THE IMPLEMENTATION OF INFORMATION SYSTEM CRM IN THE COMPANY. Ing. Viliam Lendel - Ing. Milan Kubina, PhD., University of Žilina

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1 Constantin Brâncuşi University of Târgu Jiu ENGINEERING FACULTY SCIENTIFIC CONFERENCE 13 th edition with international participation November 07-08, 2008 Târgu Jiu THE IMPLEMENTATION OF INFORMATION SYSTEM CRM IN THE COMPANY Ing. Viliam Lendel - Ing. Milan Kubina, PhD., University of Žilina The last several years saw the rise of CRM as an important business approach. Rather than market to a mass of people or firms, market to each customer individually. In this one-to-one approach, information about a customer is used to frame offers that are more likely to be accepted. This approach is made possible by advances in information technology. This article deals with implementation of information system - CRM in the company. This process consists of four basic stages, which interact with each other. Content of individual stages is specified in an article step by step. 1. 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. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. It's a strategy used to learn more about customers' needs and behaviours in order to develop stronger relationships with them. Thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. The company must analyze its business processes to decide which need to be reengineered. Next is to decide what kind of customer information is relevant and how it will be used. Finally, a responsible team or top management must choose the right CRM solution. This process, depending upon the size of the company and the breadth of data, can take anywhere from a few weeks to a year or more. 2. Implementation of information system CRM in the company Implementation of information system CRM in the company has four general phases, which are interlock. These general phases are (Figure 1): 1. Conception, 2. Selection, 3. Implementation, 4. Realisation. The first phase is known as conception. This phase informs about necessity of exactly defined criteria and conditions. CRM information system must fulfil this defined criteria and conditions. They are needed in process of selection of effective CRM information system. The third phase is known as implementation. Principal aim of this phase is successful adaptation of software and organizational structure. The phase of implementation finishes with testing and realisation of system in the company. For successful implementation of 353

2 CRM information system is necessary to have skilled employees. Assurance of regular communication is most important in this phase. 1. phase: conception 2. phase: selection 3. phase: implementation 4. phase: realisation Start of project Analyse and preparation Design Implementation of software Testing of software System requirements Selection of software Pilot run Implementation of system Data saving and transmission Process Staff training organisation User support Figure 1 Implementation of information system CRM in the company 3. Conception This phase deals with analyse and preparation, design and system requirements. The most important part of this phase is analyse and preparation. There are four general phases of the successful preparation of the company for an implementation of information system - CRM procedure and they are interlocked. These general phases are: 1. Effective work with information. The phase informs about necessity of effective work with information in process of successful preparation of CRM in organization. 2. Change of organizational structure Principal aim of this phase is successful change of organizational structure. The phase deals with creating and interpretation of employee s vision of change, necessary knowledge assurance to change, accumulation of financial and personal resources and creating of competent action plan. 3. Change of thinking The companies, which want to succeed, must think about effects of their activities. The company must principally aim for the needs of people. Investment in customer doesn t always cost marketing and sales. Investment orientation of effects meaning, that the company renounce of actual cash flow for account for assurance of future cash flows thanks to good relationships. 4. Successful preparation of CRM If a company has achieved effective work with information, a change of organizational structure and a change of thinking, it is prepared for entering the fourth priority phase. In this phase the company builds CRM and defines system requirements. Figure 2 depicts the important components of the successful preparation of the company for an implementation of information system - CRM procedure. 354

3 Figure 2 Analyse and preparation 4. Selection This phase deals with selection of software. Decision-making is the cognitive process leading to the selection of a course of action among alternatives. [7] Every decision-making process produces a final choice. Decision-making is a reasoning process, which can be rational or irrational, and can be based on explicit assumptions or tacit assumptions. Barriers to good decision-making are: [7] - Hasty - making quick decisions without having much thought, - Narrow - decisions is based on very limited information, - Scattered - our thoughts in making decisions are disconnected or disorganized, - Fuzzy - sometimes, the lack of clarity on important aspects of a decision causes us to overlook certain important considerations. Decision-making process has eight general phases, which are interlock. These general phases are: [8] 1. Identifying a problem, 2. Identifying decision criteria, 3. Allocating weights to criteria, 4. Developing alternatives, 5. Analyzing alternatives, 6. Selecting an alternative, 7. Implementing the alternative, 8. Evaluation (of decision effectiveness). The problem was identified by rigorous analysis. There's, for example, the Administration system of communication missing in the company. The solution of this problem is the implementation of effective information system CRM (figure 3) and its main priority is the consolidation of communication processes. The realisation of decision about the selection of information system - CRM is needed in this situation. 355

