CRM projects as a source of competitive advantage مشاريع إدارة عالقات العمالء كمصدر لكسب ميزة التنافسية. By Saed Shaar Student ID number

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1 CRM projects as a source of competitive advantage مشاريع إدارة عالقات العمالء كمصدر لكسب ميزة التنافسية By Saed Shaar Student ID number Dissertation submitted in partial fulfilment of the requirements for the degree of MSc in Project Management Faculty of Engineering & Information Technology Dissertation Supervisor Dr. Paul Gardiner March 2015

2 DISSERTATION RELEASE FORM Student Name Student ID Programme Date Saed Shaar MSc in Project Management 20 th Oct 2015 Title CRM projects as a source of competitive advantage I warrant that the content of this dissertation is the direct result of my own work and that any use made in it of published or unpublished copyright material falls within the limits permitted by international copyright conventions. I understand that one copy of my dissertation will be deposited in the University Library for permanent retention. I hereby agree that the material mentioned above for which I am author and copyright holder may be copied and distributed by The British University in Dubai for the purposes of research, private study or education and that The British University in Dubai may recover from purchasers the costs incurred in such copying and distribution, where appropriate. Electronic Submission Copyright Statement Please choose one of the following two licenses and check appropriate box. I grant The British University in Dubai the non-exclusive right to reproduce and/or distribute my dissertation worldwide including the users of the repository, in any format or medium, for noncommercial, research, educational and related academic purposes only. Public access to my dissertation in the Repository shall become effective: Immediately 24 months after my submission 12 months after my submission 48 months after my submission I grant The British University in Dubai the non-exclusive right to reproduce and/or distribute my dissertation to students, faculty, staff and walk-in users of BUiD Library, in any format or medium, for non-commercial, research, educational and related academic purposes only. Signature II

3 Abstract Customer relationship management (CRM) appears to be gaining significant importance as businesses continually seek for efficient ways to manage their relationship with customers. In the light of this, this research had a core objective of ascertaining how CRM projects serve as a source for businesses to gain competitive advantage. In arriving at this core research objective, pertinent and preliminary research objectives had to be achieved. These research objectives focused on the reasons behind the success and failure of CRM projects. The researcher utilised interviews and questionnaires to gain primary data from respondents. A mixed method research was adopted in presenting and analysing data. The thematic analytical method was used to analyse the qualitative elements of the research while charts and the Pearson s correlation coefficient analysis, was used to establish a strong relationship between CRM projects and gaining competitive advantage. The project ended with proposing an area for further research, around customer centricity and CRM. ملخص في االونة االخيرة بدأت أنظمة ادارة عالقات العمالء تأخذ إهتمام كبير بخاصة أن الشركات تسعى دائما الى ايجاد أفضل الطرق الدارة عالقاتها مع عمالئها بطريقة فع الة. وعلى ضوء ذلك هذا البحث يقوم بدراسة مفصلة عن كيفية استخدام أنظمة ادارة عالقات العمالء كمصدر لكسب ميزة التنافسية في الشركات. وبهدف الوصول الى هذا الهدف الرئيسي للبحث فقد كان من الضروري الوصول الى عدة أهداف أخرى ذات عالقة. هذه االهداف ركزت على االسباب المؤدية الى نجاح أو فشل مشاريع تطبيق إدارة عالقات العمالء في الشركات. حيث قد تم استخدام عدة وسائل بحث منها المقابالت الشخصية واالستبيانات االلكترونية للحصول على المعلومات االساسىية للبحث من المشاركين. واستخدام عدة طرق بحث لتحليل وعرض النتائج. ولتحليل العناصر النوعية للبحث فقد تم استخدام المنهج التحليلي الموضوعي وقد تم استخدام الرسوم البيانية ومعامل االرتباط بيرسون اليجاد قوة العالقة بين مشاريع ادارة عالقات العمالء وكسب الميزة التنافسية. وبنهاية البحث تم طرح مجال آخر لمزيد من البحوث حول مركزية العميل وأنظمة إدارة عالقات العمالء. III

4 Table of content[ba1] Abstract... II III...ملخص List of illustration... VII List of tables... VIII 1.0 INTRODUCTION Background of Research Aims and Objectives Identification of the Problem Research Questions Significance of Study Research Outlay LITERATURE REVIEW Origin and Evolution of CRM What is CRM? Types of CRM Span of CRM functionalities in business/features/benefits of CRM CRM in Marketing CRM in Customer Service CRM in Sales CRM in Field Service IT components of CRM Data repository Application Planning your CRM Program Implementation of CRM Five phases of CRM implementation Social-technical conceptual framework Two-step CRM implementation process The typology of CRM implementation strategies Reasons for CRM failure Implementing CRM before creating a customer strategy IV

