Update 3/25

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Update 3/23 – 2

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Update 3/23 – 1

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Update 3/22

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March 20 Update

3/20 – Check out the latest on the COVID-19 situation from the road with Jack O’Malley. Click on the image below to view the video.

Modlovers

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Pdf File Reader

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Payback automation, does your CRM pay off?

How do you know if a CRM system is worth the investment? Is it even worth investing in business automation? How much should the program cost?

In business there is no such thing as expensive or not, there is a concept of payback or not, and for how long. For automation systems, too, there is a mechanism to calculate whether or not the implementation will pay off, such as a CRM system. And don`t forget that you can always turn to moving company crm software development.

phan-mem-crm

General principle and rule

When you hire an employee, you understand what he has to do, why you hire him. The employee will perform certain functions that will generate income for the company. You understand what these functions are and what results you expect. This is logical and correct, everyone does it. Except that with information systems, it is often the other way around. First one chooses an information system based on its name, or, even worse, its price, and then begins the study of what it can do and how to apply it.

Often we are approached with the question, “how much does a CRM cost?” Why is this question wrong? Because the questioner has no understanding of what it should be except for a list of clients, and we have no understanding of what business processes to automate, respectively, and the amount of this work is not clear. Therefore, the standard answer is “from 200 thousand rubles, this amount includes the creation and deployment of the information system with sections of users, roles, and some customers section. And then you need to design and calculate.

Why is this question absurd and uninformative for the client? Because using a CRM system in order to enter and store clients in it as a list is a useless thing from a business point of view. It’s not a solution to a business problem or a problem. But for example a problem formulated as “we must not lose leads, so they all automatically fall into the CRM” – already sensible wording, feasible. And the result in the form of increased orders is good for business.

But this is all just lyrics. Let’s get to the numbers.

Evaluation Indicators

The general principle of evaluation is to convert the time that the automation system saves in work from the time that the employee works without using it. Of course, indirect factors also have an economic effect, such as: 

  • Improved quality for customers, which attracts new ones; 
  • Reduced waiting times; 
  • increased speed of service or receipt of a product;
  • making you more attractive as a company to customers and new employees;
  • much more.

There is also a deferred economic benefit, because the formula uses the number of employees and their salaries at the moment. And what will the numbers be a year from now? The benefit increases proportionally.

So, the formula involves the time to perform a business task before using the automation system and after. The number of tasks performed by employees per month and the salary of these employees.

There is another point, information system, as a rule, is not used to automate only one task. It is a platform for solving a multitude of business tasks, and it is worth taking this into account in the formula. For example, the CRM system itself costs 200 thousand rubles, the section for generating commercial offers with invoices and sending them to the client costs 80 thousand. The result of the formula calculation for 280 thousand and 80 thousand will be very different. In this case, you should start from a set of solved business problems and calculate the economic effect together for all tasks or allocate the cost of the platform as a total investment in the automation of the company, and then develop modules that pay off in a month.

Calculation formula

(t1 – t2)/60*(n*e)/160*a

t1 – time consumption for execution of a task before automation, in minutes

t2 – time consumption for execution of a task after automation, in minutes

n – number of tasks per employee per month

a – average monthly salary of an employee

e – number of employees

60 – minutes per hour

160 – working hours in a month

Now let’s try to apply it in practice on the basis of the CP generation module for the CRM system. Let’s imagine that the company has 10 managers, who submit 10 proposals per day. 22 working days in a month, 220 commercial proposals per manager per month.

In order to write a letter with an offer, to request and receive an invoice, calculate the total amount, make up the control itself, for example, in Excel, as most people do, specify the remains in the warehouse, the manager needs 20 minutes.

When using a CRM-system developed for a client in the order card he immediately sees the items that are in stock (regular updates from 1C), can add to the order, adjust the cost of both one item and recalculate the entire order by making a discount, and then press the button send. The system takes the goods and costs from the order, creates a branded PDF, generates an invoice and sends it to the client via the linked mail. This takes 1 minute.

The further away, the cheaper

Now let’s imagine from the above example what else was added to the system:

  • automatic reserve when ordering, so that other managers can see not just the remains in stock, but also how many of them are in their colleagues’ orders;
  • how much is the approximate delivery time for a given supplier;
  • forming an order to a supplier with an invoice request;
  • automatic parsing of suppliers’ price lists and the logic of added value;
  • managing the cost of goods centrally, through indicators and percentages of markup on several factors, centralized price management;
  • possibility to adjust the cost of all the items in the order to the total cost of the order with one button (if the company has such a task).
  • much more.

And so with the above, which is the development of their own CRM in the form of modifications relatively little, individual systems reveal their true potential in matters of payback and cost-effectiveness.

Who knows how to count money?

Why do large companies use mostly custom development? Not because it is suitable for large companies, and the destiny of small companies is subscription systems and template solutions. It is because large companies know how to count their money. That is why they became big. They don’t invest in having the same list of deals as in notepad, but with different colored buttons, they invest in optimizing solutions for business problems.