When is comes to selecting the right applications for your business it is hard to understand who to listen to. Application Vendors have very compelling cases to help sell their software. Consulting companies have very compelling cases to help sell their services. Who has the case that takes into account the unique position of your business? Fortune 500 companies have Global Application departments and Enterprise Project Management organizations that are very well versed at doing project justifications.
Let’s look at the case for CRM tools as an example.
TrimmBo, a firm that builds and services automated tree and bush trimmers that work like a RoomBa vac, was thinking about implementing a CRM system to help them market and sell to commercial landscaping companies. They currently manage that work in email and excel files. Being a best in class technology firm they expect the same from the technology they buy, so they went to SalesForce for a bid on their CRM. The SalesForce account rep suggested the small business enterprise license for 10 users. Along with the $50,000 set up and data import project that comes out to an approximately $70,000 project to get the CRM up and running. With a 25% gross margin and $10M in commercial sales last year that would mean that sales to commercial teams would need to be driven up by only 300K to cover the costs. A 3% growth in sales seems like a very small number for a company that is growing 10% year over year. How do they attribute sales increases directly to the CRM? Should they now expect 13% or more in growth with the new tool? What do they do with the costs of the new service model that IT put in place to keep the CRM running? Can they capitalize any of that $70,ooo project spend in order to spread the payback period out over a longer period of time? How do they account for the ongoing 20K in licensing? Is there a cheaper CRM out there? The marketing guy heard HubSpot is free. Those and many other questions are answered when a project justification is prepared by our Virtual IT Executive.
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