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Let's determine a true cost of CRM

When we are talking about True cost, we mean that usually there are some sources of cost beyond payment for a license. In this article, we would like to review what costs usually are not so obvious in CRM payment
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Description

Total cost of ownership

Total Cost of Ownership - it is the sum of all costs and expenses related to buying, implementing, operating, and managing your CRM (either directly or indirectly).

Why is TCO an important factor to consider?

TCO is important because it determines your ROI. A TCO analysis can reveal that CRM actually costs a business upwards of 5-8x the original purchase price. Understanding how much your CRM is going to cost you over time helps you make better buying decisions when deciding which software provides the best possible ROI.

What factors into TCO?

Acquisition costs

  • Software upfront/subscription cost. Cost of the software whether a one-time, monthly, or yearly recurring fee as well as the cost of user licenses.
  • Implementation/onboarding cost. Cost of setting up the new system for your business and onboarding users.
  • Data migration cost. Charges to migrate data into your new software.
  • Integration cost. Cost to integrate external systems into your new software.
  • External system interface cost. The cost to integrate your new software into external systems so they talk to each other.

 

Operating costs

  • Cost of additional contacts or user licenses. The cost to add new users or additional contact records as your business expands.
  • Training cost. Cost of external consultants, contractors, or firms to train employees to use the CRM.
  • Software maintenance cost. Cost of external consultants, contractors, or firms to provide software upgrades, updates, patches or bug fixes needed to improve functionality and keep the software in working order.
  • Customer support cost. The cost of getting technical product support from external consultants, contractors, and/or the software vendor itself.

 

 Personnel costs

  • Number of personnel. The number of personnel (i.e., part-time, full-time, agency/contractor) needed to manage your CRM.
  • Cost per personnel. The average cost paid per personnel.
  • Total cost of personnel. The total amount spent per year on personnel (i.e., part-time, full-time, agency/contractor) hired/employed to manage the software.

 

 

Serhii Taboranskiy

Serhii Taboranskiy

BDO

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