Building the Business Case for CRM

By Barton Goldenberg  |  Posted 2001-08-27 Print this article Print

In this column, I want to describe the critical role of the CRM business case

In my last column, "CRM Projects: Why the Doom and Gloom?" (see eWeek, April 23), I suggested successful CRM initiatives are possible, but they require a company to set base-line metrics and improvement objectives for the parts of the business that will be automated. They also require companies to regularly measure and report on the accomplishment of each objective.

In this column, I want to describe the critical role of the CRM business case, which I believe is the document that expresses todays base-line metrics as well as tomorrows desired metrics and the measurement procedures that will be used to ensure that desired metrics are achieved.

A good CRM business case will contain the following five sections:

Executive summary. This provides a description of your companys current state of CRM; a summary of your CRM value proposition, including the metrics that will be measured throughout the project; details on key financials, including cost/benefit analysis, break-even analysis and ROI calculations; as well as a statement of executive commitment to CRM metric reviews at least three times per year. The summary also details the project scope and implementation timetable.

Key business risks and mitigating factors. This section lists the various business, user and technical risks that may be associated with your project. For example, the technology may prove too complex, or the proposed system support may fail to meet user needs. Include a plan for countering each identified risk.

Recommended technical solution. Provides a description of alternatives considered, the proposed technical solution, existing system interfaces (for example, back-office ERP systems), your disaster recovery policy, hot-spares policy and support/help desk policy.

Operational/organizational impact. Specifies who will be trained on the system and when, which business processes will be impacted by the system, what is the basis for organizational buy-in, how rewards will be used to motivate consistent system usage and how system metrics will make their way down to the user level.

Appendices. These are by far the most important sections of the CRM business case. The appendices (one for each set of system users) lay out exactly which current activities will be impacted by the CRM system and how they will be impacted. CRM system impacts tend to fall into the following areas: productivity improvements, cost savings, better employee satisfaction, enhanced customer satisfaction, greater customer knowledge, higher customer loyalty and superior customer retention rates. The appendices should show not just, for example, that the CRM system is likely to save sales reps 8 hours per week, it must also define how these 8 hours will be spent (for example, more calls, better calls, more time to coach, higher close ratios and so on). Alternatively, if you are able to realize a $20,000 annual savings in catalog mailings, how will this money be reallocated?

In summary, drive your CRM initiatives success via a succinct and meaningful CRM Business Case with concrete metrics for each user group. Then use the Business Case as the tool to regularly measure the business impact of the system for each user group.

As Peter Drucker reminded us years ago, "If you cant measure it, you cant manage it."

Barton Goldenberg Barton Goldenberg, president of ISM Inc., has established his Bethesda, Maryland-based company as premier Customer Relationship Management (CRM) and Real-Time Enterprise (RTE) strategic advisors, offering consulting and research services to Global 2000 companies, vendors and financial organizations. He founded ISM in 1985.

Goldenberg's foresight and vision to integrate sales, marketing, customer service, e-business, and business intelligence has been central to today's CRM industry success. He is now pioneering a new business model for the 21st century, which will be in his upcoming book, Creating the Real-Time Enterprise.

Goldenberg is co-chairman and co-founder of the CRM and RTE conferences and expositions sponsored by DCI Inc worldwide.

His bottom-line, results-oriented style has made him popular with chief executives around the world and has helped to make him a sought-after speaker and writer. In the United States, Europe, and Asia, Goldenberg conducts CRM and RTE management briefings and has helped companies worldwide successfully implement CRM. Clients include Abbey National, IBM, Lucent Technologies, AAA Mid-Atlantic, New York Stock Exchange, McGraw-Hill, Roche and Xerox.

Goldenberg is the author of CRM Automation (Prentice Hall, 2002 and 2003), which provides a step-by-step process for successfully implementing a CRM program, and the benchmark Guide to CRM Automation (now in its 12th edition), which features ISM's selection of the Top 30 software packages for the enterprise and the small and medium size business sectors. The Guide and CRM-related software reviews are featured online at

Goldenberg is a columnist for CRM Magazine and serves as a member of the Editorial Board. He contributes to eWeek and Sales and Marketing Management magazine, for which he also serves as an editorial advisor. He is often quoted in the media, including BusinessWeek, CIO, Computerworld, Information Week, and Selling Power.

In 1999, he was recognized by CRM Magazine as one of the 'Ten Most Influential People in Customer Relationship Management' for his leadership in galvanizing the CRM industry and his role in co-founding and co-chairing DCI's CRM conferences. In 2002, CRM Magazine awarded Goldenberg as one of the '20 Most Influential CRM Executives of the Year.'
Goldenberg is one of only three inductees into the newly-created CRM Hall of Fame presented by CRM Magazine at the August 2003 DCI CRM Conference in New York.

Prior to founding ISM, Mr. Goldenberg held senior management positions at the U.S. Department of State and Monsanto Europe S.A. He holds a B.Sc. (Economics) degree with honors from the Wharton School of Business and a M.Sc. (Economics) degree from the London School of Economics.

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