A business case for a CRM system must examine benefits and risks involved with implementing CRM and, conversely, not implementing CRM. Provided the benefits outweigh the costs and risks, the conclusion should be a compelling argument for implementation.
Chances are your organisation has a Business Case template or prescribed process so that decision-makers can more easily compare and prioritise business cases. If so, then use it but be sure to cover these key ingredients.
Why does this organisation need a CRM system now?
The answer to this question frames how the business case needs to be evaluated.
It may be that you need a CRM system to improve effectiveness and efficiency of your sales team or to automate some processes. If so, the costs and benefits can be compared with other means to improve effectiveness and efficiency.
But if your existing system is about to expire or if it is a legacy system dependent on a single (possibly aging) person then evaluation will focus on the best method to mitigate a pending and significant disaster.
Similarly, if your competitors have implemented CRM and are starting to eat away at your market share, evaluation needs to focus on catching up and halting the downwards trend.
For a CRM system to deliver optimal value, it must support the organisation’s strategy. It must enable the organisation to achieve competitive advantage.
If the strategic focus of the organisation is not aligned with a CRM system, you may not be ready for CRM and you should consider parking the business case. If it is aligned, the business case must show this clearly. Help the decision-makers join the dots and see how the CRM system gives legs to their strategy.
What changes will need to be made to the organisation, to business processes and to related systems?
By its nature, a fully-functional CRM system is cross-departmental and brings changes in the way people work and interact. Some work and hence jobs may be eliminated by automation and some new roles may be needed to analyse customers demographically, geographically and economically for greater insights or to identify and target loyal customers and proactively relate with them.
Very rarely will a CRM implementation be just an IT exercise.
Make sure you include ALL the costs. The obvious costs are the license costs, the initial customisation and implementation cost and the on-going support costs. Consider also the on-going costs of enhancements and upgrades because you will want your system to stay up-to-date and take advantage of the new functionality and power that becomes available.
Remember to factor in the time required to implement and manage the system. Include your project team, staff involved in workshops to define the detailed system requirements, UAT (user acceptance testing), time out for training and on-going internal system support.
The benefits may be more challenging to quantify. You should discuss and agree on these with the key managers involved.
Quantify benefits from the following as applicable:
Regarding ROI calculations, you should use the same formula as is used for other business cases – so the business cases can be compared. But beware of overly-simplistic calculations. A CRM project should be evaluated over a reasonable time-frame (perhaps 5 years) so a discounted ROI will normally be required.
Where a benefit cannot be quantified with any level of confidence, then it should be stated. Soft or intangible benefits may include:
It is worthwhile at the business case stage to provide the metrics that will be used to measure the success of the CRM project. This adds credibility to the benefits and provides a valuable focus to the project when it is approved.
Some of the metrics will be existing and already monitored. Others can be easily measured as part of the CRM system implementation. For example system usage can be monitored and reported and elapsed time per sales opportunity or service case can be calculated by the system.
It’s true – not all CRM projects are successful. Some CRM projects are embarked on without even a business case!
Your business case will eliminate or minimise the major reasons why CRM systems fail. Your planned CRM project will:
Yet there are other risks you may need to consider: