Abstract
CRM systems offer companies a unique ability to manage their customers more effectively. There is a wealth of benefits to CRM both internally and externally, and if used correctly they can grow a company's customer base and profits. Despite this, the implementations of these systems have a high rate of failure, with companies often spending large amounts of money without gaining anything other than an internal reporting tool. This paper looks at the reasons behind these failures, looking at previous case studies, theories and problems to decipher the main issues. The authors then use a recent CRM implementation as a case study to see how these issues relate to a real life scenario. The research concludes with a ten-step plan which can help academics and practitioners in gaining a better understanding of the implementation issues involved with such complex systems.
TopBackground
Clemons (2000), defines CRM from a customer’s viewpoint and suggest that in essence a tiny proportion of a company's customers will generate the bulk of its profits, “identifying, collecting and keeping these clients is the very essence of customer relationship management” (Clemons 2000:25). However, according to Krauss (2002) a CRM implementation and strategy can only be deemed successful only if it can actually improve customer loyalty. One of the main reasons for failure is the reluctance to put CRM and the customer at the heart of the company. Girishankar (2000) proposes that for CRM systems to become successful companies must take a holistic approach to their implementation.
Research claims that corporate structure, employee involvement and management support are the key factors for the successful implementation of a CRM system (Galbreath & Rogers, 1999; Lindgreen, 2004; Pinto & Rouhiainen, 2001). Companies need to be connected and open to communication while management must be de-centralized and encourage subordinates to innovate since often employees are the ones that can steer the vision of a CRM system. A good project leader will set out a clear mission on what the CRM system will achieve, gain management support, schedule a clear implementation plan, communicate frequently with the end user, recruit a successful well trained team, train employees successfully and gain end-user acceptance once the implementation is finished.
Siddiqi, Akhgar, and Wise (2011) ague that a clear report must be produced and analysed before a formula for success is produced because success depends highly on how the company views and aims to use the system in the first place. Organizations must choose between a customer focused system that allows a personalized service, or a company focused system that is mainly used for analysis and forecasting. It is likely that using a “soft” approach to the system, targeting specific customer in tailored ways will bring the best financial gains, and therefore employee motivation and support. Furthermore, Kotorov (2003) suggests companies must view CRM as a strategy rather than a technology solution.
Key Terms in this Chapter
Customer Relationship Management (CRM): Identifying, collecting and keeping clients.
Training: The action of learning a new skill.
End Users: The people who actually use a particular system.
Case Study: An up-close, in-depth, and detailed examination of an organization.
Implementation: The process of putting a plan into action.
Communication: The means of sending or receiving information.
Leadership: Leading a group of people or an organization.