Article ID Journal Published Year Pages File Type
434718 Science of Computer Programming 2006 14 Pages PDF
Abstract

A procurement decision about a CRM system is heavily influenced by the initial purchase cost rather than the effect of the operating cost and utilization over the lifetime. In this paper, we propose a Cost of Ownership (COO) model for a CRM system which takes into account not only the initial cost, but also the operation cost, and the opportunity cost due to customer mismanagement over a life-cycle. In particular, the opportunity cost due to customer mismanagement, which is related to the performance of the CRM system, is used as a key cost factor to reflect the financial impact of the system. We employ an engineering economy model to compare various systems with different life spans. A numerical example is given for comparison of the COO of alternative systems along with sensitivity analysis for an optimal procurement decision.

Related Topics
Physical Sciences and Engineering Computer Science Computational Theory and Mathematics