Information systems turn manual processes into automated processes in order to save companies time and money. However, when there's a cost for something there also needs to be a calculated return on investment before deciding to move forward. For instance, I work at a small company that distributes wire and cable products across the USA and our website started generating many new customers. We accepted the first order and thanked the customer, but didn't have a follow-up process in place and we didn't have enough staff to handle the process we thought would work. What do we do?
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We decided to look into a Customer Relationship Management system to make us more efficient instead of hiring more people to continue our manual process. First we had to weigh all of the risks such as the cost of the system, cost of updates, and training our staff on the technology. We would also have to create a new process in order to utilize all that the CRM had to offer.
Next, we had to weigh our return on investment such as time savings, employee efficiency, and the priceless marketing benefits of keeping in touch with customers. We came to the conclusion that we would have to hire five new sales people to cover the incoming leads in order to follow-up with all of the customers through our manual process. That's compared to hiring only two new sales people if we also purchased the CRM technology. Three individuals can cost up to $150,000 per year as an ongoing company expense. The implementation the CRM was only $50,000, plus roughly $10,000 in updates each year.
It was easy to determine that the CRM was a great investment that would initially save us thousands of dollars in employee wages and hundreds of thousands of dollars over the next 5-10 years if the website continues to grow. Not only that, but the CRM has triggers that automatically generate a "thank you" email and send it to the customer. The email is triggered when our accounting department completes the invoice. The CRM also has classes that break our customers into groups of more specific categories so that we can generate promotional emails and send them to groups of customers rather than sending each email individually.
Information systems are expensive at first glance, however after further investigation technology can prove to be a great investment. Companies should be careful not to use technology systems as a growth strategy because they don't generate anything "new" like website leads or marketing campaigns. Information systems save employees from having to do tedious tasks such as email confirmations. In other words, the CRM wouldn't have been worth the money if we didn't already have the new leads coming from the website because there wouldn't have been any savings to weigh against the manual process costs. As long as you don't the cart before the horse, information systems can prove to help companies save money even with a high cost to get it implemented.
Microsoft. Microsoft Dynamics CRM delivers an average ROI of 243%. Retrieved from: