DEVELOPING A PERSUASIVE BUSINESS CASE FOR CRM Glenda Parker
CONTENTS INTRODUCTION 2 1. HAVE AN EXECUTIVE SUMMARY (BUT WRITE IT LAST) 3 2. CLEARLY OUTLINE THE PROJECT PURPOSE 3 3. IDENTIFY ALL KEY STAKEHOLDERS 3 4. HIGHLIGHT CRITICAL SUCCESS FACTORS 3 5. IDENTIFY AND PROPOSE SUCCESS CRITERIA 3 6. LIST ASSUMPTIONS 4 7. PROVIDE ALL FEASIBLE OPTIONS TO APPROACH THE PROJECT 4 8. QUALIFY THE BENEFITS 4 9. IDENTIFY ALL RESOURCES REQUIRED 4 10. PROJECT GOVERNANCE 5 11. ASSESS THE RISKS AND CONTINGENCY PLANS 5 12. IDENTIFY ALL COSTS 5 13. HAVE REALISTIC TIMESCALES 6 14. ALIGN OUTCOMES AND RETURN ON INVESTMENT (ROI) DIRECTLY TO YOUR ORGANISATIONAL OBJECTIVES 6 15. MAKE A STRONG RECOMMENDATION 6 SUMMARY 7 2013 Hart Square eguide Series London Melbourne 1
INTRODUCTION The aim of this guide is to help you to take a structured approach and analysis of your need for CRM and build a strong business case. The result? Hopefully a robust and considered justification of the investment required for your CRM initiative that will satisfy your senior management team, your key stakeholders and your Board. CRM is a business strategy that incorporates business processes, people, culture and technology. Therefore, every CRM initiative should start with a strong business case that takes all of these elements into consideration. Developing the business case is not easy, but without one, you may not get the buy-in and support of the rest of your organisation, nor the right level of investment to make it successful. A good business case will demonstrate how the proposed system will support the aims and objectives of your organisation. A bad business case may get approved, but may never have proper buy-in from all the key stakeholders. Worst still, it may never deliver the benefits and opportunities set out in it. Because you need buy-in from the top, if this project is aligned to your organisational goals and objectives, you are more likely to get it approved and supported and the greater your chances of success! 2013 Hart Square London Melbourne 2
1. Have an Executive Summary (but write it last) Clearly summarise what pain points or opportunities this CRM business case will address. Include: How the CRM system will support your organisation s overall strategies The feasible alternatives you have explored and the best option you have identified The benefits, costs, resources The impact of risk Your recommendations 2. Clearly outline the project purpose Why do you need a CRM system? Document how this project directly relates to your organisational goals and objectives. Identify the opportunities a CRM system will provide your organisation and identify current problems or issues that it will address. The importance of tying your CRM initiatives to your organisational strategies cannot be stressed enough. There is plenty of evidence that proves that this connection will increase your chances of management buy-in and realisation of the benefits. Take into account things like revenue growth, cost savings, staff productivity, improved member engagement, increased member satisfaction, higher member recruitment and retention, improved marketing and better management reporting. It s also a good idea to outline what is and isn t in scope for this project. 3. Identify all key Stakeholders Consider which departments and which stakeholders both internal and external to your organisation will be involved and affected by the project and make sure you list them all. 4. Highlight Critical Success Factors What essential factors or activities are required to ensure this project successful? What will make or break the success of this project, hence the word critical? Examples include management buy-in, adequate budget, staff time and resources, relevant skillsets. These factors must be given attention and be continually monitored throughout the project. 5. Identify and Propose Success Criteria Success criteria should not be confused with critical success factors. Success criteria are outcomes of the project that are required to consider the project a success. You should propose the decision-making criteria that you believe your SMT should consider when making their decision. Some examples include revenue, cost savings, time to 2013 Hart Square London Melbourne 3
deploy, integration with existing systems, staff productivity, staff usage, user adoption, improved data quality. Success criteria may be quantified by some key performance indicators (KPIs), so include these if you can! 6. List Assumptions List all the assumptions you made when developing the business case. Of course these will be individual to your organisation, but may include things like availability of internal resources, costs, time to deliver and deploy. 7. Provide all feasible options to approach the project Outline the various options being considered for delivering the project. It will demonstrate that you have carried out your due diligence by considering other options and that your recommendations have been evaluated against other viable options. It also means that your SMT have other feasible options should they disagree with your recommendation. And one word of advice, always include do nothing as an option. It s obviously not your recommendation, but it is an option that should be considered when justifying the costs. 8. Qualify the benefits This is one of the most important sections of your business case and needs to be articulated clearly. What are the tangible and intangible benefits of your CRM initiative (sometimes called hard and soft or quantitative and qualitative benefits)? Some example of hard benefits may include higher member retention, increase in member recruitment, cost savings, ability to automate manual tasks, ability to target new members, ability to cross-sell and upsell services, reducing number of complaints. Soft benefits may include improved member loyalty, improved member engagement, staff motivation, member satisfaction, better management information Also consider this as the costs of your system may be passed onto your members, what are the benefits for them? For example, improved response time to enquiries, more responsive support service, easier to do business with. 9. Identify all Resources Required What resources are required? This should include internal as well as external resources. Do you have the experience and skillset in-house to deliver this project? If so, what time commitment is required from your staff? How will this impact their day to day responsibilities? Will their duties be back-filled? Will other responsibilities or projects take priority over this project and ultimately cause time delays? If you decide that you don t have the skillset required, ensure you provide realistic costs to get in external consultants to assist you. Furthermore, ensure those consultants have the relevant experience and skillsets. 2013 Hart Square London Melbourne 4
10. Project Governance It is essential that the governance for the project is documented. Who owns the project? Who is the project sponsor? Who will make up the project team and be the overall project manager? Who will be responsible for making decisions? Will the right people be given the authority to effectively delegate tasks to other members of staff? Finally, who will be responsible for ensuring your CRM system will be embedded into your business as usual activities after it is implemented? Something worth remembering - often, the team that prepares the business case is different to the team that delivers the project. There is no clear handover of the business case to the delivery team and often they don t even have access to it, which means the knowledge of the business case is limited to the SMT and Board who approved it. The result? Very little visibility of the business case going forward. 11. Assess the risks and contingency plans Consider how to do your homework first to minimise risk. Outline ways to mitigate them that is, identify each risk, its likelihood, the impact and the action to mitigate it. Common risks include lack of user adoption, the project running over time or over budget, lack of senior management buy-in, the benefits are not realised, resource availability, how the system will be embedded into your business as usual activities Risk management has to be ongoing and contingency plans have to be in place. Therefore, ensure you continually monitor them closely and review them throughout the duration of the project. 12. Identify all Costs Do you have everything you need to be able to estimate the total cost of procurement, implementation, ownership, capital & revenue of the project? Many CRM projects aren t successful due to inadequate funding. In some cases, the under-funding results from poor estimates of the costs in the business case. In addition to that, significant activities like business process review and change management are often overlooked and therefore not included in the project costs. Some projects run out of investment because of problems encountered along the way, but either way, inadequate funding spells disaster for CRM projects. 2013 Hart Square London Melbourne 5
13. Have realistic Timescales Elapsed time from business case creation to budgetary approval to vendor selection to project kick-off to going live with the system can run into months and even years. In the meantime, requirements could change, momentum is lost and objectives and drivers of the business case are seldom re-visited. Therefore, establish a realistic timetable and project plan. That s not to say that you will have a project plan for the implementation of your system, but if you have a plan of action to kick the project off once the business case has been approved, then that will maintain the momentum. A more detailed implementation plan can follow later. 14. Align outcomes and return on investment (ROI) directly to your organisational objectives Calculating benefits from CRM systems is one of the hardest tasks, but ROI is important to convince your key stakeholders, obtain budget and obtain resources. There are several challenges you face: There is seldom any baseline data of current performance prior to the use of the system, making before and after comparisons almost impossible There are too many other independent variables It is necessary to estimate the change between how you do things now and how they are planned to be done in the future. Many benefits are soft or intangible and hard to quantify. Therefore, showing how the system will support your organisational strategies is difficult. However, if you do your job well, ROI will demonstrate and build support for the changes needed for CRM initiatives to succeed. The questions most senior managers ask are will the system add value and what s in it for me? In order to answer their questions, you ll need to outline the costs and benefits of your proposed initiative. 15. Make a strong Recommendation Now that you ve done the leg work, you can state your recommendation and action plan for the approach you believe is best based on the evidence you ve obtained. 2013 Hart Square London Melbourne 6
Summary Building a compelling business case for CRM is not easy. However, done well, the rewards can be immense and will increase your chance of success. It will demonstrate that you ve done your homework so to speak, weighed up the pros and cons, outlined the costs and benefits and you re your recommendation is thought through and considered. To ensure maximum buy-in from the top, align the project to your organisation s strategic goals and objectives. Now you re ready to go use this briefing to make a convincing case for your strategic CRM initiative or download the Hart Square CRM Business Case Template to help you get started. Hart Square CRM Business Case Template For more information on CRM in the Not For Profit sector please visit www.hartsquare.co.uk. 2013 Hart Square London Melbourne 7