IMPLEMENTING e-crm IN ORGANISATIONS : TRENDS, BENEFITS AND CRITICAL ISSUES

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1 Daminni Grover 207 Short Communications IMPLEMENTING e-crm IN ORGANISATIONS : TRENDS, BENEFITS AND CRITICAL ISSUES Daminni Grover Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 In recent years CRM has made significant strides world over as an effective aid to serve customers. There may be hardly any organisation which in some way or the other is not using CRM philosophy. CRM received fillip with the advent of internet and related web enabled technologies. As companies make the transition from a product-only focus to a customer focus, CRM emerges as a technology that brings customers closer to organizations to retrieve information online. In view of considerable research and developments in web enabled CRM area during last two decades it becomes necessary to take stock of emerging technologies and identify emerging opportunities and bottlenecks in implementation. In this paper it is attempted to review developments in e-crm that facilitates online service to customers. Apart from review of technology related developments, the study focuses on identification of thrust areas resulting benefits and implementation strategies. Key words: Customer relationship management, e-crm, customer relationship path, implementation strategies INTRODUCTION Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer (Parvatiyar and Sheth, 2001). To support this capability, customer relationship management is evolving into electronic CRM. An increasing number of companies are considering 2007 IILM Institute for Higher Education. All Rights Reserved.

2 208 Daminni Grover implementing e-crm systems to satisfy the growing expectation of customer service. e-crm systems have unique characteristics that support customerbusiness interactions that are linked to internal business processes and systems across different areas for operational and analytical purposes. Today companies are being confronted by an increasingly sophisticated customer universe, which expects and demands a higher level of immediate service across multiple access channels. Customers feel that customer service should occur via the channel of communication that they specify to be communicated, or at least the channel through which contact with a company was initiated. Customers not only want to shop and get customer service through multiple communication channels, such as the telephone, web chat, electronic mail, and the web, they desire the ability to move seamlessly from one medium to another. e-crm enables to serves customers online and covers areas like content management, product and pricing models, customer service support, problem resolution and automated response agents and campaign management functions. In order for a company to provide unified customer communications at different customer interface points, it should be kept in mind that online customers can relate with a company through several channels. In view of multi-point contact with customers, e-crm implementation requires organisations to have several devices and technologies in place such as inbound/outbound support, chat/browser control, voice-over internet protocol (VoIP), multi-language support; 3. Marketing Management 5. Back Office Analysis Customers 2. Sales force Automation 1. Customer Support and Service 2. E-Commerce Fig. 1 e-crm through the customer lifecycle

3 Daminni Grover 209 messaging, work-flow and web measurement devices. SAS India, a whollyowned subsidiary of the business intelligence firm SAS, has provided e-crm solutions in India for Citibank, Standard Chartered Bank, and GE Capital, among others. However, domestic companies are also starting to recognize the value of e-crm. Bharti Cellular, Hindustan Lever Ltd., Goodlass Nerolac Paints and Ravissant among others have implemented CRM systems from SAS India. (Lamont, 2002). Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 e-crm embraces the front-office business functions of sales, marketing and customer service, and supports the back-office business and analysis operations spanning these functions, all in a web-centric fashion (Talisma, 2001). Fig. 1 illustrates how e-crm functionality supports each of the five business components of marketing, sales, customer service and support, e- commerce and the electronic processes in the back-office analysis. CUSTOMER SALES PATH A sales path comprises of phases that take a consumer from a prospective to a buying customer (Fig. 2). This automatically brings various e-crm components into pictures such as marketing, sales cycle, customer service, back-office support and e-commerce that engage to convert the prospective customer into a confirmed buyer. These components are described below. Marketing Management. The first phase in any sales process is to create awareness, interest, and desire in a company, its brand or its offerings. This is the task of typical marketing management function as a substitute of traditional advertising (Dru, 2002, p. 180). Interactive technologies such as Internet has provided a real meaning to CRM. Federal Express transformed itself when it allowed customers to track their packages online. That interactive experience became an integral part of the FedEx brand (Dru, 2002, p. 181). Marketing automation covers a wide range of interactive capabilities such as response systems, campaign management and execution tools, and management and distribution of marketing materials to sales people and partners (Greenberg, 2002, p. 28). Sales Cycle. The sales cycle takes over in the process of converting the prospect within the sales path and the next phase in the path is the research

