It can be difficult to identify what return has actually been acheived from implementing a CRM system post system implementation. Key to getting a good feel for the ROI is doing some ground work prior to system installation and even in advance of system selection.

Ideally the project team will have identified the issues required to be resolved through implementing the system prior to choosing the system. The decision in selecting the best system should then have been assessed based on factors including the cost of the system but more importantly the ability of the system to address the issues previously identified. Based on all of this information an anticipated Return on Investment is calculated.

One the system has been implemented, each of the previously mentioned issues is re-assessed. The process used prior to implementing the system is evaluated against the process in place after implementation (remember most IT system functions are introduced to replace or complement existing manual processes). The time saving or extra time taken is calculated in man hours for each function. This is then multiplied by an hourly rate, which may differ between departments but should be based on the relevant wage rate plus relevant overheads.

This gives a good indication of the savings in terms of existing process improvements. Next we need to consider new functions. For example, the introduction of CRM often opens the way for much improved marketing automation. This can be more difficult to quantify since we need some measure of the response to the new procedures. This is where it really depends on the business. For example, a business with a web shop might start a direct mail marketing campaign. There could be a coupon code which the user enters when buying on the website. This would allow for an analysis of the volume of new business based on the new marketing technique. However, bear in mind that starting a new marketing campaign or technique may mean stopping another. So we now need to measure the value of response to the old technique and deduct this from the calculated value of the new one.

This can be a complex area, going too deep may involve a costly analysis which may in fact cost more than the benefit derived from the results. However, it is important to have a reasonably accurate valuation of the benefits in place post CRM “go-live”. Accountability is key.