately tailored and ongoing training must be implemented, aligning customer facing personnel with the desired behaviour.

2. Identify and Align Key Business Drivers with IT

(Remember information technology is merely a tool of the business, not a goal in itself.)

Two key activities to the processes of identifying and aligning are:

  1. CEO/COO briefing
  2. Brief, High Level Workshops

CEO/COO Briefing

Understand the company vision and objectives from top line executives and how IT impacts these. high level assessment criteria (e.g. local support, industry experience, fit to component model. technology vision, integration strategy, financial stability etc.) should be identified and documented as the benchmark for aligning potential solutions with strategic objectives.

Brief, High Level Workshops

These workshops should be conducted with a representative cross section of key users and executives from core business streams to identify issues at the coal face. The issues should reinforce and/or add to key assessment criteria identified above.

  • Brief - we mean one hour per business stream per representative office.
  • High level - we look at the big picture, not get bogged down with minute detail, for example, “our salesman are losing deals because competitors can print quotes from their laptops on the spot” as opposed to “I don’t like this screen or colour”.

The workshop process is vital as it encourages user buy in from the start. It is also highly recommended to have the workshops facilitated by an external and independent partner:

  • External because he can advise on world's best practice, experience of other organisations and on a range of products and methods. He brings fresh ideas, questions incumbent routines and is not bound by pre-existing culture, methods and politics.
  • Independent because you don’t want to go through “the process” only to find the consultant is aligning your business to his product.

3. Vendor Alignment to Key Business Drivers

This involves a two-step process:

Step One

Appropriate vendors are selected for each core business stream under review, and briefed of the key drivers. Vendors should be asked to submit a Positioning Statement addressing how their products and services can meet the business objectives given the assessment criteria. High level indicative pricing should also be requested, mainly to rule out solutions that are obvious budget misfits.

Step Two

Vendor Positioning Statements are reviewed, summarised and scored based on the key assessment criteria, forming a “probables” and “possibles” list.
Again, it is important your partner in this process is independent and sufficiently credentialed, not just locally but globally to identify existing technologies and vendors as well as the latest and emerging products that could potentially deliver you a strategic edge.

4. Preparing the Business Case

This is an evolutionary process with input from the first three steps, continuing through step 5 prior to sign off:

(a) Start by comparing the benefits and costs

This should include the valuing of tangible as well as intangible benefits and stating all assumptions made, goals and possible technologies to be used. At this stage high level conceptual design and cost-benefits statements should be well documented, shared and discussed with executive officers;

(b) Define measurable outcomes

These will be used to determine the success or failure of the project at various times during “work-in-progress” and the cycle of “live” use;

(c) Executive to review the Business Case to-date, deciding on the next course of action

For example continue, adjust and continue, don’t continue. If the business case is rejected the process stops here, otherwise: Go to Step 5.

After Step 5 we complete the Business Case.

(d) With specific details now known (preferred vendor, price, project plan, deliverables, live date etc).

(e) Provided the business case stands up to critical questioning, likely to come from the Board of Directors, is signed off, the budget approved and the scene is set for the actual implementation. 

It should be noted that particularly in large implementations there might well be a prototyping phase prior to contract acceptance and full implementation.

Now to Step 6, Implementation

5. Prepare a Detailed Functional Requirements Checklist

The shortlisted vendors are issued with an official Requirements For Tender (RFT) for completion by a certain date. Firmer pricing is requested in this process.
RFT submissions are then reviewed and demonstrations organised for vendors still in contention. The field is then narrowed to a preferred vendor, with may be one or two fall back options. Final pricing is negotiated and draft contracts drawn up.
Now back to Steps 4 (d) and 4 (e) to complete the business case

6. Implementation

Many projects get into difficulties during this phase. Key risk areas are:-

  • The experience of the suppliers and contractors involved;
  • Commitment of senior management to the success of this project;
  • Communication of expectations between users, managers and suppliers;
  • Size of the project; it should contain phases, with milestones and deliverables every few months. Value should be delivered as early as possible in the project life cycle.
A key part of this step is the introduction of the new systems and services. The occasion must be used to demonstrate the commitment of the organisation to its customers. Depending upon how radical the change is, it may be advisable to introduce a new service into a trial area first and for a limited time until one can confidently make it generally available.