5 2.7.2 Implementing CRM before your organisation is customer ready More technology is not always beneficial Stalking and not wooing customers Lack of communication CRM success reasons The essence of CRM in finance, government and telecommunication sectors CRM in the financial sectors CRM in government or public sector CRM in telecommunication CRM as a source for competitive advantage Porter s five forces of competition: Applying Porter s five forces of competition to CRM CRM as a source for competitive advantage RESEARCH DESIGN AND METHODOLOGY THE PURPOSE OF RESEARCH CLASSIFICATION Exploratory research Descriptive research Explanatory research Data Collection Method Primary Research Interviews The interview and questionnaire guide Sampling Procedures Sampling Method for respondents Sampling Size Limitations of Study Reliability and Validity of Research RESULTS AND DATA ANALYSIS Quantitative Analysis of the questionnaire Qualitative presentation and analysis of data from interviews Qualitative data analysis of the Interviews Using the findings and data analysis to answer the research questions Research CRM Customer-Driven Framework CONCLUSION AND RECOMMENDATION V

6 5.1 Reminder of the research context Conclusion Recommendations Area for further research Appendix A References VI

7 List of illustration Figure 4: Description of CRM Figure 5: Role of CRM Figure 6: Impediments to CRM adoption Figure 7: Primary reason for CRM failure Figure 8: Ways to overcoming CRM challenges Figure 9: Characteristic of a successful CRM implementation Figure 10: Successful implementation of CRM as a source for competitive advantage Figure 11: Scattered chart for correlation analysis Figure 12: The customer-driven framework of CRM (Source: Researcher s adoption) VII

8 List of tables Table 1: The history of CRM... 6 Table 2: Evaluating the factors of CRM success Table 3: Respondents and their respective sectors Table 4: Relationship between respondents and CRM Table 5: Length of time respondents have been associated with CRM Table 6: Description of CRM Table 7: Role of CRM Table 8: Impediments to CRM adoption Table 9: Primary reason for CRM failure Table 10: Ways to overcoming CRM challenges Table 11: Characteristic of successful CRM implementation Table 12: CRM implementation as a source for competitive advantage Table 13: Data themes generated from the interviews Table 14: Variables for Pearson s correlation analysis VIII

9 1.0 INTRODUCTION 1.1 BACKGROUND OF RESEARCH Customer relationship management (CRM) systems are at the core of the architecture of telecommunication, financial and government organisations- due to their strategic function of maintaining customer relationships. Katz (2008) believes the importance of these applications but is concerned about the failure rates of its implementation within the telecom and other sectors. He believes that the growing complexities within the business has made the successful implementation of CRM projects very difficult- as its deployment, operation and adoption is attributed with so much risks. These systems installation in some cases involves a multimillion dollar investment within a complex business environment. According to Katz (2008) the failure of CRM projects within the telecom and other sectors could be defined in two perspectives: the outright cancellation or decommissioning of the project and secondly, it could be that of a subtle failure, which involves a scenario where the project is successfully implemented but after sustaining a massive financial and project schedule overrun. Amidst the abovementioned challenges, Reichheild and Schefter (2000) indicated the importance of CRM systems- in increasing customer retention rate of 5%, which further impacts on a 25% to 95% increase in business profits. They further added that, customer retention is important to increasing profits. The article also stressed the point that, the main reason for customer departure to the competition is due to poor service. Mohammed (2013), states that CRM goes beyond the parameters of improving customer service- as it encompasses all activities geared at improving revenue. He further highlighted the transition from a more complex and expensive platform known as Enterprise resource planning solutions (ERP), which were mainly about the bottom line- limited in functionality and scope- leading to unfulfilled business objectives. He believes the limitations of the ERP system has led to the emergence of CRM platforms- enabling the ease and speed of data flow within an organization- mostly the entire organization. To this end, Kumar and Reinartz (2005) believe that adopting and implementing the right CRM platform could lead to higher sales, happier customers and a much enhanced bottom-line. Mohammed (2013) finally attested to the positive impact of CRM platforms, as corporation s report of increased profits due to successful CRM implementation, within a range of about 25% to 95%. These improved results 1

10 are as a result of less wasted time, better organized schedules and effective data flows from every division of the company. Why the positive effect of a successful implementation of CRM projects might sound golden, Myron (2013) captured the thoughts of Gartner, which stated that more than 60% of companies that have implemented CRM did not have an agreed upon aspirations or goals for the project prior to the installation. This has somewhat led to the failure or collapse of some CRM projects as a study carried out by Merkle (2013), indicated a high failure rate of 63%- with 53% of this failure attributed to the organizations failure to own the customer insight. It is to this regard, that this dissertation seeks to discover the reasons as to why CRM projects fail. Secondly, how the findings could be helpful to enable companies within the telecom, financial and government sector, successfully implement CRM projects to gain competitive advantage. 1.2 AIMS AND OBJECTIVES The core aim of this project is to investigate the factors that are responsible for the failures in CRM project implementation. With primary focus on companies within the financial, government and telecom sectors. These findings will be great in helping to forward recommendations that would be instrumental in assisting with the successful implementation of CRM projects to gain competitive advantage. The research aims and objectives are as follows: To evaluate the essence of CRM for businesses within the government, Telecom and financial sectors To discover the reasons behind the high failure rates of CRM projects To ascertain the factors that are responsible for successful CRM completion To analyse how successfully completed CRM projects could serve as a source of competitive advantage. 1.3 IDENTIFICATION OF THE PROBLEM Light (2001) argued that, there is little or limited academic work focused on CRM systems- as much of the published works are found in business papers, magazines and on websites. Reid and Caterall (2005) also added that there are not sufficient literatures expressing the role of data quality issues in hampering the successful 2

