Description of the ROI Calculator

The value of a given ROI calculator is directly related to the role and importance that is placed by the organization on the justification process. If the ROI calculator is merely a gate that must be opened to move ahead to implementation, then any tool that provides support for acceptable numbers will suffice. In today’s market, there are many free calculators that will accomplish this task.

So why should an organization pay for a ROI calculator when such tools are available for gratis? If the organization wishes to establish accountability for performance and truly manage the CRM initiative (i.e. achieve success), then the ROI needs to be a roadmap as opposed to a gate. This implies capturing assumptions, responsibilities, timing, cause/effect relationships, metrics, and goals. This ROI tool provides these capabilities and organizes this information into one cohesive format that creates a template for capturing this detail as well as a mechanism for automating the calculations.

The challenge for anyone building a ROI calculator is the level of detail for the input data. Most calculators are based on summary data and often have built in assumptions regarding cost and/or benefits that are not obvious to the user; the result is a ticket to implementation without much insight as to what constitutes success. This often represents a ticket to being flattened on the highway of CRM success.

The GSP Associates ROI calculator provides the capability to calculate, pay back, net present value, and internal rate of return on a before and after tax basis. The model is built on an Excel Spreadsheet platform and is accompanied with a comprehensive workbook that explains ROI concepts as well as the calculations. The ROI tool is organized into a series of workbook tabs that allow the user to document assumptions and details at an actionable level. However, the model allows the user to define the right level of detail. A graphical description of the model is provided below:

The Profile provides space to describe roles, phases, and the timeframe for the ROI analysis. The Baseline and Improvement worksheets document assumptions at a summary level and represent where most ROI calculators stop. The Depreciation worksheets are optional, they enable the user to do the calculations on an after tax basis. The ROI worksheet calculates pay back, net present value (NPV), and internal rate of return (IRR) on a before and after tax basis. Sensitivity analysis allows the user to study the impact of changes in assumptions relative to timing and/or level of cost/benefits without re-entering data into the Baseline and Improvement worksheets.

The remainder of the worksheets allow the user to increase the level of detail regarding documentation, forecasts, success metrics, and goal setting. There are four levels of detail regarding revenue assumptions. There is a worksheet for documenting productivity assumptions and a separate worksheet for productivity at the process level. Lastly, there is a worksheet for documenting the budget estimates for implementation.

The worksheets form the basis for the appendix detail for a standard business case submission for most organizations. Thus, it is more than simply a calculator; it is a workbook for organizing your documentation for approval submission.

The cost of the ROI calculator and instruction workbook is $200 (US Currency). The files will be sent to you via e-mail by using the link provided below. Hard copy of the workbook plus a CD with the calculator can be ordered at a cost of $300.

$200.00 Emailed workbook and ROI calculator
$300.00 Hard copy workbook and ROI calculator on CD
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