BCO6603 - Assignment 1 CRM - Management Report
Customer Relationship Management – Management Report
BCO6603 - Assignment 1 Word Count - 1463 ID: 3790554 Mustafa H Gunderwala Date: 10th April, 2008 Tutorial: 19:30, Thursday Tutor: Vicky T Lecturer: Stephen Paull
ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Abstract
This paper will discuss Customer Relationship Management and its importance in the current age of Information Technology. It will also review how businesses can utilise technology to help them interact with their customers. The paper will also review how some businesses take the CRM system for granted, by relying entirely on the system & technology to do the job for them and ignoring the most important aspect of the business; the customer.
ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Introduction
Over the past couple of decades, technology has helped various business channels. Enabling businesses and employees to organise their day to day proceedings and finding new ways to ease and accelerate the daily tasks, whilst ensuring its integrity. Customer Relationship Management is a means to help businesses enhance their interaction with customers and to provide products & services to them in the best possible way, along with identifying ways of reducing cost and increasing profits.
The following document will discuss what CRM involves, its benefits for a business and why businesses fail to implement CRM successfully. I will then highlight on one of the prominent CRM systems in the industry, the SAP CRM and its implementation, using an example of one of its users, Dow Corning Corporation.
Understanding CRM
Customer Relationship Management, more commonly known as CRM has various definitions based on company’s perspective and also how the CRM vendors want to market their CRM product. Some companies want to use CRM solely to enhance their customer interaction, where as others are focused on automating their sales and marketing functions. CRM however, as the name suggests, is an approach to comprehensively integrate the various areas of a business (commonly Sales, Marketing & Customer Service) that interacts with the customer. It helps the business to learn about the customer’s needs & behaviours and strengthen the business-customer relationship, with the help of Information Technology.
1 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
The CRM architecture and applications are evolving along with the new technologies, web services and business processes. The new technologies along with the dynamic market place are also forcing companies to have long term relationships with their customers. The company's CRM system is one of the essential resources that influence the level of a company’s success, which involves developing secure relationships with customers and driving profitability. Businesses that move towards CRM either for a technology solution to manage their customer relationships or with the view of up-selling and cross-selling products & services, rather than focusing on their customer, make big mistakes (Mike Kuessner, 2003).
Advantages of CRM
Benefiting from Customer Relationship Management is not just about deploying the right CRM system, but also bending the business focus as per the customer’s requirements. CRM helps a business to understand their customers, ensuring they are served in the best possible way. In other words, CRM helps in recognising the importance of the customer and capitalises on better customer relations. The more the business knows and understands the customer, the more prepared it can be for their needs. Once they are confident about the existing customer’s needs, the efforts can focus on identifying potential customers and growth in the market. Some of the major benefits for Sales, Marketing and Customer Service can be pointed as follows:
Increase in sales by anticipating demands in advance based on historic data. Effectively identifying customer’s needs through capturing the requirements. Up selling options by suggesting new or enhanced products. Effective target marketing designed for specific demographic needs.
2 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Improvement and development of new products & services to acquire a larger marketplace.
Better relations with existing customers, ensuring customer satisfaction and retention.
Misjudgements about CRM
The reasons for CRM system’s failure are not known to be for the system itself, but how the business implements it. As the saying goes, "A poor craftsman blames his tools". Some of the mistakes that businesses make when implementing a CRM solution are;
Focusing on how sales will use CRM, rather than integrating with customer data. Lack of integration with the service departments, not realising the customer relationship also spans post sales.
Expecting the system to develop long term relations with the customer without any retention plans in place.
Not enough planning or testing with a systematic approach.
Things to consider in a CRM package
As with most applications, the choice of CRM software to fit both current and future needs should be considered. A change again in the future can be expensive. When implementing the CRM system, it is important to prepare in advance and have a logical approach in rolling out its features. Some more points to consider in a CRM package are;
3 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Current application’s integration with the new CRM system. Is it possible to upgrade or downgrade as per requirements. Reputation of the CRM vendor, ongoing support costs and training facilities. Handheld connectivity to improve productivity. Import and Export features in the system. Available reports and customisation options.