11 completion of CRM projects. It is in line with the high failure rates of about 63% of CRM projects, highlighted by Merkle (2013) and the limited academic literature on this topic, that this research is geared towards discovering the factors that affect the successful implementation of CRM projects. This has therefore led to the formulated research questions below: 1.4 RESEARCH QUESTIONS 1) What role do CRM applications play in organizations? 2) What are the causes of CRM failures? 3) What are the factors that are responsible for the successful implementation of CRM projects? 4) How can a successfully completed CRM project serve as a source of competitive advantage for companies within the telecom, government and financial sectors? 1.5 SIGNIFICANCE OF STUDY The findings generated from this research would be helpful in having a clearer picture and understanding as to the factors that hamper a successful CRM implementation, how these could be better managed and overcome- and then serve as a source for competitive advantage. This work would be significant not just to companies within the government, finance and telecom sectors but firms using or considering the adoption of any form of customer relationship platform 1.6 RESEARCH OUTLAY This research is divided into five chapters, with the first being the introductory chapter, which embodies the research background, aims and objectives, research problem and the research questions and the significance of study. The second chapter reveals the related literature on the germane concepts of CRM, ERP, Management strategy, competitive advantage and theoretical frameworks relevant to this investigation. The third chapter is focused on Research design and Methodology- as the nature of the investigation is highlighted. In addition, this chapter indicates the data collection method, sampling techniques, reliability, validity and possible limitations of this 3

12 research. The fourth chapter expresses the presentation and analysis of data. In addition, it would show how the collected data addresses the research questions and realises the objectives. Chapter five presents the conclusion and recommendations. 4

13 2.0 LITERATURE REVIEW The presentation of related literature is an important section of any given research, as this could be conceived as the recognition and evaluation of contributions made by others within a given discipline (Collis and Hussey, 1997). It is also defined as an acknowledgement of contemporary thinking in a field (Creswell, 2014) whilst Bryman (2012) believes it is an integral and germane review of related studies in order to prevent reinventing the wheel. This chapter incisively presents further explanation and definitions of the pivotal concepts behind this research. It also presents different arguments and perspectives in relation to the concept of CRM, its enabling and inhibiting factors, to gaining competitive advantage. 2.1 ORIGIN AND EVOLUTION OF CRM Xu et, al (2002) conducted an extensive research which addressed how CRM has evolved over time. They believe the first breed of CRM solutions came in the late 1980 s and early 1990 s- and the providers of this inaugural products are known as Clarify, now owned by a firm called Nortel Networks Corp. Other pioneering CRM solutions are Onyx Software, Vantive and Siebel systems. While Xu et, al (2002) looked at the evolution and origin of CRM from a systems and platform perspective, Payne (2012) delved more into its concept and principles. He argued that the term CRM came into use in the 1990 s but the principles on which it has been premised upon, has existed for a longer time. Payne (2012) further added that CRM did not emerge in isolation but progressed through the tenets and framework of relationship marketing. He thus, views CRM as information-enabled relationship marketing. The transformation of CRM from the late 90 s to date, have been largely influenced by factors such as the wielding influence of computers, increased storage capacity of computers, rise of e-commerce and sophisticated data mining tools. 5

14 Table 1: The history of CRM (Source: Xu et, al (2002)). Age Year Lesson learned Milestones Introduction 1980 s to Very expensive to Focusing on automating early maintain And standardizing the internal Processes to make the customer and asset. Growing Mid-1990 Some vendors are Due to the emergence of the web, to end slow to respond to client/server architecture behind 1990 the internet CRM applications would disappear. Current 2000 N/A E-CRM Future After 2000 N/A N/A With a good understanding on the emergence of CRM, it would now be imperative to incisively look into its definition from different authorities. 2.2 WHAT IS CRM? Greenberg (2009) believes the concept of CRM has been poorly defined over the years and misconceived by many company executives. This sentiment is shared by Buttle and Maklan (2008) who also argue that there seems to be a confusion regarding its meaning and Cooper (2001) highlights the presence of heightened academic debates on the meaning of CRM. In the light of all this, Greenberg came up with a working and tenable definition: CRM is a philosophy and a business strategy supported by a system and a technology designed to improve human interactions in a business environment. (Greenberg: 2009:30) In adding a bit of more clarity, to this definition, Greenberg (2009) believes CRM is more operational and transactional approach to customer management, that was centred on the customer-facing departments- marketing, customer service and sales. 6

