INTRODUcTION

of their
Companies, through the years, have been relying heavily on technology for the success
CRM. Siebel, Oracle, and SAP were some of the carly leaders, which gained advantage, but
emerged in the
a few years later, other companies such as Kana, Broadbase, and Epiphany
market. Salesforce also developed Software-as-a-service (SaaS) and became a service provider
in

the CRM market. The development of social media and open source software further gave a big
impetus in the working of businesses and widened their opportunities further. Thus,
customers

also started to look forward for better and efficient services.

Social networking changed the experience of its users and met the changing
demands of its
and
customers, Itisnow being uscd as a tool by consumers for expressing their opinions at all times
anywhere in the world. The role of the customer feedback is, as a result, being valued importantdy
as it can make or break businesses. Business entities are becoming aware of its power and are
customers. With the increase of
trying their best to engage the present as well as their potential
of customers has increased.
smart phones and personal computer (PC) penetration, the mobility
move into their
Therefore, companies are incuding the demands of their customers who are on the
strategies. Besides, there are various technologies that aid CRM further in its functioning.

Due to the advancements in technologies, the future of organizations lies with CRM.
Organizations must therefore pursue strategies further which are in tandem with the category
of

It can only be made pOssible

customers they as a company want to attract and gain advantage.
Thus, the interaction between
because of the Internet and enhanced connectivity at all levels.
has improved. The opinions and feedback of
the consumers, companies, and the product online
become one of the salient features in
customers on the products and services that they use have
are therefore able to listen and respond
designing of strategies for their advantage. Companies
technology and deliver
tothe demands of the customers. For all this to happen, companies use
competitive advantage.
products desirable by the customers to create better
IMPLEMENTING CRM PROJECTs
We have earlier discussed the five key processes which constitute the CRM strategic framework.
But the effective management ofcustomer relationships involves many aspects whicharedifferent
and interlinked and critical in the success ofany CRM initiative (Fig. 10.g).
Simply undergoing the process does not guarantee success ofCRM. The four critical elements
which an organization has to take care of are as follows:

Assessment of CRM Readiness This is very important, as the overall position of the
organization has to be assessed in regard to whether the organization is prepared for the
CRM implementation against the costs and utility. They have to monitor whether their
processes are welldeveloped as compared to other companiesin the market. There are many
in the development of CRM: pre-planning, building a data repository,
identifiable stages
moderately developed, well-developed, and a highly advanced phase. Each of these stages
represents a specific level of CRM maturity and it is characterized by the extent to which
274 CUSTOMER RELATIONSHIP MANAGEMENT

Multiple-channel Performance
Strategy development Value creaion
integrationprocess assessment
process
process process

Shareholder
Business Value
Sales force
strategy Customer •Employee
recelves value
•Business
vision •Value •Customer

proposition
value
•Industry and
A
Outlets

competitive •Value •Shareholder

characteristics assessment value

-Z+wOLHWO
•Cost
H reduction
Telephony A

Value Pertormance
Direct
organizatlon monitoring
Customer
on receives marketing M
strategy -LW A •Standards
•Customer
•Acquisition
•Satisfaction
economics
choice and Measurement
Electronic
customer •Retention
economics A Commerce •Result and key
characteristics

OI<ZZLWJEZGWE
performance
•Segment LWZ indicators

granularity (KPls)
Mobile

Commerce
A

Data repository

IT systems Analysis Front-office Back-office

tools
applications applications

Fig. 10.2 A Conceptual Framework of CRM strategy

Source: Based on A. Payne and P. Frow

Exhibit 10.3 Marketing Channels

Many products like personal computers are sold through
and department stores. In addition,
Stores, large and smal
multiple channels of distribution. They can be bought directly businesses do their different
outlets

from the manufacturer over the telephone, purchases through

by direct mail, or or through based on the
through the websiteofthe company or through compary outlets or agents. Thus,
online store on requirements and use
or
the Internet or through different kinds of retailers, usage -bought either for personal
which may in bulkthe choice of channel structures
varies. The channel
include independent computer stores, franchised computer may range from two to five levels. The simplest is the twWo e
(Cont
 CRM IMPLEMENTATION 215

