CRM Software – Cost Of Ownership and Return On Investment

The cost of ownership and return on investment of your CRM software depends on your requirements initially and over time. A large enterprise that requires integration into other business systems will need to deploy their customer relationship management solution in-house. A smaller business whose requirements are not as demanding can use web based CRM software and can start almost immediately. A well planned CRM software strategy can save you time and money now, yet allow you to scale your solution as your business grows. Microsoft Dynamics CRM is one such solution that gives you a broad scope to plan for your immediate and future requirements.

For many companies, a cost of ownership model over a 3-5 year period will give a better return on investment with an in-house system. To justify this however, you need to think out your strategy carefully. One of the key decision points is whether you will need to integrate CRM software into your accounting system or a specialised customer service or ERP system. In this case, although the initial cost of ownership can be quite substantial your return will justify such an upfront investment. The initial costs for example will involve license fees, consulting fees, and deployment costs.

Your licenses, generally on a per user basis need to be paid up front, although you then own them and don’t have an ongoing cost. You may also have to engage specialists that will assist you in understanding your data and the interfaces between your software systems and your CRM. However, a consulting company with extensive experience will help you deploy faster. Additionally, you may have options to choose various modules and it is possible that your CRM software can be upgraded when required. These may include a marketing module to manage your campaigns and your leads. Similarly, a service desk module will enable you to manage incidents effectively.

A web based CRM software solution does not give you the control that an in-house system allows. However, you can also purchase specific modules with the system. You may just start with a basic platform that could include sales contact management, sales and pipeline opportunity management. Upgraded modules are similar to an in-house package.

One consideration of a web based system is whether you have the ability to upgrade into an in-house system as you grow. Microsoft CRM ,for example, gives you the flexibility of a seamless upgrade to an in house system with your data and configurations remaining intact.

Return on investment can be viewed as tangible and intangible factors.

Tangible factors are easier to quantify. For example if your sales team is able to realise opportunities faster and close transactions 20% quicker, then the productivity is increased and your potential revenue also increases. Your CRM will allow you to run specific marketing campaigns. Segmenting your database and recording client and prospect interests will allow you to target your campaigns more effectively. Specific campaigns, run from your CRM can increase leads to be passed to sales. Lead management therefore can be quantified. Your return based on actual sales as a result of your marketing campaign can be measured specifically.

The intangible factors are much more difficult to quantify. CRM software enables you to automate your sales and marketing processes. To substantiate productivity gains you need to have a clear understanding of your manual processes. Initially, you should set up the goals and objectives on intangible benefits prior to the CRM project starting. If your goal is to make your sales team 20% more productive, then you will need to determine what CRM processes you will develop to give sales 20% more time to generate and close more opportunities. Similarly, if automating your sales processes reduces sales closure rates from 6 to 5 months then you will have a 15% productivity gain.

Customer service modules too can be measured if your incidents can be reduced through better handling, escalation, and knowledge. Reducing customer complaints and increasing your customer satisfaction will have a positive effect on your revenue and profit.

Automation in sales, marketing, and customer service can make a significant difference to your bottom line.

In considering a customer relationship management solution you need to understand your requirements first. This will determine what system, in-house or a web based CRM software solution, is right for you. It will also help you determine what CRM products and services are suitable. Your initial cost of ownership depends on this. Secondly, develop your goals and objectives to justify your return on investment. To do this, you will need to be clear on your current sales, marketing and customer service processes and then set the benchmarks you will need to reach in order to achieve a solid return.

By Antony Dutton, CSG Aaromba Technologies – Microsoft CRM software Sydney specialists who will give you a CRM Demo to evaluate your requirements.

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