15 Dyche (2001) believes that the definition of CRM has emerged as companies are seeking ways to identify valuable customers and maximizing their patronage. It is based on this need that she defined CRM as the framework that enables the expression and increase in customer value, and the appropriate way to motivate profitable customers to remain faithful or buy again. Kostojohn et, al (2011) brought an interesting and two dimensional element to the definition of CRM. They believed the business landscape is becoming more competitive as companies seek for new ways to gain competitive advantage. This makes it worse as the customer becomes more sophisticated, more demanding and less loyal. To them, this sparked the emergence and definition of CRM, which is two dimensional in nature. On the first hand, they argued that CRM is a program that embodies the people, process and technology that a business employs to improve her customer focus. On a second perspective, Kostojohn et, al (2011) are convinced that CRM is an application that depicts its technological attributes that comes in the form of software packages. Putting this in a more concise way, they view the strategy aspect of CRM as a Program and the technological genre as Application. Kumar and Reinartz (2012) share the same thought on CRM with Kostjohn et, al(2011). They define it from a customer value perspective, which goes thus: CRM is the process of analysing and using marketing databases and leveraging communication technologies to determine corporate practices and methods that maximize the lifetime value of each customer to the firm (Kumar and Reinartz:2012:4) On the contrary, authors like Peppers and Roger (1995, in Varey 2012) argue that IT is the most important aspects of CRM, as they define CRM from a purely technological perspective to mean a market place for technology-laden and software driven changes. Kotler and Keller (2011) debunk and disagree with the thoughts of peppers and Roger, which focuses purely on the IT element of CRM. They share the sentiments of most researchers that conceive of CRM as a strategy- which informed them to define it, as a process of meticulously monitoring and executing detailed information about individual customers and all touch points, with a bid to ensuring loyalty. Finally Xu et, al (2002) couldn t have put up a more comprehensive and concise definition of CRM as an ell-encompassing strategy, which easily integrates sales, customer service, marketing and field service. With a good working definition and understanding 7

16 of the cardinal concept of CRM, for the good of this research, it would be imperative to look at the different types of CRM. 2.3 TYPES OF CRM Dyche (2001) and Greenberg (2004) have contributed a lot to the different types of CRM that exists in the contemporary business environment. Metz (2011) and Jamieson (2014) have also shed a great deal of light to these different forms of CRM that exist. They are: 1) ecrm: According to Dyche (2001), this stands for electronic customer relationship management, which focuses on a web-based form of CRM. Zingale and Amdt (2001) also expressed electronic CRM to embody all CRM functions that are premised on the net landscape- internet, intranet and extranet. They also opine it to be the full spectrum of a company s relationship with the customer that utilises information technology. 2) ECRM: This is a different type of CRM which stands for enterprise customer relationship, as expressed by Dyche (2001). She says it focuses on CRM that spreads on an enterprise-wide perspective of a customer. 3) CMR: Greenberg (2004) highlighted this as a new type of CRM, which involves acronym change- to mean customer managed relationships. According to him, it was first introduced by Disney destinations, the travel arm and vacation division of Disney. He perceives this as a sign that the customer manages its relationship with a company. 4) VRM: Easton and Easton (2014) belief of vendor relationship management as that of managing the relationships with suppliers, while Gut (2007) enthuses that VRM highlights the independence of the customer and her ability to determine relationships with vendors. Greenberg (2004) believes VRM is an emerging form of CRM that involves the creation of tools that aid individuals to relate with vendors- a reciprocal of CRM. 5) PRM: Dyche(2001) views partners relationship management as the ability of a vendor to adequately manage their partners through the injection of dependable systems and better processes for engaging with them. 6) Social CRM: Greenberg (2004) is a leading contributor to this new type of CRM, which he believes is triggered by the needs for a social customer. He 8