4 210 Daminni Grover phase. This evokes interest to possibly buy a product or service and the information made available through Internet facilitates him to make up his mind and buy the product. The Internet has simplified this phase with companies displaying their offerings on websites. Depending on the offering, consumers often demand a demonstration prior to purchase (Dru, 2002, p. 182). The sales cycle, specifically sales-force automation takes over at this stage which covers activities such as lead qualification, generation and tracking, opportunity and contract management, and account management (Greenberg, 2002, p. 28). E-Commerce. Mass customization became a reality with the Internet when companies like Dell created new business models enabling customers to customize individual products from online catalogues prior to purchase (Dru, 2002, p. 181). Digital technologies such as e-commerce, that facilitates online order processing, billing and payment, also play an important role during purchase phase. Stream International, a global provider of e-crm outsource solutions for leading technology companies and e-businesses, has launched its expanded e-service offering through its new Virtual Interaction Center in India with effect from September 14, 2000 (Canton, 2000). PlayStation took pre-orders for its PS2 product on its website prior to the product launching. Similar to global online book retailer Amazon.com, an Indian online retailer named Kalahari.net also uses a virtual shopping cart for customers to buy online during the purchase phase. e-crm ensures that vital customer behaviour and information is monitored and captured during the purchase phase. CUSTOMER RELATIONSHIP PATH Internet and digital interactivity helps customers to get closer to brands. They can interact and experience brands directly and can gain immediate new benefits on a one-to-one, often customized basis (Dru, 2002, p. 179). A typical customer relationship path integrates customers with the supplier and continues from where the customer sales path ends (Fig. 2 and 3). Customer relationship path begins with the sales path and comprises of a number of phases that aid in taking the consumer from a prospective buyer to a loyal supporter; e-crm supports the business components of marketing, sales, customer service and e-commerce throughout this path. e-crm system

5 Daminni Grover Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 Awareness Phase Interest Phase Desire Phase Research Phase Trail Demo Phase Customise d Phase 1. Marketing Management 2. The Sales Cycle 3. e-commerce Back Office Analysis Fig. 2 Customer Sales Path Tracking Delivery Customer Support Enablement Phase Viral Marketing Upgrade Phase Buy in Brand Family Customer Service and Support Back Office Analysis Fig. 3 Customer Relationship Path Purchase Phase Purchase Again

6 212 Daminni Grover architecture needs to permit easy round-the-clock access by both customers and company users from all supported access points. An open architecture is necessary to provide scalability, flexibility and easy maintenance. Digital technologies play a key role in cost-effective tailoring of one-to-one communications, mass customization and the sophisticated segmentation of customer databases (Fig. 3). e-crm TECHNOLOGY An e-crm system is to be accessible to customers including company users and administrators from all access support points, round-the-clock on a 24/7 basis (Technosoft, 2003 p. 1). The e-crm system should provide access to customers through a variety of touch points namely web selfhelp, , web forms, chat, VoIP, fax, phone, wireless and face-to-face contact. It should also provide access to system users through various client systems such as personal computers, mobile phones and personal digital assistants (PDAs). The e-crm system needs to support integration with customer interactions taking place in web based media, such as and web forms including those from traditional channels such as telephone. Given that interfacing with customers is fundamental to e-crm, the system must also have facilities to maintain a complete organised history of a customer s contacts with a company, regardless of the communication channel used. Ideally, an e-crm solution should feature three-tier architecture to provide scalability, offer flexibility and simplify maintenance (Technosoft, 2003 p. 1). An open architecture is necessary to allow e-crm solutions to be extended and integrated with external systems on all three levels, or tiers. The three tiers are listed below: Presentation tier. The presentation tier includes interfaces for various types of access methods from both the customer and client user or administers point-of-view. Depending on available technology and its accessibility provision there is to be flexibility to access Local Area Network (LAN), Wide Area Network (WAN), wireless, portal and remote access via the Internet and offline connectivity (Technosoft, 2003, p.1). Business logic tier. This tier consists of the core application logic, the accompanying objects and services.

