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y Scott Gingrich, The CRM Coach,

Having a project come in On-Budget is the holy-grail of project management, especially when it comes to CRM projects. With their 70% failure rate, CRM projects represent a significant risk to a small business' financial health and warrants more 'measure twice, cut once' consideration before beginning.

Coming in On-Budget does not mean you managed to squeeze your project into whatever arbitrary budget you came up with when you first started. It also
doesn’t mean that you started with an overly generous budget.

It does mean that you develop a budget that takes into account an analysis of 4 critical areas:

  • Payoff. You need to know exactly how your CRM system is going to generate ROI. This will help you focus your project on the right areas. By knowing how you expect payoff to be achieved, you can plan to achieve it.
  • Risk. You need to figure out where the risk is in your project because 'risk=expense'. By figuring out what can go wrong, you can take measures to minimize and contain that risk.
  • Services. Be sure to fully account for the variety of services that will be required. A few often overlooked areas that can increase your services bill significantly include: meetings, testing time, debugging time and 'while you're here...' time.
  • Technology. Choosing the wrong technology is can be a huge waste of money. From the worst case scenario of a totally failed project to having to spend extra money to make the wrong software do things it wasn't intended to do.

What makes putting together a realistic budget so difficult for small businesses is that it's not what they do and they don’t have the experience of having done several before. It’s not what they do. So, they rely on the Sellers of CRM who have their own vested interest in not scaring off their customers with numbers that are perceived to be too expensive. By putting together a realistic budget, you may very well find that the project is going to cost much more than
you were intitally prepared to spend. It's best to find this out now and before you 'sign on any dotted lines'. If you do find out the project is going to cost more, here are a few ideas of what to do:
  • Wait & Save. Perhaps you need to wait 6 months until you have a bigger budget. Use this time to get prepared for the project: learn more about the software choices, make sure you're business processes are as fine tuned as they can be, and focus on how CRM software will generate ROI.
  • Go ahead. It may be more money than you were expecting, but may still be within your budget. If you're clear on how the CRM system is going to generate ROI and you're otherwise ready, go for it!
  • Scale Down. If you have a very clear idea of how the CRM software is going to achieve ROI and you can't afford the full project, focus in a smaller area to begin with that will have a payback. Use this payback to help fund future projects. It's always a good idea to start with smaller, high-payoff projects first.
  • Find more ROI. If you have a really clear and compelling business case for how a CRM system is going to improve your bottom-line, it's much easier to find the necessary funds to implement it.
  • Double Check. Make sure you're choosing the right technology. Cheap software can often be expensive to implement. Double check to make sure you're basing your budget on the right CRM software. You may find that a software that costs more in licensing, ends up being an overall more affordable solution.

Coming in On-Budget means you started with a realistic budget. The "Insider's CRM Success System" goes into great detail on how to develop a realistic budget and provides the control forms and worksheets you'll need.


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