17 defined social CRM as a philosophy and business plan of action, aided by a technology medium, processes, business and social characteristics- mapped out to interact with the customer in a collaborative manner. Metz (2001) and Kruger (2013) also share in this thought as they view it as an engagement with the customer in a mutually beneficial manner, of which Jamieson (2014) believes the customer becomes the centre of interaction and Lacy and Diamond (2013) concur to this. Regardless of the above-mentioned types of CRM, Dyche (2001) argue that the company s interaction with the customer is the denominator and maximizing a profitable relationship is imperative. 2.4 SPAN OF CRM FUNCTIONALITIES IN BUSINESS/FEATURES/BENEFITS OF CRM Balba and Garan (2013) are convinced that CRM as a strategy powered by technology is useful in synchronising business activities in marketing, sales and customer services. These are believed to be the three core business areas where CRM capabilities are experienced the most (Greenberg 2009). Contrarily, XU et, al (2002) argue that there is a fourth core area in business where CRM is influential, i.e., field service. We would now briefly look into CRM in relation to these four business areas- Marketing, customer service, sales and field service CRM in Marketing Dyche (2001) conceives of the great impact CRM plays on marketing or a great arsenal in the marketer s armoury. CRM provides a great database that helps marketers execute successful marketing campaigns. Rust and Verhoef (2005) argue that CRM in some cases encounters the problems of homogenous marketing- where the design of the marketing mix for customers is uniform- failing to incorporate individual preferences and differences. They further argue that before the inception of automated CRM, traditional direct marketing techniques have been able to recognise individual preferences and determining which individuals were targeted for a catalogue or direct mailing. On the contrary, Brash and Millhouse (2000) believe CRM, not off the-shelf ones, but process workflows, provides web content management software, which provides personalisation of service to the customer. 9

18 This notwithstanding, Rust and Verhoef (2005) conception of the shortcomings of a homogenous CRM approach in marketing led to empirically testing whether a personalised CRM approach performs better than a traditional segmentation initiative. This study led to the proposition of a new model called: The managerial problem. This model is geared at promoting a personalised CRM marketing philosophy that is entrenched on the profitability level of each customer over a intermediate-term or period of time. The logic behind this model is that, a heterogeneous or personalised CRM marketing approach helps to determine the profitability levels of each customer and what distinct and individual marketing techniques drive or drain the profitability of each customer. It helps to understand where a business needs to concentrate its effort more and where not to. This sentiment is also shared by Park and Kim (2003) who believe committed customers are profitable to the organisation over a longer period of time. Customer commitment does not happen by accident (Roberts-Lombard and du Plessis, 2011), it is a product of meeting and satisfying the customer expectation (Keshvari, 2012). In order for a company to effectively manage her relationship with the customer, there is the need to utilise a CRM platform that supports diverse customer data, like: of-the-customer, for-the-customer and by-the-customer information. The cardinal point here is to have a CRM strategy in place that provides database, decision framework and communication network for effective relationship management (Han-Yuh, 2007). CRM in marketing in this scenario helps marketers to be equipped with customer information (Sarin, 2012), that in turn facilitates a win-win relationship, between the company and the customer CRM in Customer Service Xu et, al (2002) argue that due to a saturated and competitive business environment or market place, companies are now looking beyond a product-cantered stage to a more customer-focused proposition. Customers seem to be demanding for a more improved and responsive relationship with businesses (Nejiatian et al, 2012). They also argue that with current CRM technologies, businesses are assisted to acquire 10

19 enough information about the customer- what they bought, when they bought, what challenges they ve had and predictions premised on their historical behaviour. At this current business age, the ability to understand and effectively manage the customer relationship is pivotal to achieving the business goals (Goodman 2014). CRM is very instrumental in delivering customer-centric relationships (Greenberg, 2010). Great companies are focused on effectively using CRM to understand the customers needs, concerns and challenges- devising a plan to address these customer worries, in a bid to delivering a better customer experience (Blanchard, Halsey and Cuff, 2014). The tripartite aim of CRM is to improve a company s ability to comprehend the customers current needs, what they have done in the past and what they aim to do in the future. Rababah et al (2011) therefore added that understanding the customer simply helps deliver a top-notch customer service and experience CRM in Sales A great feature of CRM is sales force automation or how CRM is useful in the sales process- in upselling and cross-selling to customers (Kaushik and Kundan, 2009).Also, Xu et, al (2002) believes the first characteristics of CRM is in enabling and facilitating the sales process by providing a system and a database that expresses current customer, competitor offering and product deals- all in a central system. This empowers the sales agents with the appropriate information to provide customers with the best possible deals (Ling and Yen, 2001). In a more detailed manner, CRM provides an integrated order placement and tracking system, which helps the effective monitoring of the customer s sales cycle. A concise view of each customer does comprise of all contact information and sales history (Almunuwari and Anshari, 2011). In summary, CRM is instrumental to sales (Xu and Walton 2005) due to its ability tap into product, promotion and discount data, with the help of and internet- to convert that prospect or lead to an actual sale CRM in Field Service Xu et, al (2002) are convinced that this is a characteristics and business element of CRM. This implies that with a CRM platform, remote staff can quickly and adequately communicate with customer service agents to satisfy individual customer 11