7 Data tier. This tier should comprise of a full-function database management system which could be software such as Microsoft SQL Server or Oracle. Security. Although it was not originally included as a tier, the author of this study is of the opinion that Information Security Architecture (ISA) should feature as a separate tier within the e-crm architecture. BENEFITS OF e-crm Daminni Grover Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 Most organisations invest huge sums in defining and automating their core business processes. No doubt, they have benefited by standardizing the processes, yet there are several areas which remain unresolved where e-crm can play effective role. The following benefits can be realized with proper e- CRM implementation: Increased customer loyalty. An effective e-crm system enables a company to communicate with its customers using a single and consistent voice, regardless of the communication channel. This is because with e-crm software, everyone in an organization has access to the same transaction history and information about the customer. Information captured by an e-crm system helps a company to identify the actual costs of winning and retaining individual customers. More effective marketing. Having detailed customer information from an e-crm system allows a company to predict the kind of products that a customer is likely to buy as well as the timing of purchases. In the short to medium term, this information helps an organization create more effective and focused marketing/sales campaigns designed to attract the desired customer audience ( e-crm allows for more targeted campaigns and tracking of campaign effectiveness. Customer data can be analyzed from multiple perspectives to discover which elements of a marketing campaign had the greatest impact on sales and profitability (Greenberg 2001). Improved customer service and support. An e-crm system provides a single repository of customer information. This enables a company to serve customer needs quickly and efficiently at all potential contact points, eliminating the customer s frustrating and time-consuming hunt for help ( e-crm-enabling technologies include search engines, live help, management, news feeds/content management and multi-

8 214 Daminni Grover language support. Titan took up the CRM initiative in May 1995 by introducing the Titan Signet. This loyalty programme was based on the creation of a database of loyal customers, rewarding their loyalty and interacting with these valued customers by continuously interacting and receiving feedback, and suggestions (Raghunath, 2001, p.433). Indian Rayan, an Aditya Birla group company, was another leading firm to use e-crm. Greater efficiency and cost reduction. Automating customer data mining saves valuable human resources. Integrating customer data into a single database allows marketing teams, sales forces, and other departments within a company to share information and work toward common corporate objectives using the same underlying statistics ( Examples of this are identifying unproductive/underutilized resources, closer tracking of costs, better forecasting for the pipeline and setting realistic project metrics and measurements to quantify return on investment. IMPLEMENTATION STRATEGIES FOR e-crm Once a company has identified the need for e-crm, it has to plan for implementation for which following aspects need to be taken into account. Developing customer-focused business strategies. The objective of this step is not to try to change the customer to the company s goals but to listen to the customer and try to create opportunities beneficial to both. It is important to offer customers what they are currently demanding and anticipate what they are likely to demand in the future. This can be achieved by providing a variety of existing access channels for customers, such as , telephone and fax, and by preparing to provide for future access channels such as wireless communication. With the entry of e-crm in hospitality industry the traditional way of travel agents and other representatives arranging hospitality services for hotel and travel reservations has changed. Using hospitality e-crm Software, hoteliers are using ondemand e-crm softwares to cut distribution costs, preserve brand and price integrity and to operate at a step remove from industry discounters (Chandra, 2007). Many private airlines in India have initiated e-ticketing and advance seat booking as part of e-crm software. Websites like Expedia.com, Makemytrip.com, Yatra.com and Travelguru.com have helped

9 Daminni Grover 215 customer plan holidays / business trips within a set budget as they can take advantage of buying tickets available at the lowest fare directly without the involvement of an agent. Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 Retooling business functions. Starting to do business via e-crm requires disruptive organizational change in order to determine which departments/ functions are truly servicing the customer and which ones are only adding to overhead. After identifying and reducing surplus manpower, administrative time and cost should come down. A major factor here is that the changes needed during an e-crm implementation will only be possible with buy-in from the top levels of management and with company-wide accountability of all stakeholders. Positive organizational change will not simply materialize on its own. It is the responsibility of senior management to ensure that all employees understand the need of the changes, how the new structure will benefit from them, and how it will enhance their ability to serve their customers better. Work process re-engineering. Departmental role and responsibility changes from restructuring business functions will needs adopting new work processes. Choices here are to take the traditional step-wise approach or an integrated one towards improving work efficiency. Under the step-wise approach, departments are treated as separate efficiency entities. This rarely produces good results because the goals of each department can become too parochial, and departments tend to compete internally for their own benefit at the expense of what s best for the company. Technology choices. The focus here is to consider the company s industry, the company s position within its industry, which e-crm implementations are good candidates for the company in particular. Criteria for technology selections includes scalability of software, tool set flexibility for customization, stability of the existing e-crm application code, compatibility of e-crm application with legacy and Internet systems, level of technical support available during and after implementation, upgradable support, availability of additional modules and security. AVIVA Life Insurance, originally a UK based firm has made its mark in the Indian insurance industry in recent years. It has facilitated to install Talisma s e-crm suite to launch cutting edge products and services Similarly, ICICI is implementing various products

