Roi for a Customer Relationship Management Initiative at Gst

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WANGUI MUTHAKA CASE ANALYSIS 2 “ROI for a Customer Relationship Management Initiative at GST” EBTM 740 Tuesday March, 10th 2015 This case attempts to assess Teradata, a data warehouse technology provider, proposed data mart consolidation program for GST which would improve the effectiveness of the marketing programs and also increase the retention of the quality customers. In addition to that, the company could also analyze the trends of different customer, changes in their tastes and also launch new policies regarding to the needs of the customers. As a result, this would increase the profits of the company and hence, its market share significantly. The CFO of GST, Mark Johnson and Vice President of marketing, Erica Kolks are concerned regarding the profitability of the proposed program. The management of the company has decided to introduce changes to the business processes. The business process of the company would be enhanced through the use of latest technology. The goal of the management is to increase the sales revenue for the company by focusing more on the customer relationship management initiatives. Furthermore, the company also wants to analyze the analytical customer relationship management program. However, the final decision for the implementation of this analytical CRM project depends on the return on investment and the adequate payback period. The total cash outflow investment required to initiate the proposed acquisition program is $5 million (Table 1). GST would require an investment in hardware for an amount of $1.5 million and another initial investment would be for the software for Teradata’s CRM solution of $2.5 million. The consulting cost of the project would be $1 million and would also be paid at the start of the project. The most significant cash flow is the revenue that is being derived from the customers. Moreover, the
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