develop a budget that takes into account an analysis of 4 critical areas: 1. PAYOFF. You need to know exactly how yourCRM system is going to generate ROI. This will help you focus your project on the right areas. Byknowing how you expect payoff to be achieved, you can plan to achieve it. 2 RISK. You need to figure out where the risk is inyour project because "risk=expense". By figuring out what can go wrong, you can take measures to minimize and contain that risk.
3. SERVICES. Be sure to fully account for the variety of services that will be required. A few often overlooked areas that can increase your services bill significantly include: meetings, testing time, debugging time and "while you’re here…" time. 4. TECHNOLOGY. Choosing the wrong technology is can be a huge waste of money. From the worst case scenario of a totally failed project to having to spend extra money to make the wrong software do things it wasn’t intended to do.
CRM projects represent a significant risk to a small business’ financial health and warrants more "measure twice, cut once" consideration before beginning.
1) Tangible net benefits: A clear and precise cost-benefit analysis which tallies all of the planned project costs, quantifies each of the tangible benefits and calculates key financial performance metrics such as ROI, NPV, IRR and payback period. Costs should be less than 50 percent of the benefits (because of inevitable cost overruns and typical benefit adoption schedules) and the payback period shouldnt exceed 12 months.2) Intangible benefits: A total of the expected intangiblebenefits including key performance indicators that will beused to measure success or shortfalls.
3) Risk assessment: A listing of the people, processand technology risks in order to proactivelymitigate their probability and manage its impact onproject success.When creating a cost-benefit analysis, assessing three maincategories including implementation costs, benefits and riskhelps establish a business case for pre-project planning, andpost-project success measurement. Implementation costsare often split between IT costs and business unit costs,where the business unit costs are typically equal to the ITcosts.
• CRM software licensing and maintenance/support contracts • EDI, database, operating system and other software licensing and maintenance/support contracts • Hardware purchases and maintenance/support contracts including servers, storage and network upgrades (as required)• Software integration and customization, includingdesign, development, test and on-going maintenance • Implementation labor • On-going administration and support labor
Planning and requirements meetings User training and learning time Process change management
• Key benefit area • Key improvement • Reduce cost of sales • Enable self-service sales channels, changing the mix of direct sales, tele-sales, channel/agent sales, and self-service the most effective/- least costly channel in order to reduce costs and improve satisfaction • Reduce sales administrative overhead • Reduce the time spent on sales administrative overhead tasks such as commission calculations, forecasting and reporting enabling increased selling time
• Improve leads to sales closure rates • Increase the percentage of leads which are converted to sales • Increase customer retention • Reduce customer churn rate and eliminate replacement expenses • Improve customer satisfaction and loyalty • Improve customer lifetime value
1. No Clarity on the Project Objectives2. Lack of Executive Sponsorship3. Lack of User Involvement during Planning4. Recreating existing processes in a new system5. Choosing the Wrong Partner
KM focuses largely on finding the right solution to a problem that requires detailed insight, be it locating the right expert at the right time, or ensuring that the solution to a complex problem can be written once but reused many times. It is not difficult to understand why that capability is of great interest to CRM strategists.
Industry estimates suggest that upwards of three quarters of variable support costs come from the time and energy put into the resolution of customer support inquiries, rather than routing and post-call management. "The [routing and management] processes have already been automated by robust systems from Genesys and Aspect, and from Siebel, PeopleSoft, and Clarify," says Ben Kaplan, vice president of marketing and products for knowledge systems developer Kanisa.
"The resolution process remains largely un automated, because [KM] technologies are tools and not solutions, devoid of business process support or any deep integration with the customer service business process," Kaplan says. "The way you make knowledge management successful, making it move customer service metrics, is to integrate it very deeply into the CRM system and very deeply with business process support."
Many companies still have not attained the level of deep integration that ties knowledge base activity (particularly at the self-service level) to a CRM-facing customer record, but companies like computer peripheral manufacturer Adaptec use the intersection of CRM and KM to guide product and service decisions and attempt to waylay customer service overloads before they begin.