20 expectations. In a more practical sense, customer requests are entered in, allocated, supervised and tracked to maintain a high quality of customer service. Well trained engineers that are also available are then promptly assigned to deal with each case (Bull and Adam, 2010). Peppers and Rogers (2011) and Spector (2012) believe on the essence of CRM and its role in field service. On the contrary, they integrate field service into customer service. This then leaves the three main core business elements of CRM- marketing, customer service and sales. 2.5 IT COMPONENTS OF CRM At the earlier section, the business elements and characteristics of CRM was looked into, with an aim of understanding how the spread of CRM functionalities is in business. CRM stresses the adoption of customer information to enhance revenuewith an improvement on front office functions: sales, marketing and customer service (Aciobanitel, 2013). According to Payne (2012) this is made a reality with a functional IT infrastructure. To this end, he expressed two types of IT components that enable a CRM platform to maximize customer information Data repository Payne (2012) Identified this as the first type of IT component in CRM, as it helps the organization to gather a whole set of information on customers, using a set of analytical tools that helps in establishing a better understanding of the customer s past and most likely, future behaviour Application This is the second IT component identified by Payne (2012) and comprise of systems that facilitates value-laden customer interactions, across multiple channels. Systems like clever screen prompts, are examples of the application element of CRM (Chen 2012). These prompts will help customer service agents of a customer s profile and the unique techniques that could be adopted to increase up-selling and cross-selling. 12

21 2.5.3 Planning your CRM Program In planning for a CRM program, several elements are considered to be important, as they could be considered a pre-requisite- Payne (2012) considered this to be the development of strategy. Figure 1: The Strategic Framework for CRM (Source: Payne (2012)). Developing a core strategy seems to be fundamental before the consideration and implementation of a CRM project (Lassar et al, 2008). Based on the above diagram, it is pertinent to note that before a company embarks upon a CRM initiative, it is imperative they design strategy from the business and customer perspectives. This section would briefly look into the essentials in planning before the chronological stages of CRM implementation would be delved into. Firstly, from the business aspect, recapturing and emphasizing on the company s business vision is instrumental to its strategy. Payne (2012) went further to state that the process of enacting a firm s business strategy should begin from its vision (Mukerjee, 2009). The business vision should be a true image of the of the company s values and aspirations (Curry 2004). The vision should also aim to provide the best work environment. With a clear vision (Piskar, and Fanganel, 2009), top executives 13

22 could re-evaluate the organizations business strategy that seeks to coordinate all divisions for the actualisation of the corporate goal (Roberts et al, 2005). The important point to note here is that the CRM project is not expected to define a firm s business strategy but to tailor the CRM product to complement the business vision. Secondly, building a customer strategy is an important element to starting up a CRM project. Defining the goals of a business towards her customers is essential. Understanding where this customer comes from, their needs and their expectations (Gurau et al, 2003) are great components of a customer strategy that is inculcated into the CRM program manifesto. After having a clear understanding on the origin, meaning and features of CRM, planning of a CRM program, it would now be important to look deeply into the chronological stages of CRM program implementation, as stated by different scholars. 2.6 IMPLEMENTATION OF CRM Several authors have approached the concept of implementing CRM from varying perspectives (Kevork et al, 2009). This section would therefore capture different key elements that make up the implementation of a CRM program, as expressed by varying authorities. Buttle (2009) has carried out an extensive and chronological CRM implementation process which would be the first to be looked into in line with other researches Five phases of CRM implementation Buttle (2009) came up with the five phases in the CRM implementation process. These phases are found below: Develop the CRM strategy (Phase 1): Developing CRM strategy as defined by Buttle (2009:65) CRM strategy is a high-level plan of action that aligns people, processes and technology, to achieve customer-related goals. The subsets under this first phase would be now be looked into Situation Analysis: This appears to be the first step in the CRM and implementation process (Buttle, 2009) as it involves the evaluation of the company s current CRM state with addressing questions like: Why are we 14

23 where we are? This analysis addresses three key elements. Firstly, situation analysis helps a company address her customers and their respective segments (Lindgreen, 2004). It looks into issues pertaining to customer touch points (Sinha and Iyer, 2013) and their experience of doing business with a company. Other important issues looked at also includes market share and expenditure on customer experience. The second constituent under situation analysis, looks at market deliverables (Chikweche and Stuart, 2013), which comprises of products been offered and the brand s approach. Variables like that of prices and how it compares with the competition is also essential. Finally, the channels or medium through which customers are distributed and catered for is also an important element. Understanding the most effective channel, online, retail or telephone is very important in evaluating the CRM needs and priorities of a company. The ultimate objective is to have a vivid picture into the deficiencies and strengths of a company s customer strategy Embarking on CRM education: CRM is a concept that has attracted a wide array and varying meanings, which tends to be confusing to so many. Buttle (2009) advocates for all stakeholders to have a clear understanding of what CRM means before it is embarked upon. Without a proper education and understanding (Bavarsad et al, 2013) the IT department may assume that CRM is purely a technology project, which is their prerogative, of which Molan et al, (2003) disagrees with, as they believe it is more than an IT project. Sales department may assume it a system that presents a central database that helps hold together customer records (Zahay et al, 2012) that could be used during the sales cycle (Rodriguez et al, 2014). For the marketing department, CRM may seem like a new mechanism that helps for a better marketing campaign (Crosby and Johnson 2001) and campaign management (Hillebrand et al, 2015). While the customer service agents would view CRM as a better way to handling customer complaints (McNally 2007) and tracking cases (Rogers et al, 2008). These are all genuine expectations and capabilities of CRM but they present a fragmented perspective hence, the need for an organisation to enrol her key departmental officials to undergo a training program for a more comprehensive understanding of CRM (Cooper et al, 2005). Shu-Mei and Pin- 15