Exhibit 10.3 (Contd)

in which goods and services move directly from orders for goods from wholesalers directly rather than through
structure

he manufacturer to the cOnsumer without any intermediary. the manufacturers. Finally, a manufacturer's agent can also

un.level structure occUrs in industries where consumers serve as an intermediary between the manutacturer and the
are able to 0rder products directly from the manutacturer wholesalers, making a five-level channel structure. This

it
nd the manufacturer fulfils those orders through its own five-level channel structure may consist of a manufacturer,

ahisical distribution system. This is prevalent in computers a wholesaler, a jobber, a retailer, and the consumer. The
and other electronic products. In this category, today online jobber services the small retailers who are not covered
oles have become very popular. This is done either directly
by the large wholesalers in the industry. Apart from these,
in case of computers or consumer durables there are retail chains in different formats directly handled by

or
Companies
through different online stores which are selling a large range companies or through franchisees. All these channels have
d products. In the three-level channel structure, there are been segmenting themselves to cater to different markets

ratailers who act as intermediaries between the consumers by enhancing the company sales and completing the sales

and the manufacturers. Retallers place orders for products cycle by buying products of the company, making it available

directly from the manufacturers and sell their products to the in markets for the convenience to its customers. In the whole
consumers in different markets. A fourth level is also available process, values are added making the company and brand
where the manufacturer sellis products to wholesalers rather Successful indifferent markets and regions.

than to retailers. In the four-level structure, the retailers place

CRM readiness assessment

C
R
M M
Process 1: Strategy development

Enabling processes
OIZOW
Process 2: Process 3: Process 4:

Value creationMulti channel |Information

|inegration management
M M
G
SOF
Employee engagement

Process 5: Performance assessment

Fig. 10.3 Key elements for organising CRM implementation

Source: Based on A. Payne and P Frow

the customer information is available. It also depends on the expertise and experience of

the CRM managers who know the stages of developmentof CRM. If the organization is in
276
CUSTOMER RELATIONSHIP MANAGEMENT

audit
the early stage it is
them to do an overview
useful for
of the
key CRM
of development, and
to understand its importance
which helps the senior management readiness
processes,
for the enhance its competitive advantagein
an early stageto
company, and buy thesame at
view on its CRM prioritics, and these
markets. A general audit givesthe organization an initial
should beapplicd for better results. For example,
in the
prioritics determine where the cffort
audit wasdone for assessment of CRM readiness and changes
case of a bank, where the
to be necessary in all its processes with
more importance on value creation and
recommended proi
pertormance assessment. For this, a number ofnew
CRM initiatives were identified and
has to be felt between the current position
teams were formed for implementation.Thus, a gap
and the desired position, and emphasis has to be put on each processes. The processes include
strategy development, performance assessment, information
management, value creation, and
the multi-channelintegration as discussed above,in the framework for implementing CRM
with the company
This audit is very valuable to the organization, as the structured discussions
to them in highlighting the areas on
managers around the scorings are extremely valuable
which the organization should concentrate further, in order to improve its performance. CRM
Both these scorings are weighed against the existing scenario and the proposed scenario, so

that it gives them an indication to follow the processes and the conditionsrequired to achieve
those performances through CRM. To extend its response rates, it is also possible to developa
simple web-based programme to collect and aggregate all the information emanating around
the company to give them a better understandingof its rcadiness and advantages derived by
adopting it further.

CRM Change Management To implement a complex large-scale CRM initiative, companies

must grow substantialy as per expected change in its organizational dynamics and cultural
change in the process. Hence, a change management programme is necessary, which can take
care of the dynamics of CRM for its people aswell as processes, because adoptingtechnologymay
not be the only success criteria for the organization. Successdepends on the adopted processes,
and for this, the Seven S Framework tool serves to identify issues relevant to the business. This
framework also provides means to identify the key skills as well as the new skills, if required by the
organization. In all these situations, three recurring change management issues emerged: (1) the
need to establish a senior executive in charge of CRM with expertise and authority, (2)to create
a CRM vision, and (3) facilitate an improved cross-functional team of marketing,IT,and human
resource management within the organization.

