It is not a good practice to include a complete post. For this post written by Mike Boysen I make an exception.
His post is good, really good.
Always great to reflect on discussions about ROI in any organization. Keep in mind what Kaplan has written about business cases in his excellent “Strategy Maps’ , written with David Norton. “None of these intangible assets has value that can be measured separately or indepedently….. Improvements in intangible assets affects financial outcomes through chains of cause and effect relationships.
Regular readers of this blog are aware of the fact that for me a business case is imperative and indicative. As an operational manager with many years working in complex environment I’m aware that because of the chain it is not possible to validate and verify a complex business case.
Anyway, Mike Boysen post is great. So enjoy Mike’s 3.000 words post!
I have never seen the ROI of CRM properly defined. Yes, that means that I have never classified it or calculated it for a client to my satisfaction. That said, I can also share with you that I am so dissatisfied with what I’ve seen over the years that I’ve decided to take myself on this journey.
Before I begin with the panel, I’d like you to know where I’ve come from. Well, I came from commercial banking and dabbled a bit while with a corporate finance boutique. Therefore, I was a believe that I could plop some inputs into a model and output a number (like ROI or NPV or IRR) that would justify an investment.
That can work pretty well when the investment is in computer technology used to consolidate operations, or real estate, or a huge piece of machinery that has definitive costs and the expected revenues can be reasonably estimated. I’ve always been into the cool financial models. But do they apply here? Simpler models that do basic ROI have problems…