7. Analysis, Monitoring and Adjustments

The design of Customer Relationship Management systems must include key performance indicators for the ongoing monitoring of customer satisfaction and possibly market share. Experienced CRM designers can help to specify key performance indicators and their measurements.
A CRM implementation will be a major project, in large organisations often ranging over one or two years. Good project management, commitment at the board level and a phased approach are essential.

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Date posted: 2014-12-15 | Comments(0)

Which CRM Software is Best for You?

Once you know what the business need is, where the focus will be, what sort of vendor you want to work with then it will be time to evaluate software. As well as looking at the marketing or service function, you will need to look at the basic features that make the software something your business wants to use.

We have broken this into three areas:

  1. Data – reporting, importing, exporting and integration with other systems
  2. Useability – common tasks, email and mobile workers
  3. Tailoring for your needs

To help you decide which CRM software is best for you we have put together a spreadsheet for easy comparison and evaluation. Click here to download it for free!

Importing/Exporting Data

You need to be able to import existing client and prospect contact information from existing sources such as spreadsheets, Microsoft Outlook and your accounting package as well as export information out of the CRM software.

Some believe that the top 3 priorities for a successful CRM implementation are 1) Data 2) Data and 3) Data – as the old saying goes – rubbish in, rubbish out.

Your users need to be able to trust the new system and starting off with good clean data is important.


To get the most from your investment in new CRM software, you will need to be able to generate custom reports that are meaningful to you, your managers, your staff and your business. The CRM software you choose should allow you lots of flexibility in this regard.

Data Integration

It is important your CRM solution works seamlessly with your back office products, such as your accountancy and distribution systems.

Some of the CRM suite vendors are part of a larger suite that may include financial, manufacturing and distribution functions. Consider whether you need a CRM that ‘reaches back’ into your supply chain – and how far it needs to go.


Your new CRM software should be easy and intuitive to use and not require hours of specialised training for your staff. As a rule, if it is not logical and easy to use, your sales force and customer service staff will not use it correctly. Even a very complex high end CRM solution shouldn’t mean it is difficult to use. Check that the interfaces are easy to navigate and that most common tasks are not laborious or hard to use. The right CRM solution should make life easier for you and your staff.


Like most business purchases, you get what you pay for. That doesn’t mean you should go and buy the most expensive solution on the market. For many small businesses, a simple “off the shelf” solution will be ideal. Similarly, a department in a larger business may be well served by an “off the shelf” solution with good integration capability.

For other larger businesses whose needs are more complex, a more robust, scalable and powerful system may be required.


The work force of today is more mobile than ever, so your sales and customer service teams may need to be able to connect to CRM software via their home based computer, Notebook, or smartphone/Blackberry/iPhone.

Consider how you want them to access the system – do you want a simple Internet access or a Secure VPN.

Many companies now provide fully functional but cut down phone-based applications based on the CRM application – this means that mobile users can transact on the road as we as they do in the office.


It is important your CRM solution works seamlessly with your office productivity applications such as word processing, spreadsheets and email.

For example if you use Outlook, find out how emails sent from Outlook are recorded in the CRM system.


It is essential your CRM system works for your business processes. This is less of a problem than it used to be as the best solutions these days can be fully customised but check how easy it is. Check how deeply you can customise and how much it will cost during the initial set-up.

A word of warning – customisation is good – modification is usually bad. Customisations as a general rule mean that system upgrades happen easily and without too many hitches. Modifications on the other hand often mean that you have changed something that the software vendor does not support. So at upgrade time you need to take care of changing the modification code – at your expense.

Setup and Training

A system can be setup quite quickly and easily by your Implementer. Time is usually taken in the tailoring of that system for your specific needs. This may include tailoring screens for your specific business practices such as geography, or customer identification. Getting the system right at this point in time - you will save and make money in the long term.

Setup should also cover areas such as importing your current data, ensuring it is of high quality etc. Similarly, basic reports to run your business should be created at setup time.

Training needs to be taken care of and is important to ensure that users are enthusiastic about the system.


