Question

1. What are some of the differences in estimating the benefits for CRM investments versus determining the return on more traditional investment situations?
2. Please use at least 2 additional materials (e.g. videos, articles) to illustrate your answer.

Answer 1

The difference in estimating the benefits from a CRM and between the return on other investments are twofold:

1. The benefit of CRMs are mostly soft and intangible since they are mostly productivity based. The main aim of CRM implementation is to enhance the sales activity and process. It leads to improved turnaround time for quote to cash process. Unlike other investments, where future cash flows are taken into account and their current value is measured by appropriating them with current inflation rates and then subtracted with the initial investment cost to understand net benefit. In CRM, benefits are realized on the productivity enhancement.
2. Secondly, since most of the benefits are from cost savings, to understand the benefits from the CRM, enterprise first needs to understand its current cost base. Unless and until the current cost base in know, it is very difficult to measure and quantify the improvement since the total cost of operations improvement would not be able to calculate in such scenarios.