Valuing CRM Projects...
When clients ask us to help them plan CRM projects, there’s a general anticipation that our biggest contribution will be helping them cut through the fog of competing vendor claims to identify technologies that will best suit their needs and budgets. While this is an important part of our planning services, if you approached clients who have gone through the planning programme, and asked them what helped them the most, I suspect the answer would, in the main, be the work we’ve done in establishing the business case and associated costs of, and returns on, investment.
Getting a clear understanding of what resources a CRM project will need, and what benefits it will provide, are a key foundation on which to build a successful project. In my experience, CRM projects are generally under-resourced and under-funded, and as a result vastly under perform their return on investment potential.
When an organisation has a clear up-front understanding of the value of a project, it can start to make informed judgements on appropriate investment levels. If you decide to invest in the stock market and wanted to appraise the value of a share you would be interested to know what dividend it paid. The value of that dividend (and projected growth) would guide how much you were prepared to pay for that share.
Part of the reason for projects being under-funded (aside from a general lack of understanding of the resource demands of CRM projects) is that, as a general rule, business cases, to the extent they actually exist, are often too broad-brush for executive boards to justify the expenditure levels that are realistic in order to achieve a high pay-back system. In other words, the less clear you are as to what the dividend will be, the lower your valuation of that share.
Being clear on project pay-back up front, helps organisations put the horse before the cart, by helping them realistically appraise what’s required to make a project a success. Armed with this information organisations can make informed judgements on whether, when, and how to proceed, and to avoid the twilight world of under-resourced CRM projects that soak up resources but give very little back in return.
Getting a clear understanding of what resources a CRM project will need, and what benefits it will provide, are a key foundation on which to build a successful project. In my experience, CRM projects are generally under-resourced and under-funded, and as a result vastly under perform their return on investment potential.
When an organisation has a clear up-front understanding of the value of a project, it can start to make informed judgements on appropriate investment levels. If you decide to invest in the stock market and wanted to appraise the value of a share you would be interested to know what dividend it paid. The value of that dividend (and projected growth) would guide how much you were prepared to pay for that share.
Part of the reason for projects being under-funded (aside from a general lack of understanding of the resource demands of CRM projects) is that, as a general rule, business cases, to the extent they actually exist, are often too broad-brush for executive boards to justify the expenditure levels that are realistic in order to achieve a high pay-back system. In other words, the less clear you are as to what the dividend will be, the lower your valuation of that share.
Being clear on project pay-back up front, helps organisations put the horse before the cart, by helping them realistically appraise what’s required to make a project a success. Armed with this information organisations can make informed judgements on whether, when, and how to proceed, and to avoid the twilight world of under-resourced CRM projects that soak up resources but give very little back in return.
posted by Richard Boardman at 3:04 pm
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