EVALUATING THE LONG-TERM BENEFIT OF CRM-SYSTEMS: A COST-ORIENTED APPROACH

Abstract

Since the late 1990s Customer Relationship Management (CRM) has become a buzzword especially among business practitioners and consultants. Companies have invested or are planning to invest huge amounts to implement CRM strategies, tools and infrastructure in order to win the battle in the increasingly competitive economy. However, many executives are struggling to determine how their enterprises will balance the business value of CRM against its costs to determine CRM return on investment. Our model presented in this paper allows an adequate feasible, theoretically established prospective evaluation for the contribution of a CRM-investment to the value of the firm under cost aspects. The premise for the application of this model is that strategic concepts, a fully developed cost accounting system as well as information on the part of the market are available. However, at the present in companies it is still not common to use such integrated and dynamic models. But an essential barrier of the implementation is the mindset of the management, which is stamped by conventions like e.g. orientation on financial statements or pursuit of partial orientation.