10 216 Daminni Grover to establish world class e-crm practices (Chaudhuri & Shainesh, 2001, p.175). Training and implementation. This thrust area is apparently the most important one in e-crm implementation effort. Depending on the number of users, training times will vary from company to company. Training of employees should occur before the new e-crm system has been implemented to ensure a seamless transition for customers. Examples of training include sending users to training facilities at considerable cost or bringing in an on-site consultant. Anyone who requires access to the system should receive full, appropriate and timely training. Training should be an ongoing, managed activity as systems must continuously change and evolve. All training and tools used should be thoroughly documented for existing, new and future employees. Without proper documentation, e-crm system may not work. A firm should plan to spend about 5-7 per cent of its total e- CRM implementation on training (Patton, 2001b). DIFFICULTIES COMMONLY ENCOUNTERED DURING IMPLEMENTATION In an attempt to quickly implement e-crm, too many companies start spending huge sums before developing a comprehensive e-crm strategy. The following list outlines potential pitfalls with e-crm implementation process often encounters and needs to be overcome. Mismatch between a company and the vendor s CRM software. Every effort must be made to find a vendor whose product is flexible enough to emulate the company s best practices and does not force the company to adopt the vendor s best practices. Realistically, no single software solution will handle all e-crm needs equally well. Therefore, each company should select the solution that best handles the critical customer-facing functions and maintains robust links to the existing ERP system. A poor understanding of the company s business processes. Each of the business processes should be reviewed, analyzed and documented before shopping for a vendor.

11 Daminni Grover 217 e-crm implementations that take more than 90 days have a high failure rate. A company should be skeptical about implementations that are considerably longer than the 90 days. Vendor stability should be a criteria used in selection. Financial stability of the vendor needs to be checked to assess whether or not it is likely to be able to survive a softening economy. Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 Rejection by end users is always is a possibility when business functions are restructured. If the new processes required for a successful e- CRM implementation are not developed with the knowledge, help and acceptance of the employees who will be relied upon to use them, the project may fail. Size of project. Some e-crm implementations have failed because their initial scope was too broad. The risk associated with a failed pilot is much lower than for a full rollout, and it gives your company the opportunity to evaluate the positives and negatives of the pilot as one plans for a larger-scale implementation. Unfortunately, avoiding these pitfalls is, in many cases, easier said then done. Often this is because sales and marketing teams are reluctant to adopt the new, automated CRM systems. RECENT TRENDS IN e-crm Recent developments in the field of e-crm include a CRM package evaluation/procurement service, hosting of CRM component applications and the use of Online Analytical Processing (OLAP) tools to develop customer intelligence in order to enhance the effectiveness of e-crm. CRM Package Evaluation/Procurement Service. ITenol is a California based company that offers a service called CRM Solution Acquisition Manager for automating the stages involved in choosing and implementing a CRM package (Bednarz, 2001). All phases are covered, from defining a company s requirements and evaluating vendors to negotiating contracts and generating purchase orders. Once the service

12 218 Daminni Grover is set up, users collaborate to specify business objectives and generate a request for proposal (RFP). ITenol contacts vendors when an RFP is available and vendor reps can collaborate online in response. The service is free of charge to CRM vendors. Once a company has purchased a CRM package, ITenol supplies web-accessible project management tools to help the company install the software. Hosted CRM Component Applications. The market for hosting of fully-fledged e-crm solutions is in decline, partly because of the current economic climate and partly because the levels of customization demanded by client businesses to meet their particular needs are too complicated to provide in a packaged solution. Nevertheless, the market for hosted CRM component applications, such as a hosted package from Satmetrix for gauging customer satisfaction, is faring better. The level of investment required is much lower, yet the hosted applications do provide added value to the client companies (Pepe, 2001). Customer Intelligence (CI). As mentioned previously, integration of a company s legacy systems, especially it ERP system, with e-crm functionality is critical to the success of any e-crm implementation. Taking this one step further, customer intelligence focuses on applying the insights derived from customer analysis to e-crm strategies, and then acting upon these strategies to build value into customer relationships. The customer intelligence enabling technologies must be tightly integrated with the ERP and e-crm solutions in order to provide near-real-time data access and analysis. (Harvey, 2001). OLAP tools, available from companies like Cognos, are the core enabling technologies that make the advanced analytics required by customer intelligence possible. The OLAP software enables predictive modeling, data mining and data visualization that are needed to uncover hidden relationships in customer data that hold the keys to understanding customer behavior and determining customer value. CONCLUDING REMARKS e-crm has evoked considerable interest about its effectiveness and risks amongst many organizations and researchers. e-crm remains a priority

