A) Discussion Post Questions
Why is estimating the ROI of an CRM project difficult?
What need to be accounted for in the estimation of the ROI of an CRM project? What are the major stages in such estimation?
B) Respond to 2 posts from classmates.
1)
Estimating the ROI of an CRM project can be difficult as it varies according to the assumptions made by the firm's management. Also, It is difficult to concrete financial benefits of CRM initiatives directly. Often, companies consider indirect returns reflect CRM investment. Most of these returns can have a direct impact on costs and revenues, including lower customer acquisition costs, lower costs to serve, higher average transaction margin, and others.
Accuracy is one things that need to be accounted for the estimation of the ROI of an CRM project. In addition, it is important to project the return of the project over several periods to ascertain the trye ROI of the project. Also, projections should consider the entire cycle of developing, implementing, and continuosly improving the CRM strategy ( a process that is long a complex). Lastly, an accurate calculation of ROI entails the understading and development of of measurable indices of business outcomes in each of the stages of implementation.
Major stages in such estimation:
- Setting the target: Determine ROI goal of CRM project based on benchmarking, similar projects, external and internal knowledge.
- Reaching the target: Generate ideas of how to reach target through internal bottom up participation, external views, benchmarks, and others.
- Building consensus and commitment:Have executives and line staff agree on proposed ROI goals and ensure commitment on both sides.
2)
1-Why Estimating the ROI of CRM Difficult?
Measuring the ROI of CRM is difficult because To measure the ROI of CRM, you need to consider the cost of the software, training costs, maintenance costs, costs to migrate the system, and the time it takes your development team to get it up to run. And to measure if the performance has increased, you need to look at how much time it saves employees from updating the system. Sales will increase, customer satisfaction will increase, and better performance will be measured. When trying to estimate the ROI of a CRM project, we need to consider a whole set of aspects like the consulting services associated with the investment, eventual redesign of business processes, IT concerns, and related procurement and maintenance matters (KEENER, 2020).
Estimation of ROI of a CRM
When estimating the ROI of a CRM project, these functions should be accounted for: Consulting Services, Business Processes, Information Technology, Vendor Management, Staffing & Implementation, and Costing (Haines, 2018). The significant stages of calculating the ROI of the CRM project are the Following.
Target setting: Set the ROI goal of CRM according to benchmarking, historical guidelines, similar projects, internal and external knowledge.
Reaching the Target: generate ideas on reaching the selected goal by looking at internal and external knowledge, brainstorming, Brainstorming, and external views.
Building Consensus and Commitment: Reaching firm-wide agreement on the ROI goals and how they will be achieved.