4 Phase of information system CRM selection Problem solution: the implementation of effective information system - CRM P r o b l e m... V a r i a n t s C o n d i t i o n s S E L E C T I O N Saving of all important customer information saved in database, Administration of all communication with customer contacts, Saving of all realized operations related of any contact in history, Available for administration of contacts about company employees, Time management. Object of solution The solutions of CRM at Slovak market C r i t e r i o n s Openness, i. e. possibility of interface of system to the other information systems, English and Slovak language version, Intuitive and "user friendly" control system, Modularity of system, i. e. possibility of later repurchasing of follow-up modules, Credibility, reliability and adaptability. Figure 3 Phase of information system CRM selection [6] The following characteristics are associated with delivery of excellent information system - CRM: [4] - Reliability, - Responsiveness, - Accessibility, - Safety, - Courtesy, - Consideration, - Communication, - Recognising the customer and competence. Effective information system - CRM with the priority of consolidation of the communication processes must fulfil the following selection criteria: [1] - Openness, i. e. possibility of interface of system to the other information systems, - English and Slovak language version, - Intuitive and "user friendly" control system, - Modularity of system, i. e. the possibility of later repurchasing of follow-up modules, - Credibility, reliability and adaptability. In addition to specified criteria, this information system - CRM must fulfil these following conditions: - Saving of all important customer information saved in database, - Administration of all communication with customer contacts, - Saving of all realized operations related of any contact in history, 356

5 - Available for administration of contacts about company employees, - Time management. Complete view of CRM systems supplied and used in Slovak market is not easy to show because a lot of small and medium-sized enterprises use their own various systems. Following list include CRM systems, which are supplied as independent solutions or as addition complete company information system (Table 1). ABRA G3 CRM Cígler CRM S3 Datalock CRM FLEX CRM Microsoft Dynamics CRM Oracle, Peoplesoft a Siebel SAS CRM mysap CRM 5. Implementation and realisation Table 1 View of CRM systems at Slovak market CRM solutions at Slovak Market Addition to ABRA G3 information system Addition to Money S3 electronic system Addition to SPIN information system Addition to FLEX IS information system Part of business solution Dynamics, before Microsoft Business Solutions Parts of information systems Can use other solutions and analytical tool of SAS ERP addition to SAP R/3 system CRM is an opportunity to implement new customer s oriented processes and to eliminate old ones. This is done in four steps. [5] The first step is process description, which consists of three areas. The first area identifies the existing CRM processes and clusters them. The second area is analysing these processes. A well-founded analysis of all CRM processes and structures is the basic for any optimisation. Without the exact knowledge of the existing processes, it is useless to start any redesign program. This analysis delivers indicators of which processes have to be changed, improved or eliminated. The second step is process design and focuses on CRM process reengineering. Based on the findings of the first step, the management has to decide which CRM processes need to be changed or created. This includes reviewing, understanding, modifying, documenting and employing the desired business processes, procedures, rules and policies. The processes should be simple to audit and understand. All employees need to have the same understanding of the CRM processes. In addition, the processes need to be flexible for future changes in customer demands. The third step is implementing the redesigned processes. Process implementation is about implementing the process changes according to predefined key performance indicators. The implementation phase consists of a technical and people focussed area. The technical area is about integrating the CRM processes technically and the people area is about gaining commitment from the important stakeholders for these changes. The fourth step is process monitoring. The process-monitoring phase represents a systematic cost and benefit monitoring. The monitoring process checks the process costs and 357

6 detects when and where key performance indicator deviations occur. Following the "closed loop" principle, further process corrections will be developed and implemented and the monitoring process starts again. The existing customer processes need to be identified analysed and documented. In addition, the new or redesigned CRM processes have to be implemented and monitored. [5] 6. Conclusion Many organizations try to attach a CRM solution to their existing business structures. The worst thing a business can do is to integrate a flawed process into a CRM system, because when automation is added the negative effects of the flawed process increase and the enterprise can unwillingly anger its customers. CRM can speed up all processes, bad and good. [5] Organisations that just replace an existing system with a new one without checking adjusting the old business processes will not improve their customer relationship satisfaction ratings. Therefore, the business structures and processes have to be revised and optimised towards the customers needs. BIBLIOGRAPHY [1] CHLEBOVSKÝ, V.: CRM Řízení vztahů se zákazníky. Brno: Computer Press, s. ISBN [2] BURNETT, K.: Klíčoví zákazníci a péče o ně. Praha: Computer Press, s. ISBN [3] DOHNAL, J.: Řízení vztahů se zákazníky. Procesy, pracovníci, technológie. Praha: Grada, s. ISBN [4] CHAPMAN, A.: CRM - principles, strategy, solutions, applications, systems, software, and ideas for effective customer relationship management. Available on internet: [5] BOSSE, S.: A systematic perspective of a CRM solution for businesses Available on internet: [6] HITTMÁR, Š.: Manažment. Žilina: Edis, s. ISBN [7] ALSAGOFF, A., Z.: Decision Making. Available on internet: [8] MALIK, M., I.: Decision Making: The Essence of Managers Job. Available on internet: 358