SAP CRM Solution
SAP Customer Relationship Management solution serves a number of leading companies around the world in over 25 different industries and helps them in making the most of their relationship with the customers. SAP CRM includes a range of features to support the business development in various areas, some of which are Sales, Marketing, Service Support Centre, Web Channel and Communications Management.
SAP CRM excels in the industry because its functionality is deployed gradually and is easily adapted to build unique customer knowledge. SAP allows the business to fully utilise every customer interaction by ensuring every interaction is consistent and appropriate by providing live data about the customer, which includes its history, value and profitability. SAP CRM is the one Customer Relationship Management system, which enforces the value of customers at every stage of the product’s life cycle.
4 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
SAP CRM On-Demand Solution
In early 2006, SAP expanded its CRM application to include an on-demand, hosted service that is available on a subscription basis. The monthly subscription of the ondemand solution can cost US$75 to $125 per user, depending on the features opted by the business. This low cost and low risk online solution enables businesses to quickly get started with easy to use and intuitive web features to improve their sales, service and marketing effectiveness. Easy configuration & administration, instinctive design, quick results along with improved security & performance are some of the other benefits of SAP’s on-demand CRM solution. Businesses also have the option to implement SAP’s On-Premise CRM system, without any data transformation issues and minimum interruption to standard operations or system performance. They will however, require installing the server based software.
Implementation of SAP CRM
Dow Corning Corporation in Michigan, USA, offering over 7,000 products and services, adopted SAP CRM System in 2006 after already using SAP services for over ten years. They began the project in November 2005 with support from a New Jersey based Cognizant Technology Solutions Corp. to help with them rollout the CRM system. The project was divided into two phases, an Analysis Phase (data identification and functionality mapping) and the Implementation Phase (testing and data migration). In order to get the staff appreciation to the new system, the company looked for some quick wins. They established an easy method for sales representatives to instantly qualify sales leads on their Blackberry by keying a few fields on a webpage. Dow Corning’s well organised customer processes enabled a trouble-free rollout of the system.
5 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Dow Corning however, did face some challenges with the SAP CRM implementation. One of the issues was with portal integration security, where the access needs to be granted and the security staff has to manually work on permissions. Data migration was another concern as it took longer than they initially estimated. Data that includes contacts, employees, survey results etc. are loaded in the CRM system as opportunities and can take extended time migrating. According to Dow Corning’s Bill Pritchett (2007), “Data Migration is something that takes a lot of time and we really learned that as we moved through it. Allow plenty of time. If you don't do it quite right, it's something you'll really need to revisit. We're still finding things."
Conclusion
The most important end to this discussion about CRM is that CRM itself is not a technology, even though the technology is required to enable CRM. It is the employees who manage the customer relationships and the technology helps them do so. This can be concluded by using an example of Australia's largest telecom, Telstra Corporation, when they learned this important lesson the second time round when they set to improve its CRM system. With being disappointed the first time with its CRM investment, they decided to improve on the customer satisfaction, as a satisfied customer would itself help them achieve other goals of reducing costs and increasing profitability.
6 ID: 3790554 Mustafa H Gunderwala
BCO6603 - Assignment 1 CRM - Management Report
Bibliography
All About CRM, November 2006, Business Software, viewed on 28 March 2008
Beal, B. Anatomy of a CRM project, 2007, SearchCRM, viewed on 30 March 2008,
CRM Software Guide, 2007, Taming the Beast, viewed on 28 March 2008,
Customer Relationship Management, 2003, Deloitte Touche Tohmatsu, viewed 22 March 2008,
Hitt, J. CRM Benefits and Disadvantages, June 2006, viewed on 28 March 2008,
Kawamoto, D. SAP debuts hosted CRM service, February 2006, CNET News, viewed on 30 March 2008,
Practical advice for business, 2008, Business Link, viewed on 22 March 2008,
SAP CRM Software Summary, 2008, SAP, viewed on 22 March 2008,
7 ID: 3790554 Mustafa H Gunderwala