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.
| Original language | English |
|---|---|
| Pages (from-to) | 68-81 |
| Number of pages | 14 |
| Journal | Science of Computer Programming |
| Volume | 60 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2006 Mar 1 |
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All Science Journal Classification (ASJC) codes
- Software
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Cost of ownership model for a CRM system. / Sohn, So Young; Lee, Ji Soo.
In: Science of Computer Programming, Vol. 60, No. 1, 01.03.2006, p. 68-81.Research output: Contribution to journal › Article
TY - JOUR
T1 - Cost of ownership model for a CRM system
AU - Sohn, So Young
AU - Lee, Ji Soo
PY - 2006/3/1
Y1 - 2006/3/1
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=30344442782&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=30344442782&partnerID=8YFLogxK
U2 - 10.1016/j.scico.2005.06.004
DO - 10.1016/j.scico.2005.06.004
M3 - Article
VL - 60
SP - 68
EP - 81
JO - Science of Computer Programming
JF - Science of Computer Programming
SN - 0167-6423
IS - 1
ER -