CRM finally delivers ROI

More users could be about to buy into CRM as IDC reports improved feedback and real business benefits for such solutions.

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By  Matthew Southwell Published  February 4, 2004

Confidence in customer relationship management (CRM) applications could be on the up as tales of disappointing implementations and poor return on investment (ROI) are replaced by positive feedback and real business benefits. The latest statistics from IDC support this view, as the firm’s recent CRM ROI study reveals that successful implementations can yield returns ranging from 16% to more than 1000%. The analyst house also found that technology-related savings account for only 7% of the average return, while benefits accrued from increased productivity and business process enhancements account for 51% and 42% of the return. “The net impact on an organisation can at times be subtle and distributed throughout the enterprise," says Mary Wardley, vice president for IDC's CRM applications research. "Cost savings and productivity enhancements can be evidenced in saving a sales person twenty minutes per week in writing activity reports or answering four times the volume of web-based service requests in the same amount of time," she explains. Other key findings from the IDC study included 58% of participants experiencing payback in one year or less, 35% experienced payback between one and three years, and 8% experienced payback in three years or more. IDC also discovered that the median initial investment in a CRM application is approximately US$426,000, which includes the accumulation of all costs incurred before the CRM implementation enters production at a site.

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