CRM Business Case Template
How to build a business case to convince top management to support your CRM project
Prior to putting this CRM Business Case Template together, we took a look to see what else was freely available on the internet. We also looked back through our project archives at the business cases we’ve helped our clients to create. From this research, we’ve created a CRM Business Case Template that we feel is different – or more importantly, better – for the following 3 reasons:
- It’s practical. After reading this and downloading the template you'll have the knowledge and structure to provide a professional-looking business case for CRM.
- It passes the real-world test: The CRM Business Case Template has been used in the field by CIOs and in organisations with annual revenues of up to £100m.
- It’s a comprehensive Business Case Template: The template has pre-written phrases - you simply choose the ones you want to keep, delete those you don’t, and add your own additional details and embellishments.
Who is this template for?
This CRM Business Case Template is for you if:
- You’re a director of your business seeking to convince fellow top management of the need to invest
- You’re in an IT advisory role (IT Manager, IT Director, CTO, CIO) and have been tasked with creating a business case for CRM
- Following a suggestion from a trusted adviser, you want to make sure you get it right while avoiding risk
- You’re new in a business that doesn’t yet have CRM and you recognise the benefits that a CRM system can bring
Who is your audience?
It’s important to consider your audience – who it is you are going to present this CRM Business Case to.
Are they likely to read a 50-page document or do they expect a 5-page presentation?
Does the likely cost of the system warrant a comprehensive business case, or will a simple, outline business case do the trick?
Are you on a burning platform, e.g. the developer of the Excel spreadsheet that your business has become reliant upon is about to retire or leave the firm some other way; or is your current CRM provider being acquired, thereby risking your future support?
There are various factors that will influence what is acceptable to your audience. Regardless of your end decision, the template provided here will cover the core content required. It is in a Word document format to allow you to edit it, and if required, copy details into a PowerPoint presentation or similar instead.
What should be included in your business case?
A business case is a living document. If you don’t want to fail at the first hurdle (i.e. get the project signed off), it should contain the following elements:
Business case item
The case for change
Without CRM, growth and objectives are thwarted by inefficiency, and you know things can’t carry on as they are.
Value for money
Making sure that the chosen CRM system will deliver value for money. (See our blog article: How much does a CRM system cost?)
What is the likely CAPEX/OPEX mix? What type of contracts need to be entered into? Over what period? What are the key milestones?
Detailed analysis and funding gaps. This may include Internal Rate of Return (IRR) and Net Present Value (NPV) calculations.
How will the system be implemented? What skills and resources will be required internally? What will the reporting structure be to ensure stakeholders are informed?
Developing your Business Case
As mentioned above, a business case is a living document. You may know with a fair degree of certainly that CRM is strategically important to:
- Avoid being eclipsed by competitors
- Remove inefficiencies that are hampering growth
- Provide a platform from which the business can scale
On the other hand, initially you may not have much certainty about the ‘management case’. For example:
- What sort of skills will be needed? Will it be developers, business analysts or project managers? Who will look after the change process? How many of each discipline?
- Who are the likely stakeholders, perhaps marketing and sales directors? Do you start optimising sales first, then switch to marketing, or are operational and customer support issues more important?
Consider an Outline Business Case (OBC), where you provide detail in proportion to the level of certainty for the stage of development. As you can see in the diagram below, for an OBC there will be full details on the strategic case, but as you work through element there will be less detail. The exact numbers provide an rough guide, but each organisation and project is different as to how much is known at an early stage.
Fig 1: Outline Business Case, for initial stages when there’s uncertainty
In the instance of a full business case, you should undertake additional fact-finding and complete each of the business case elements.
Business Case Elements in more Detail
The strategic case sets out the rationale for the proposal, it makes the case for change at a strategic level. It should set out the background and explain the objectives that are to be achieved.
Does the strategic case clearly state the objectives that are to be delivered in SMART terms (Specific, Measurable, Achievable, Relevant, Time constrained)? If not, then how is the objective clearly set out so that its achievement can be monitored and measured? If it cannot be measured the proposal cannot be judged as good value for money.
As well as the main benefits, the associated risks, constraints and dependencies of each proposal should also be considered at a high level, and how they are to be managed should be outlined. Optionally, lessons learned from previous experience in this area could be briefly set out.
This section of the business case assesses the economic costs and benefits of the proposal.
