Abstract
Larger companies have for some years used customer relationship management (CRM) systems as part of a strategy aimed at increasing turnover and market share, but the benefits of these systems for small businesses have often been viewed with skepticism. With more limited financial and human resources, the successful acquisition and implementation of systems of this scale can be problematic for small companies; yet the potential benefits are nevertheless attractive to companies that are often continually striving to increase market share and profitability, whilst retaining a firm control on revenue costs and capital expenditure. This chapter examines two case studies where the introduction of a new CRM system was the main component of a company-wide systems upgrade or replacement. The two case studies examine the issues that have produced different degrees of success at these companies, which not only implemented new systems but also addressed the required upskilling of staff and re-engineering of core business processes.
TopNew Customer Relationship Management System At Pegasus Retirement Homes, Cheltenham
Background
Pegasus Retirement Homes plan and build private houses and apartments for sale to retired people throughout the UK from a central base in Cheltenham. In 2002, as part of their expansion programme, they wished to retain a central office in Cheltenham and use staff working from home to manage their regional operations. This would require a significant improvement in their communication systems and project monitoring capabilities. If their business processes were not improved, their expansion plans would inevitably be adversely affected. In addition, Pegasus required slicker customer service and were seeking a new outsourcing arrangement with a new fulfilment house.
At the time the company embarked on the project, there were almost 5 million owner-occupier households of retirement age in the UK. In contrast, there were only 500,000 properties geared for living in retirement – otherwise termed “sheltered accommodation”. Of these 500,000 properties, only 70,000 had been built by private sector companies, and these companies were then building only 2,500 new units a year. There was thus considerable scope for the private sector to help meet the shortfall in sheltered accommodation for some years.
In the private sector, the market leader provided about 75% of the 2,500 new units constructed each year. The remaining 25% was provided by a number of companies, and Pegasus was one of the biggest of these. Pegasus sold 44 properties in 2001 and 84 in 2002, 98 in 2003 and 140 in 2004, and the sales target sales figure for 2008 was 700. The aspiration was to increase market share to 10% in 2005 and 20% in 2008. Such rapid expansion would traditionally involve setting up new branch offices and decentralisation through geographical distribution, with loss of control and spiralling costs being serious threats in a period of rapid growth. The company wanted to address this issue and expand its business without exposing themselves to these threats. At the same time, the opportunity to embrace new technologies offered additional incentives to streamline the existing operations.
Key Terms in this Chapter
ISO 9002: A standard developed and published by the International Organization for Standardization. It is a non-industry specific certification for quality assurance in production, installation, and servicing.
Best of Breed (BOB): An information systems strategy that involves finding the most appropriate software system for each function in a company or organization. It is an alternative to acquiring an Enterprise Resource Planning system that supports all (or most) business processes.
Virtual private network (VPN): A technology that allows a company’s remote users and branch offices to securely access their corporate systems, providing a safe and encrypted connection over a less secure network, such as the internet. It enables users to send and receive data across public networks as if their computers or hand-held devices were directly connected to the private network.
Customer Relationship Management (CRM): The combination of sales and marketing activities that focus on fulfilling customer requirements. There are many standalone CRM software systems, but they may also be part of an integrated Enterprise Resource Planning system.
Investors in People (IIP): An award to a company or organization that recognizes high standards in the management and development of its people. From 1991 to 2017, Investors in People was owned by the UK Government but was transferred in February 2017 to the Investors in People Community Interest Company.