CRM Project Management Project management controls the time scales and the budget while
implementing CRM
in the organization. In this, BDN (benefits dependency framework) works
backwards from theproject objectives to ensure that all the necessary changes in the business are
made before CRM technology solution is implemented. Some organizations adopt a large
the
scaleapproach for CRM implementationfocusing on IT, analytics, centralization, and
campaign
management. The emphasis is on an integrated customer database with marketing data marts,
a shared data model, marketing analysis, and data mining tools (such as
propensity modelling
or targeting and riggering activities). There is integration of all the touchpoints/channelswith
feedback loops to the centralized database and a standardization of customer interaction and
service processes. Other organizations find an incremental and a modular approach to CRM
development (focusing on decentralized customer experience management and customer
relationships) which is visualized as the most appropriateamongst all. It tocuses on customer
interaction skills and strategizes on the development of new customer-centric touchpoints and
the ability to build relationships.
Employee Engagement An organization cannot develop and operate its customer focused
systems and processes without the Both change
help of motivated and trained employees.
management and project management are fully dependent on it. In high-demand situations,
the organzaton requires an active engagement and commitment from customer-facing staft,

whose focus is on creating better customer experience. Due to this, most of the organizations
recognize the significant values which employees contribute in their business as they are
instrumental n important processeslike customer service, improving efficiencies, enhancing
consumer contidence, and repeat purchases made by customers. Human knowledge,attitudes,
and behaviourcombined with IT and CRM system need to work effectively for both the user
companicsand the customers who are subjected to it.
 AN APPROPRIATE
CHOOSING CRM SOLUTION
In
any organzation, customer are growing day by day either through phone ines
interactions
or websites. These interactions should be viewed seriously as they are revenue generating in the

Table 10.3 Top 5CRM vendors by market share

Oracle-Siebel CRM on Demand, Oracle E-Business

1
lIS softiware portfolio includes Oracle Siebel CRM, Oracle
Contact Center Anywhere (CCA), Pight Now and the
Suite (EBS), PeopleSoft Enterprise, Oracle
newest flagship product.

SAP CRM SAP CRM

Sales (Sales force automation), SAP CRM Marketing,
Service,
2 SAP CRM System SAP CRM
Center, SAP CRM Web Channel (with E-Marketing, E-Service and E-Commerce)
Interaction

and SAP CRM Partner Channel Management, Saas (Software as a service) CRM Systems

SAP Sales on Demand which is a cloud CRM extension for the company's on premise ERP
and SAP Business By Design which is a full ERP
(EnterpriseResource Planning) application
cloud suitr that includes CRM

3 or cloud computing model. Platform-as-a-service

Sales Force.com Salesforce.com using the software-as-a-service
of integrated third party products
(PaaS)solution called Force.com and managing an ecosystem
in an online marketplace called AppExchange

unique and use the same code base for both on premise and software-as
4 Microsoft Dynamics CRM Dynamics CRM is

allows its cloud customers as wellas its business partners

-a-service (SaaS) delivery models. It

to install server-side code in the Microsoft cloud. This peimiis greaterextensibility for a number of

business processes not supported by some companies.

open source CRM software easy to use product, functionally rich and at a very
CRM maker of
5 Sugar
economical price compared to its competitors

