Estimated Costs

     Techrepublic states that CRM projects begin in the thousands and can go up quickly into the millions.  They say that one department using CRM  can cost an organization $15,000 to $30,000.   In addition, Gartner states that "Worldwide CRM software and services will go up from $23 billion in 2000 to $76.3 billion by 2005. (Norton, 2001)" 

    PeopleSoft (http://peoplesoft.com/corp/en/public_index.asp), SAS (http://www.sas.com/), and E.piphany (http://www.epiphany.com/index.html)  do not provide software prices over their web-site.   Gartner says that the trend is to lower initial investment by offering software discounts of 10 to 20 percent.  Vendors then recoup costs by offering higher maintenance and licensing ranging from 15 to 23 percent.  Some other price increases  up to 300 percent come from mistakes in not understanding the terms and conditions of the licensing agreement (Gartner, 2001).  However, they do sell handbooks and analysis guides for anywhere from $85.00 to $1500.00.   

    These costs contribute to the reason why enterprises are reluctant to begin a CRM project.  It comes down to the return on investment (ROI) of any CRM project.  ROI is "determined by the number of sales leads an organization generates, discards, and completes compared with the cost of the software used to track sales and customer metrics (Norton, 2001)."  There is an online ROI calculator available from Revenio. 

CRM In Action

    AMF Bowling is an excellent example of how CRM can provide a competitive advantage.  AMF Bowling implemented a CRM in 45 days.  They provided laptop and personal digital assistance to their mobile sales force and desktops in the corporate office.  They use the CRM modules for its help-desk and to track its customers.  It then uses this information to conduct marketing promotions. They also have improved 50% in sales efficiency.  They have saved $250,000 per sales person by eliminating duplicate commissions during training periods.  (Mollison, 2002)

Some products that will improve CRM capabilities are:

1. CRM selling vertical products which are boilerplate and industry specific that minimizes customization and saves money (Krill, 2002). 
   

2. CRM and voice services merge which results in a voice-enabled CRM product that gives an online retailer's customer a self-service option (Bannon, 2002)
   

3. "CRM on the go.  This program offers mobile synchronization, by determining what data each user needs.  They the application enables the mobile to intelligently identify the relationships between customer, transactions, data and user (Jaroneczyk, 2002). 
   

CRM Risks

   The main risks are:

        "1)  Failure to identify and focus on specific business problems.

          2)  Lack of active senior management sponsorhsip.

          3)  Poor user acceptance.

          4)  Trying to automate a poorly defined process."  (Turban, McLean,

               Wetherbe, 2002)

Overall, CRM can be very costly to implement.  However, the benefits of a succesful implementation can achieve efficiency and a good return on investment.  CRM can increase sales, customer service, marketing, and financial areas of your business. 

Sources

Information Technology for Management, Turban, McLean and Wetherbe, 2002

Eight Building Blocks of CRM, Radcliffe, 2001

TechRepublic resources can help your track CRM trends, Norton, 2002

Price premiums lurk behind CRM software discounts, Gartner, 2001

ROI and analytical processing key to CRM success, Norton, 2001

Bowling for Dollars: AMF Uses Applix CRM System, Mollison, 2002

CRM evolves upward, Krill, 2002

CRM finds its Voice, Bannan, 2002

CRM on the Go, Jaroneczyk, 2002