13 Daminni Grover 219 for organizations, even as economic conditions cause IT budgets to be scrutinized. This paper has shown how e-crm can add to traditional marketing concepts. e-crm is not here to change the marketing but instead to enhance it. This paper examines problems that can accompany an e- CRM implementation and how to avoid them. In addition, critical issues have been identified that companies need to consider while starting e-crm implementation. In addition, customer-centric and corporate benefits of implementing an e-crm solution have been reviewed with the understanding that e-crm efforts will only succeed when organizations make their customers win. Members Copy, Not for Commercial Sale Downloaded From IP on dated 30-Nov-2010 When companies understand customer buying behaviour they can avail cost savings and increased customer loyalty. Identifying products customers want is the first step of product mix expansion, new product launches and product differentiation. e-crm can successfully implement new products, launch new marketing campaigns, and satisfy customer needs and wants. To be successful e-crm requires that organizations allocate sufficient resources for building customer relationships and continuously evaluating e- CRM initiatives. The evaluation and benefits realization mechanisms can expedite the organizational learning process and help make e-crm work to the benefits of all customers and external partners, whether viewed from a narrow buyer/ seller perspective or a broader supply chain perspective e-crm is an essential tool for any organization s high performance and depends on worker s effectiveness more than their efficiency. By doing so, companies can engage their customers in an ongoing knowledge exchange in which the company can learn more about market and customer needs and work to develop and deliver the products and services that can exceed the customers expectations and leap ahead of market trends. REFERENCES Bednarz, Ann (2001) CRM Painkiller Debuts, Network World, September 24. Canton, M. (2000) Stream International Launches Virtual Interaction Center Offering Expanded e-service Capabilities in India, Business Wire,September 14. < Accessed on June 1, 2008.

14 220 Daminni Grover Chandra, H. (2001) IT Contributions to the Hospitality Industry & its Further Scope, June 22. < Accessed on June 8, Chaudhuri, A. & G. Shainesh, Implementing a Technology based CRM Solution: The ICICI Experience. In Conference Proceedings. Sheth, J.; A. Parvatiyar, G.Shainesh (eds.) Customer Relationship Management : Emerging Concepts, Tools and Applications. New Delhi: Tata McGraw Hill Publishing Company Ltd., p Dru, J.M. (2002) Beyond Disruption: Changing the Rules in the Marketplace. New York: John Wiley & Sons, Inc. Greenberg, P (2002) CRM at the Speed of Light: Capturing and Keeping Customers in Internet Real Time. New York: McGraw-Hill. Harvey, Lynne (2001) Building Customer Value Across the Enterprise. New York: Patricia Seybold Group. Lamont, J. (2002) CRM Around the World, KMWorld Magazine, October 1. < Accessed on June 1, Parvatiyar and Jagdish N Sheth (2001) Conceptual Framework of Customer Relationship Management. In Customer Relationship Management: Emerging Concepts Tools and Applications. New Delhi: Tata McGraw-Hill Publishing Company Limited p Pepe, Michele (2001) Is There a Market for Hosted CRM Solutions? Computer Reseller News. Raghunath, H. Customer Relationship Management in Customer Service: The Titan Experience, In Conference Proceedings, Sheth, J.; A. Parvatiyar; G. Shainesh (ed.), Customer Relationship Management Emerging Concepts, Tools and Applications. New Delhi: Tata McGraw Hill Publishing Company Ltd., p Talisma (2001) Critical Steps to e-crm: Best Practice (white paper). Accessed on: March 15, Technosoft (2003) What is e-crm? Accessed on May 28, ACCOMPLISHMENT