24 Hong (2014) also argue that a collective training programme helps the sharing of knowledge between departments Formulating the CRM vision: CRM vision is an important element of the Implementation process as it relates to a statement of intent on how CRM would improve the current state of a business (Dashan and Subrat, 2008) and the need to have a set goal, that would propel the entire organization (Khalid et al, 2011). Other researchers like Sami and Ibrahim (2011) are convinced beyond doubt that the CRM vision is the ultimate guide to the actual implementation Set priorities: Having priorities set right is an important aspect of the implementation process (Bohling et al, 2006) and the balance score card (Mohammad et al, 2011), as every core department- sales, marketing and service are aligned to CRM projects that are of high importance- with quick returns, accelerated wins at reduced cost (Buttle 2009). Puente and Cervilla also added to this as they opined that the implementation of CRM projects should be in line with the organization priorities Set out goals and objectives: Goals and objectives are very important elements to the implementation of CRM projects (Sarmoniotis, et al, 2013) and Sudhir (2004) believe if this is not set clearly, failure is inevitable. Khalid et al (2011) are convinced that having a clearly defined goal is a prerequisite and Buttle (2009) agrees that they are an offshoot of a crystal vision and well set priorities Identifying people, process and technology demands: Chen et al (2003) believe that CRM requires the combination of people, process and technology to understand the company s customers. To this effect Parida and Baksi (2013) advocated for the identification and integration of the key people, required process and appropriate technology to make this work. A more sales oriented process, would require the appropriate sales personnel s and a salesforce automated technology (Butter, 2009) Designing and developing the business case: Doyle (2007) argues that so many projects do not come to fruition because the project 16

25 advocates and sponsors fail to understand the pivotal role of a concrete business case. His experience with the deployment of an analytical CRM project for a US telecommunication company, made him point to the critical role of having a strong business case that becomes a strategic tool to the project development cycle and onward project delivery. Buttle (2009) went ahead to stress the important role a business case or the justification for a project plays. He is convinced that a good business case should portray the cost and revenue of a proposed project; highlighting its essence and benefits Build CRM project foundations (Phase 2): This phase comprises the cornerstone of CRM implementation. Buttle (2009) points out essential elements to be considered. The first of these that would be looked into is the identification of stakeholders Identify stakeholders: Bohling et al, (2006) believe the Identification of key stakeholders are instrumental to the successful implementation of CRM programs, as these stakeholders could consists of employees, shareholders customers and vendors. Mukerjee and Singh (2009) also added that it should not only be the identification but also the alignment and appropriation of each stakeholder s capability Governance structures: Piskar and Fanganel (2009) believe that CRM projects require governance structures that guarantee that roles and responsibilities are adequately defined and adhered too. Bygstad (2003) argues that CRM projects are very complex hence, the need for a governance structure that defines the roles and responsibilities of the project management team and the project director Identifying Change management requirements: Introducing a new CRM project brings about change to the way an organization is used to doing things. Desai and Sahu (2008) believe that understanding change management requirements is crucial to the successful implementation of a given CRM project. Buttle (2009) also added that leadership play a crucial role in identifying 17

26 the change management needs of an organisation and also driving change. He looked at change from a top-down leadership and bottom-up buy-in Organizational culture: Sudhir (2003) believes if CRM has any chance of succeeding it needs to be aligned and embedded into the corporate culture of the organization. Chung et, al (2012) believes the way people think, act and overall behaviour in the organization forms the corporate culture. They also believe a more flexible, enterprising and resource oriented behaviour within the work force, would facilitate CRM success, as people would be more prone to adjusting to the changes and complain less Identify important success factors: Buttle (2009) believes the CRM critical success factors are the must haves that are instrumental to an excellent implementation. To this end he added these as possible CRM success factors: availability of useful and timely customer information, crystal focus on people and process challenges, organisation culture that is adaptable and with manageable milestones. Lawson-body et al, (2011) argue that CRM success is highly determined by social rather than technical factors. They believe that the context and environment in which a company exists and how it relates and reacts to this environment is critical. They also looked at the data quality issues and how an organization handles this as an important success or failure factor while Moghadam et al, (2013) are convinced that organizational variable and CRM experience are major determinants of success Putting up a proper risk management plan: Buttle (2009) argues that a massive amount of CRM projects fail- about two-thirds. He further added that some of these projects fail to succeed because of poor project management techniques, lack of organisation focus and resistance to change from end users. He then concluded the importance of identifying potential risks to a CRM project beforehand and then putting in place contingency plans in place. Havlicek et al (2013) posited that a proper risk management plan is an integral part of ensuring quality CRM projects or otherwise conceived as quality management. Agrawal (2003) also argued that the risks management techniques in CRM implementation would be properly developed to prevent failures. He also added that CRM should not take a one-size-fits-all approach, 18

