Understanding Business case for mobile CRM

BUSINESS CASE FOR MOBILE CRM

 

OBJECTIVES OF THIS ARTICLE

At the end of this lesson, readers should be able to:

  • Discuss how business case can be built for mobile CRM
  • Discuss the elements of a good business case.

Here, I will be using oracle software as a service (saas) as an , example with CRM on Demand and sags CRM, it all about actual business results. Purchasing a CRM application as an on-demand service should motivate both the buyer and seller to maximize quantifiable business improvements. The extent to which customers gain business value from saas CRM applications drives their level of usage. In turn, the level of usage determines the success of the provider. This is a welcome change from the traditional on site license model, in which the upfront costs led both parties to put significant effort into justifying the investment, while doing little after deployment to measure and improve results.

NOTE: ROI is still important, but focus on actual business results.

When purchasing saas or on demand CRM, companies should complete an ROI analysis.

However, a greater portion of their efforts should be focused on measuring and improving the actual value enabled. It is also important to continually assess results.

Determining how much the service should be used in the future. Is part of this ongoing process of accessing and improving actual results.

Companies should ask the following questions when considering investing in a CRM on demand or saas application.

  1. What business goals will the application address? Is it meant to increase revenue by improving the effectiveness of generating new business and /or add on sales; reducing costs by improving the efficiency of marketing, sales and/or service processes; improving IT cost-effectiveness by reducing the cost of supporting a CRM application.
  2. How will the actual results be measured? This has to do with calculating revenue per representative, marketing/sales cost per order, revenue/ margin per account, CRM solution cost per customer among others.
  3. What improvements do you expect from using the application and how do they impact the bottom line? Note: The focus should be on the value of the application (The ROFROI), not merely the fact that the cost is reduced (the I of ROI), a serious shortcoming with many saas CRM business justification.
  4. Does the expected quantifiable benefit justify the total internal and external costs of using the saas for at least one year, including costs to terminate usage or transition to another service provider.   Note: The cost used to assess the investment should include expenses related to making changes to business processes, skills roles/responsibilities and the incentives needed to achieve the expected results.
  5. Who in the organization will be accountable for each of the major expected improvement? Note: Senior business managers should be accountable for expected improvements in revenue and business costs. Senior IT managers should be accountable for improvements in IT cost-effectiveness. Lack of accountability is another major shortcoming of CRM initiatives.
  6. What additional metrics, such as leading indicators and drill down comparisons, can managers use to identify and address the issues that will inevitably arise?

QUESTION TO ASK VENDORS

  1. Besides the standard implementation and technical support, how will you help maximize the business results? That is business oriented training and support, proactive communication and assistance, providing updated/best practices/templates, active community of other users.
  2. Based on your experience work with similar customers, what business, metrics, reports and dashboards will be useful for us to track?.
  3. How does your application help to track and improve business results e.g. dashboards, results, analysis compatibility.

These answers given by the vendor to these questions will help to

  1. Determine whether the investment in the application is justifiable.
  2. It will also help the organization to select the appropriate service provider.

The vendor should also set up the metrics, dashboards and processes for measuring and continuously improving the actual value the application is implemented.

business case for mobile crm

ELEMENTS OF A GOOD BUSINESS CASE

A solid business case is a must to secure resources allocation of operating funds or capital investment in any project, especially when pursuing a new product opportunity, new capacity, or major product extension.

There are a number of critical elements to consider when formulating a business case.

Good business planning forces you to think through all the critical elements of your product strategy. The problem is that taking several weeks or months to write a big document largely based on non validated assumptions and guesswork is a waste of time. According to Steve Blank he said a business plan is a document investors make you write that they don’t read”.  

We need a more lean and systematic way to approach crafting product strategy and constructing business cases something that: Captures our vision, yet forces us to think through all the most important elements of any product strategy.

(1)  SCENERIO ANALYSIS

When working to build a Great Business case, research must be conducted and reasonable, educated assumption must be defined in order to clearly present the anticipated project benefits. While some factual, real data may be known. This might include number of employees, allowances must be made for variation or uncertainty.

This awareness of not only the “most likely” results but also the “best case” and “worst case” scenarios is a crucial element in creating a compelling business case.

(2)  CLEARLY DEFINE “CAUSE” AND EFFECT.

Failure to clearly link and explain how each feature or characteristic of the project contributes to a specific operational effect can potentially sabotage what otherwise could have been a great business case. If the business case reviewer, such as the CEO questions the purpose or inclusion of a particular benefit, the business case builder must be able to justify its cause and efforts and how it affects the company’s bottom line.

(3)  KEY PERFORMANCE INDEX (KPI).

The KPI is that factor in any given benefit, whose data ultimately demonstrates the resultant impact from the potential project. There are several factors that are used to construct a specific benefit formula; If not clearly defined, the KPI can quickly become lost in the assumptions used in the formula if any one benefit.

