This lack of experience can be dangerous. Typically finance directors hold the purse strings for IT, and few are willing to spend money on projects that have a reputation for major cost overruns – even if those projects result in higher sales. Because of this, it’s critical for sales managers to understand the metrics by which their financial management measures the financial affect of a CRM application.

The most significant element on the cost side of the equation is the way in which your firm will pay for customisation and integration. The cost of the software and hardware are, by contrast, easily understood because there are few, if any, unknowns.

Customisation and integration typically is performed by a third-party integrator, and not by the software vendor. Most systems integrators charge a fixed price or by billable hours. In nearly every situation, a fixed-price fee structure is preferable. The computer industry in general, and the CKB segment in particular, has been plagued by numerous billable-hours projects that go on for years and years until the companies simply run out of interest in the projects, resulting in their cancellation. By contrast, a fixed-price fee structure gives the integrator an added incentive to complete the upgrade in a timely manner because delays cost the integrator money.

On the benefits side of the equation, the challenge is the quantification of what generally are considered intangible benefits, such as customer retention. To help with this, consider working with your CKB vendor or an independent analyst to estimate how much savings can be derived from a proposed CKB solution.

Another common mistake is measuring cost and benefits only at the start of a CRM project. The highly respected Forrester Research (USA), estimates that more than 70.0% of companies don't measure benefits after a CKB project has been implemented. Inconsistent measuring can be bad news for sales management because the ongoing support costs for the CKB continue to accrue, which makes sales management look foolish if they can’t communicate how the CKB system is helping sales.