I've never seen a CRM decision made solely on price, that is, that product X is chosen over product Y solely because product X is cheaper. On more than one occasion I have seen a particular tool selected even though it's slightly more expensive than the initial target budget because it has particular strong functionality that is thought to justify the additional expense. But it's rare that a tool is selected despite being considerably more expensive than the budget allows. You need to define a budget for the tool purchase and implementation as part of the requirements definition so you don't waste your time evaluating candidate tools that you can't afford. When creating the budget, be sure to consider all the costs, including:

  • The tool purchase cost. In the next chapter we'll see how to negotiate well to minimize what you have to pay. Consider costs for add-on products or underlying hardware, database management systems, etc.
  • The implementation costs. It's difficult to create a specific budget until you have chosen a tool and defined the extent of customizations and integrations required, but you'll need to take your best guess. Include compensation for the internal resources and training costs.
  • The maintenance costs. Include the vendor's support fee and any other support fees for associated hardware or software. What's the planned increase over time? Can you get guarantees on fee increases? Include your internal costs, which may include permanent staff and contractors.

One last note about the budget. Some CRM projects end up costing considerably more than either the initial target budget or the approved budget. Although an increase between the initial target and the approved budget can be justified by higher business achievements afforded through better functionality, large overspending during the implementation is always a bad thing. The goal of this tutorial is to give you practical tools to create reasonable budgets in the first place, and to keep to them throughout the implementation cycle.