Source: www.top.crm.com
294 CUSTOMERRELATIONSHIP MANAGEMENT

and tries its best to

future. As discussed carlier, CRM collects valuable information enhance
nrt.
loyalty, and reduce costs. It
also enhances the efficiency and
customer satisfaction, service,
CRM implementation,both the IT an
carned by the organization. Therefore, for a successful
organizart
requirements of the
to finalize the
business professionals should be consulted
Following are factors that can beincluded:

price is a veryimportant element but it is not the on

Price In any IT, purchasing decision
must not only consider the costs involved upfront
determining factor. Hence, the organization
but also the long-term costs and the benefits to be achicvedthrough the CRM.A determination
th
therefore has to be made as to what
is to beincluded in the pricc and what not, because
of costs for training, upgradation of systems, and services involved
budgeting is inclusive
the costs have to be taken into consideration except costs for system integration and
Hence,
customization
all

of the software, as these are essential to enhance the usefulness and utiliy i
PCs, notebooks,will also be
the organizations. Other additional equipment, such as servers,
a serious job, because the
required during the implementationprocess. The system integration is

the system cost-effective as the

requirementsor conditions are subject to change.This will make
future IT expenditures are also taken into account.

Clear Business Objectives An organization must have well-defined goals. Other than the
IT department, the other end users like managers must also be involved in the finalization
of the CRM
system. A brainstorming session including all the end users will make the CRM
heterogeneous. Hence, it is important to understand the operations of all the departments - the
processes, generation of data, accessibility,and storage of data. The strengths and weaknesses in

cach approach have to be understoodand all the departments of the organization such as sales,
marketing, and service must also be involved. The employees can prepare a wish list inchusive
of the mandatory requirements which they feel are necessary for better functioning of the CRM
system.A checklist comprisingthe measurable and prioritized requirementsof the organization
can be prepared.Thesebecome the benchmark for future analysis of success of the CRM and
its ROI.

On Demand CRM vs Onsite The CRM deployment, whether it is on demand or onsite, has
its own positiveand as negative implications. For many business establishments, today, a cloud
based software as a service (SaaS)is capableofgiving access to a sophisticated and costly, hassle
free equipment at a lesser costs. The companies need not get bogged down by investing in costly
infrastructure or any elaborate supportsystem. The SaaS providerhas a system software running
at his place and therefore implementing the CRM software becomes easier for the organization

through cloud computing. Large-scale organizations, which have large IT infrastructure and
staff in its payroll prefer to purchasethe CRM software and hardware by themselves, while mid

and small-scale ones prefer a third-party system integrator, solution provider, or a consultant to
take care ofall the processes including runningand maintainingthe system. This is because of the
trust in the expertise of the service provider. Most service providers are well-versed in installation

processes, are aware ofindustry-specific requirements and prevalent competitionin the market.
With their rich experience, they can guarantee a foolproofservice to their customers. Based on
thechangingmarket conditions, they can modify the parameterssuitable to the business in short
term and long-term basis.

Scalability CRM is being implemented with an objective to enhance growth in business and
hence its scalability of growth after the execution of application has to be measured. Hence, all
the contenders or vendorswho are vying for the busincss must be put on trial through evaluative
 CRM IMPLEMENTATION 295

of their
software.The user focus group
programmes should be encouraged toexamine and check
further,
out the potential tools

Vendor Strength and Reputatlon The CRM may be an on-demand solution

or an in-house
one, the organization must study the reputation of the vendors before shortlisting then. The

previous customers oftheservice providers can be studicd to find out their experience with regard
to scamless functioning, strengths and weaknesses of the application, ctc.Umost care must be
taken to the arcas that provide the nccessary support by being flexible to any upgradation necded
in the future. Most applications are evaluated on the basis of their
responsiveness and uptime
rate.The vendor's expertise and experience in specific verticals similar to the typeof businesshas
to be taken into consideration. The vendor must be clearly informed of the specific objectives,
business processes, and terms to determine the viability along with the problem that may emanate
in the future. The CRM partner must also be finalized based on his
past performanCe,records
in the competitive markets, and survival in tough situations.

Thus, the decision has be very pragmatic and has to be taken by reviewing ofall the above
to
objectives, requirements, and expectations and processed methodically before implementation.

A final decision whether to buy or access through cloud computing is made after studying the
above-said conditions. Thus, CRM usage can be maximized, dividends enhanced, and costs
reduced (Exhibit 10.9).