The life-time costs of a CRM system can include:

  • Implementation/Consulting costs
  • Maintenance and support fees
  • Upgrade costs
  • Technical support and training
  • Conversion from a cloud solution to an on-site solution (or vice versa)
  • Some CRM software packages are deceptively inexpensive but make up for it in ongoing support costs. So ensure that you have a complete understanding of ALL costs before signing contracts.

On-site or Cloud CRM

The availability of Cloud CRM solutions can offer a particular advantage for smaller companies who don’t have the finances to spend on software, or the understanding of IT to manage it themselves. Paying monthly might be popular, but on-site systems tend to be more cost-effective over time and offer far greater customisation flexibility. It’s almost always worth considering a Cloud application but, unless finances are really tight, it shouldn’t be your sole buying factor.

For more information on these different options see our pages on on-site CRM and Cloud CRM.


There are many CRM choices on the market. The key in identifying what solution is best for you is to understand how easy it is to achieve your goals with this new system.

Whether your system is built for sales or customer service, it is important that the users find it a useful tool and that information is easy to enter and report on.

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Date posted: 2014-12-15 | Comments(0)

CRM for Large Businesses

There are eight key steps for a large business to consider.

  1. Review our site
  2. Define Requirements & Objectives
  3. Review Shortlist
  4. Ensure Vendors can meet your needs
  5. Shortlist two Vendors
  6. Conduct an Evaluation
  7. Negotiate
  8. Choose the Vendor and Deploy your solution

Review our site

This site aims to de-mystify the technology behind buying CRM Software.

Key things to answer at this stage include

  1. What are the business drivers behind the CRM Purchase? (e.g. increase revenue, improve customer service)
  2. What functionality do you need?
  3. Do you have a preference for a cloud or on-site solution?

Define your Requirements and Objectives

Your requirements list should include the following:

  • Vendor Requirements
  • Implementer Requirements
  • Functional Requirements
  • Business Process/Work Flow
  • Technical Requirements
  • Integration Requirements
  • Cost and Budget Requirements
  • Implementation Requirements
  • Training and Support Requirements

You will note that our recommendations will usually consist of:

  • Large and Profitable software companies
  • Companies with a large number of customers across many industries
  • Companies with an extensive range of partners and services options

We do this for important reasons:

  • Choosing a CRM system is a business decision with expected system lifetime of 5-8 years
  • Software companies only survive if they can grow their new customer numbers – it helps fund R&D for new functionality
  • They are more likely to be viable and still improving the products in 5 years time

Once you have defined your business objectives and requirements in your RFP, the next step is to engage these suggested vendors/implementers. Look for vendors who have a solid track record, are familiar with your industry and areas of specific needs.

Prove a vendor meets your needs

After submitting your RFP to vendors on your short list, you will likely need to conduct one-on-one meetings with these vendors to explain your company’s needs and requirements in depth.

Focus on who they have as references customers in your industry and of your size. This will ensure that they understand your industry and the key areas of functionality needed to make the solution a success. Have the vendor setup conference calls or site visits to companies they have worked with in the past.

Shortlist the top two Vendors

Once you have conducted the initial evaluation of vendors on your short list, you need to cut that list down to the top two vendors. Separate the Contenders from the Pretenders!

Although you may have a strong preference for a vendor early in the evaluation process, it is important to keep an open mind. In addition, it provides you some leverage during negotiation.

The key questions are who can your work with; who do you trust to be with you over the long haul? (A typical CRM system may be in place for 5-8 years.)

Conduct Comprehensive Vendor Reviews

This is the time when vendors will need to prove that they can fulfil your CRM needs. Review and compare how the different vendors’ applications work and map to your internal business processes.

Draw up a list of key attributes that you are looking for and score the vendors against the attributes. The Implementers will often have these available and will use them as resources to guide you through the evaluation phase.

Negotiate prior to deciding the vendor

One of the reasons to keep two companies on the shortlist is that you need to be able to negotiate the best terms.

The life-time costs of a CRM system can include:

  1. Implementation/Consulting costs
  2. Maintenance and support fees
  3. Upgrade costs
  4. Technical support and training
  5. Conversion from a cloud solution to an on-site solution (or vice versa)

Having two companies involved in this process may save you significant money.

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Date posted: 2014-12-15 | Comments(0)