A cost benefit analysis must be performed in which the economic costs (-) and benefits (+) should be calculated for each year covered by the proposal and summed up to produce a net figure for each year. Each of these annual net values can then be discounted (see the UK government Green Book for guidance) and the results are summed to give a Net Present Value (NPV). This NPV is the basis on which value for money is assessed. This analysis should be undertaken before the decision on which option to adopt is made.
In all business cases the economic case must include a sufficiently wide consideration of alternative options for achieving the desired objective. Options analysis starts from a long list of all reasonable alternatives, including a do-nothing option. Or, if doing nothing is not possible, a do-minimum option.
The shortlist should include the do nothing or the do minimum option. That helps to determine how much the cost of procuring a new CRM system are outweighed by the expected cost-savings it will provide. The economic case should show that every effort has been made to quantify all relevant costs and benefits.
Often there are genuinely unquantifiable costs and benefits associated with a proposal. CRM systems are no different. For example:
- Staff turnover can have a major cost implication that can range from 30% to 40%. Will better systems reduce staff turnover as a result of better data, less frustration and clearer expectations (e.g. sales targets, cost per lead, new customers acquired, etc.)?
- Through better and transparent customer data, the business might be more attractive to potential buyers. Might the CRM system help the business to achieve a higher sale price – if that is the objective – 5 years from now?
- A big benefit of CRM is efficiency. Sales, marketing and service can all benefit. But how important is it for the health of a stressed owner/management structure to reclaim some control and focus?
Where this is the case, unquantifiable costs should be clearly explained along with the reasons why quantification cannot reasonably be made. Aim to provide a transparent case in support of the recommended decision and reject artificially massaged numbers to achieve a predetermined result.
The commercial case is concerned with issues of commercial feasibility and sets out to answer the question, ‘Can the proposed solution be effectively delivered through a workable commercial deal (or deals)?’. The first question, therefore, is what procurement does the proposal require - is it crucial to delivery and what is the procurement strategy?
For example, will you rely on word-of-mouth to find reliable suppliers, or will you go through a formal tender process? When you evaluate vendors, consider what commercial criteria are important when you engage a delivery partner.
The procurement strategy should be clearly set out in the commercial case, and the ownership of any assets should be clearly defined, and key contractual issues identified and explained together with the proposed solution. The allocation of risk must be clearly explained, and the business case should include a risk table showing risk allocation and the steps which are being taken to mitigate risk. The commercial case should show key contractual milestones and delivery dates, and it should clearly set out the agreed accounting treatment.
The financial case is concerned with issues of affordability, and sources of budget funding. It covers the lifespan of the scheme and all attributable costs. The case needs to demonstrate that funding has been secured and that it falls within appropriate spending and settlement limits. The focus in this section of the case is on capital expenditure (CAPEX) and operational expenditure (OPEX). The cash flow (i.e. when particular items are due) should be included too. For example, implementation consultancy may be a one-off expense (CAPEX), whereas on-going support, hosting and licences may be recurring annual expenses (OPEX).
The financial case sets out to determine:
- Does it identify and fill any funding gaps?
- Does it contain provision for dealing with the financing of any time or cost overruns?
- Does it fully explain and estimate any contingent liabilities that may result from the proposal?
The management case is concerned with the deliverability of the proposal and is sometimes referred to as programme management or project management case. The management case must clearly set out management and stakeholder responsibilities, governance and reporting. The responsible owner or project sponsor should be identified.
The management case should include a delivery plan with clear milestones which relate to contractual milestones, but at a more detailed level. The management plan also applies to any programme or project(s) required by the proposal.
Some examples include:
- Identifying stakeholders, methodologies and tools to manage projects/programmes.
- Where significant change management is involved, a change management and stakeholder management plan should be included.
- A contract management plan and arrangements where contracts are required.
- A contingency plan with arrangements and plans for risk management.
Consider whether the business case has been appropriately signed off within the organisation. For example, have relevant business owners and professionals (Finance, Procurement, HR, IS, delivery professionals) approved the case?
Evaluation of the results and effects of the CRM implementation are key elements frequently overlooked. It is vital to measure Return On Investment (ROI) and to learn lessons following the completion of the project.
A business case can be a major undertaking, or not, depending on the size of the organisation and the project. We’ve set out to provide guidance, based in part on a UK government guidance document.
Your role is to create a document that clearly gives the options, quantifies the risks, and above all helps decision-makers reach a conclusion about the best solution.
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