Identifying which factor measures the success of a particular benefit is crucial to the understanding and acceptance of a business case. Without clearly defined KPIs, executives will not have the ability to determine the validity of a specific benefit, or measure the progress of an implemented initiative.

(4)  ASSES THE ECONOMIC RISK OF NO INVESTMENT

Often overlooked, but just as critical is the “Risk of No Investment outcome. If the investment is not made what could happen to company’s bottom line? Could the company case customers? Or market share? Could some future costs be avoided if the investment is made today?

To clearly explain all the potential risks associated with any given project, a great business case must not only include the possible risks of moving forward, but must also consider the economic risks of not investing.

(5)  ALIGNMENT WITH COMPANY’S STRATEGIC GOALS.

A good business case provides a justification of a particular initiative or solution, often resulting in a positive ROI. A project with a high ROI is great, but it is not a complete business case justification if the proposed solution does not align with the company’s strategic goals. In order for a potential project to be deemed “vicible” by a decision-making executive, it must be aligned with the company’s strategic business and technological goals.

 

SUMMARY

At the end of this lesson, we have been able to discover that:

  • Oracle software operates on “pay as you use” basis.
  • An organization must calculate their Return on Investment before they go for any software implementation project.
  • Some of the questions that organization needs to ask themselves when considering investment in CRM on Demand: What business goal will the application address? How will the result be measured? What improvement are you expecting among others.
  • You have to ask you vendor: how they will provide support, their experience about the software, how does the application help to track business results.
  • Elements of a good business case includes: Scenario Analysis, clearly defined cause and effect, key performance indicator, know the economic risk of not investing, and alignment with the organization’s strategic objective.

BUSINESS CASE FOR CRM

Objectives of this study

At the end of this study, readers should be able to:

  • Define Business case.
  • Explain how CRM business case can be developed
  • Explain how to create a business case for CRM
  • Explain how to build a business case.

DEFINITION

When we talk about business case, we are talking about a convincing document that you as the initiator of CRM in an organization prepared in order to get the approval of top management for a CRM project. This will also help you as the initiator to get the necessary funds that will be required in order to implement a successful CRM project.

DEVELOPMENT

In developing a business case for CRM, there are some things that you as the initiator of the project should put at the back of your mind. First your proposal/case should spelt out what the organization stands to benefit if they go the way of CRM. You must be able to prove that doing business from customers perspective is more profitable that doing business from product perspective.

You must also be able to list out tangible as well as intangible benefits brought about by the proposed CRM system.

You must specifically chart out how these benefits could be achieved. You must also calculate the Return On Investment so that top management can be sure that it is a worthy enterprise.

 

BUILDING A BUSINESS CASE

(1)     BUILDING THE TEAM

In building the team, you must prepare the team in advance before the implementation of the project will begin so as to prepare them for the challenges ahead of them. You must let them know what they are likely to face in the course of implementing the project.

You must also involve key people that will be affected by the outcome of the project. This is to prevent revolts that might, come as they may decide not to use the solution.

 

KEY PEOPLE INVOLVEMENT

The success of any IT project is largely dependent on those that are involve in the solution and those that used it after it might have been completed.

In projects, we always have an executive as the sponsor of the project. It is their support that will ensure that the CRM solution is well received by the users and become part of the organization as far as change management is concerned.

The project team should consist of the best that the organization can offer. The organization can also set up a steering committee to over see the implementation of the project.

The sponsor who is always an executive member must have the charisma to encourage stakeholders to adopt the new culture. The so called sponsor must be readily available to team, provide quick, decisive resolution to issues, active, vocal and visible supporter of the initiatives and has a realistic expectations.

More often the team constitution is skewed towards members from functional teams. IS/IT is relevant because these are the people who are responsible for the day to day functioning of the technical infrastructure. The combination of this people will help the project team to attain success.

 

REQUIREMENTS PRIORITIZATION

It is essential to set up meetings where the team can discuss the opportunities to improve the current system and have them establish the priority of some must do processes.

Since the project will affect the way things is been done in the organization, it is logical to create representative teams to compile their critical success factors as well. The organization need to rationalized the requirements and decide on which of the activities will be carried out first.

Once the organization has rationalized their requirements, priorities need to be set right, in order to arrange the requirements according to their order of importance. It can be categorized based on “must have”, great to have, not necessary e.t.c. This helps to keep the project focused on objectives.

It is also appropriate to break down the project into definite phases so that each phase has a measurable ROI to deliver. Prioritization of the requirements should be taken up keeping in mind the fact that the fast payback from the project strengthens the case for subsequent phases as well as keeps the management enthusiasm alive.

 

SUMMARY

At the end of this lesson, we have been able to discover that:

  • A business case is what you as the initiator must do in order to convince top management to support the project.
  • You have to include the best brains that the organization have. It must also include representatives from key departments in the organization.
  • The project must have a sponsor who will ensure seamless change management.
  • You must also calculate the Return on investment in order to keep hope of the top management alive.

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