CRM Made Just for A&E Projects

Posted by Deltek on January 21, 2015


CRM Made Just for Projects

Customer relationship management, or CRM, is nothing new, but not everyone is familiar with project-based CRM. What makes project-based CRM different from generic CRM? Project-based CRM tracks different information and gives visibility to the type of work coming down the line and the potential resources that may be needed. Here we examine the attributes of project-based CRM and illustrate how it helps your project-based organization thrive.

Knowing the Problems with Regular CRM

Most CRM tools are designed for businesses that sell products to help these companies forecast demand and serve their customers well. It’s simple enough to determine the value of a potential sale — you just figure out how much of the product the customer wants to buy and then multiply price by quantity. Total up all the potential sales and you have your revenue forecast. Total up the inventory you potentially might sell and you have a forecast of the products that will be in demand.

This concept doesn’t work for project-based businesses because the key item often needed for a potential project is labor. As you’re planning for a project, you need to know what resources you’ll need and what those resources cost so you can prepare a cost estimate that’s both competitive in the market and profitable for your business. If you’re bidding on a job for $10,000 and it’ll take four people two weeks to complete, is it profitable for your business to pursue this?

Hearing Opportunity Knock

Although general CRM is designed to build estimates and quotes by identifying the value of an opportunity based on product items, a project-based CRM system is designed to value the opportunity based on resources, products, expenses, and, if you need them, subcontractors. If you take the four-person example mentioned in the previous section, you can plug in the information as shown in the table below.

axium table

This is easy, but what you really need to know is what the labor is going to cost your business, so you can add in a profit margin. A project-based CRM system has the ability to plug in the costs of your labor resources and determine what you will charge per hour. It looks like the table below.

axium table

Now you can make a solid decision about whether pursuing this $10,000 opportunity will be good for the business. Also, by tracking these opportunities, you can see how much work you’re pursuing and evaluate whether you have enough work to grow the business, when this work is expected to come in, and how long it will last.

The above article is an excerpt from the Deltek’s Special Edition “Project-Based ERP for Dummies”. To download the entire book click here.