On justification for CRM investments

I've just read through an interesting article by Scott Santucci on CustomerThink. I do not neccessarily agree with his views, but the premise of his post is interesting however. What would you say if your CEO asked you "What did I get for my CRM Investment?". It's probably impossible for most CRM consultants, Sales or Services Process Owners, CIO's or IT Managers to answer that question. Why? Because most companies implementing a CRM solution "forget" to define key success factors or CRM success KPI's at the outset of their process improvement or application implementation projects or programs.

It's hard to say what the best measure of success of a CRM process improvement or CRM application implementation is, because every companies situation is more or less unique and an analysis of the current CRM environment must be made before one embarks on re-engineering processes or applications. Scott's has a point when he says a company needs to figure out what makes it's sales force tick, before embarking on a large investment in CRM technology. But this applies to every investment:

1. define a Key Performance Indicator, or metric (number of calls, conversion rate of opportunities, quality of customer data) of what you would like to improve that is measurable.
   
2. Measure continously during your project and also during the lifecycle of your new process or application.

Perhaps the best advise is to not be afraid to kill a project or discontinue an investment when it fails to yield the results you had expected at the onset. It is better to stop spending time and money on a failed initiative than to keep on investing because of a promise that an application or project would run for X number of years.

On CRM and User Adoption (2)

A little while ago I posted about the difficulty in getting Sales Representatives to use CRM applications, as opposed to Service Reps. A recent survey in California, by the Sales Lead Management Association, shows some interesting results, as quoted in this Chris Bucholtz article on Inside CRM. Chris quotes the survey's somewhat suprising results:

"83 percent of the respondents don’t track ROI on investments in lead generation. Just 5 percent tracked ROI on SFA. How do these companies know whether their systems are helping or if they’re just making busy work for consultants or IT people?"

One could arrive at a number of conclusions based on this survey, such as:

1. SFA Solutions are implemented for the simple reason that everybody's doing it.
2. It's still difficult to measure ROI for CRM implementations.

I believe the main reason for not tracking ROI on SFA investments is the latter. Most companies simply do not know how to measure return, because the benefits of an SFA application are not always tangible and realized immediately after implementation. A series of blog postings on ITToolbox contains observations with regard to measuring CRM ROI, and can provide interesting insights for those who are struggling with the issue of CRM ROI.