Sebastian Rodriguez 16-0929

Davis Humanics

PART I. Benefits according to category.

Benefit/s of a web-based CRMS to DH Account Managers:

1. Keep contact manageable despite the growing number of clients. The system will be web-based,

thus, customers that have access to the internet will have no trouble contacting DH Account

managers. There will be no geographical barriers between the account managers and their clients. If

personal – in this case I would assume this refers to face-to-face – contact is a priority, then

video-conferencing may be a solution as this allows people to see who they’re talking with and talk as

if they’re in the same room. In addition to this, a positive effect on management can be expected.

Benefit/s of a web-based CRMS to DH Operations Staff:

2. Provide a consistent format for customer input. DH operations staffs handle the inputs so I assume

that they play a major role in DH’s payroll processing service. One of the problems cited with

customer input is that they vary in format, need to be inputted into DH systems, and may need to be

processed again to conform to the standards of insurance companies. A web-based CRMS, when

designed properly, can effectively “force” users’ inputs to be submitted in a common format while still

making room for flexibility. While mail inputs may not be totally eliminated, these and perhaps a few

other exceptions may be the only ones left that need pre-processing before they can be used by DH

systems.

Benefit/ of a web-based CRMS to DH systems staff:

3. Make system maintenance a less tedious task. I am saying this now but I think this will be more

appreciated in the long run. If the director of Operation’s plan of buying a CRMS package will be

pushed through, DH systems staff will be the most involved in customizing and tailoring the package

to suit DH’s and its clients’ needs. While the systems staff may be saved from having to build an
Sebastian Rodriguez 16-0929

entire CRMS from scratch, they will still be responsible for maintaining and customizing the system.

However, this may just be less expensive than having to build from scratch.

Benefit/s of a web-based CRMS to DH Professional Staff:

4. Provide a new way of consulting with clients. DH professional staff is composed of lawyers,

actuaries, human resource professionals, etc. These are busy people, whose work demands much of

their time. With a web-based CRMS, these professional staff can instead have online consulting with

clients so that transaction is still possible even if they are on the go. Again, video-conferencing can

address the need for face-to-face interaction.

Benefit/s of a web-based CRMS to DH in general:

5. Lesser Total Cost of Ownership. From what I understand, TCO is made up of the initial cost and the

operating cost. I assume that the CRMS will integrate all of DH’s HR operations and transactions and

replace their old system. From this point, I agree with Higbee that the initial cost may be expensive,

but that is just that – the initial cost. In the long run, maintenance costs and operating costs will be

cheaper since most of the work will be done by DH IT staff. With a WBCRMS, more transactions can be

done by fewer people. Rather than increasing their man force, which can put a strain on their budget,

they can focus on expanding their technology.

6. Lesser development/maintenance cost. Compared to having to develop the system inhouse, I think

that buying a software package and hiring a team to customize it is cheaper than having to use your

own staff to build one from scratch. However, to get the most out of your expense, I think it is best if

the IT staffs are involved in the customization process of the software package along with the hired

team. This way, there will not be a need to hire from the outside just for maintenance or further

customization.

7. Improve quality of service. Of course, the very reason for the web-based CRMS proposal is DH’s

attention to the quality of service that they deliver. A lot of factors have to be considered to create the
Sebastian Rodriguez 16-0929

system that will allow DH to provide the quality service that their clients need and enjoy benefits for

itself on top of that.

8. Establish an online information exchange environment between DH, its clients, and other

people/companies. This will give DH the opportunity to expand its horizons and not limit itself within a

particular geographical area. Since transactions, marketing, advertising, consultation, and other

services will be done online, DH can continue to grow while not buckling under the weight of many

clients. Marketing and advertising can be increased greatly.

Benefit/s of a web-based CRMS to DH clients:

9. Provide an easy way of tracking the progress of their transactions. The CRMS will include

monitoring features that will aid the clients in tracking the progress of their transactions with DH. If

clients always have connection to the internet, then the web-based CRMS will prove to be more

effective since they may choose to monitor their transactions real-time.

PART II. Dollar Value Estimate of Benefits

Among the benefits I listed, I think only numbers 4, 7, and 9 are difficult to quantify, if at all. Of

course, it is still difficult to place a dollar value on the other benefits because the company’s future

profit is dependent on the decision that is still being weighed.

Benefit 1 is mostly focused on management and I believe the benefit that DH can get from possible

improved management can range from 5-15% increase in sales - that’s around an additional $100

million (based on their annual income, $2 billion) to $300 million. This estimate came from my insight

that even though a web-based CRMS can improve management, people are still involved and people

always have issues or handicaps with them. I am not saying it is a bad thing but it can still affect the

management performance of DH so we cannot expect a drastic increase in sales.

Benefit 2 is on operations, which involve machinery or equipment. There will be a considerable benefit

here since information is stored on the Internet in a web-based system, therefore reducing the cost

for storage and equipment. Accessing, retrieving, and processing data will all be done online so there

will be lesser need for paper and other output materials. The savings of the

company can range from a few hundred dollars for paper and a couple thousand of dollars more for

larger equipment.

Benefits 3, 5, 6, and 8 are more focused on the financial benefits of a web-based CRMS. 3, 5, and 6

can be thought of as “savings”, while 8 can be thought of as “sales”. Let us assume that the

vendor-consultant team bid ended at $2 million and that they can do their job in a period of 10 to 18

months (estimated from the size of DH and the number of transactions they handle). The total cost of

ownership is usually considered for three years, but this time, assuming that the vendor-consultant

team has already turned over the system to DH, maintenance cost is cheaper than the initial

implementation cost. They can save around 50% of the initial cost annually.

Competition on the Internet is tight and since benefit 8 talks about expanding DH’s horizons, some

search engine optimization (SEO) may be applied to make sure that DH reaches its target customers

and still attract some extra traffic. However, based on what I know, it can take several months or

even more than a year for a site to come up in the first three pages of the search results. It may take

this long before the site can gain traffic from non-clients or soon-to-be-clients. During this time, I

suggest that DH focus on making their old clients familiar with the system and make use of

advertising services offered in the Web to help them get more traffic into their system. From this,

their sales can increase by as much as 30-50% and their visibility on the Internet can increase by as

much as 100%, based on experience.

PART III. Memorandum

TO: DH Board of Directors

FROM: Sebastian Rodriguez

DATE: 18/03/2020

SUBJECT: Web-Based CRMS Project Evaluation Method

A tradition in DH is to evaluate capital projects, including IT projects such as this, using Return on

Investment (ROI). Based on data from the past years, DH has been growing rapidly and has currently

many divisions. In cases like this, ROI may not yield the best results because it can be calculated and

interpreted in different ways to suite the interests of a particular division and may disregard the

interests of the company as a whole. Moreover, the proposed project is expected to affect future

sales, therefore ROI may not be the best evaluation method as it is based on historic data and cannot

provide insights on how to improve business results in the future. ROI also encourages managers to

look into the short-term rather than the long-term effects, which may not be good for a growing

business like DH.

Please recall that the primary objective of this proposal is to address a foreseen problem in the quality

of our service. ROI does nothing to evaluate the design and usability of the proposal and only

evaluates things from the company’s financial perspective.

In this light, I would strongly suggest that ROI alone should not be used to evaluate this project.

Combining ROI with other evaluation methods, such as net present value (NPV) and payback period

(PP), can help us make informed, economic decisions. Evaluation should also be performed to validate

that the project conforms to design and usability guidelines and make sure that our clients also get to

enjoy their experience with us.