27 but companies need to take a unique stance and prepare for any risk that may arise Specification of needs and selection of partner (Phase 3): This is the third phase of the Implementation process and is focussed on finding effective business processes, data review,, identification of technological needs, write requests for proposals, call for proposals, re-evaluation of technology requirements and partner selection (Buttle, 2009). Without delving into much detail of the individual elements, it is important to state that researchers like Piskar and Faganel (2009) believe that defining the business process, helps choose the right CRM partner and ensure project success. Maguire et al, (2007) is convinced that developing a good listening process, that takes customers needs and perceptions into account, is important to finding the right vendor, which could be through outsourcing, as expressed by Kalaignanam (2013) Project Implementation (Phase 4): Bohling et al (2006) believe that CRM implementation depends on so many building blocks or factors which have been laid out in the previous three phases put together. The necessary implementation elements that could determine a CRM project successful would be looked into below Refine project plan: This is the first step to the implementation process as expressed by Buttle (2009). During this step, the leadership are encouraged to discuss with the selected partners or vendors to set new milestones and modify the budget Identify technology customization needs: It is widely conceived that off the shelf software solutions do not necessarily meet the CRM needs of an organization. It is to this end that Pliskin (2005) and Ashok (2007) also believe that there is the need for the customization of CRM applications to meet the unique needs of a given business. Buttle (2009) went ahead to propagate for a gap analysis approach, which entails how gaps exists between the business requirements of a company and the capabilities of the software 19

28 provided by a vendor. These gaps are then looked into with the aim of providing modifications to address and accommodate the needs of the company Prototype design, test, modify and roll-out: Limbasan and Rusu (2011) highlighted the importance of first having a prototype for testing before roll-out with their SaaS CRM prototype for the real estate industry. Roussinov and Leon (2004) looked at how customer feedback helps refine a prototype and Mei-Yu (2008) believes that effective prototyping and modification are paramount to a CRM success Evaluate Performance (Phase 5): Evaluating the performance of a CRM project is very important as Handoko and Gaol (2012) appraised the adoption of a CRM project by a retail company. They also evaluated the performance of the CRM project along these three dimensions: financial, technology and business yardsticks. Based on this research, it looks imperative for any given firm to gauge how successful her CRM project is along these tripartite dimensions. Abdullateef (2011) evaluated call centre CRM projects and concluded that just a successful technological installation but customer satisfaction and general efficiency, should be used to evaluate the result of a CRM project. It would now be helpful to briefly look at other key elements for CRM implementation and measurement for success as key elements that make up this program and the right sequence to ensure project delivery (Gentle 2002) would be expressed Defining CRM success: According to Dyche and Longman (2002), this is a critical element of any given CRM program. They believe clearly defining the success metrics of a CRM program is not as easy as it may seem hence, emphasizing the organizational boundaries of CRM, from the start is important. It is therefore imperative for senior executives and programmers to agree on a singular or unified CRM goal. It is on the basis of the complexity of having everyone in an organization seeking towards a common CRM goal and success that Dyche and Longman (2002) advocated for a Stovepipe approach to CRM implementation. This approach entails commencing a CRM led transformation from a small scale, like a single business unit like marketing, with an ambitious sectional head, enlisting the support of the technology department in designing a 20

29 small scale CRM project for its division. Once this project becomes beneficial to the said department and proves to provide a good return on investment, other departments in the organization can then be included in the horizontal spread of the CRM capabilities, with gradual upgrade of features and steady expansion of user base. According to Dyche and Longman (2002) this seems to be a better and a safer bet to achieving CRM success than a drastic and colossal approach, otherwise viewed as just add water approach. It would now be important to look into some important factors and elements that needs to be taken into consideration when a successful CRM project is anticipated and about to be initiated Table 2: Evaluating the factors of CRM success (Source: Dyche and Longman (2002)) Factor Ideal Desirable Undesirable Initial Trigger A C-suite executive or a board member reads about CRM and how it could make the organisation more competitive Sponsorship An executive that oversees several divisions considers CRM as a competitive tool. Objective definition Effective customer experience, increase in sales and customer loyalty A customer executive or line manager attends a conference where CRM increasing sales of a given A product development manager sees an impressive demo from a CRM vendor. company is addressed. An unconventional CRM is adopted and ambitious due to a vendor departmental head offering massive experiences the discounts. benefits of CRM in his/her department. Enhanced To include CRM to customer the IT repertoire interactions for the sake of having a box ticked 21