Evaluating the Use of CRM Applications in B2B Businesses - Research Paper Example

There are potential risks associated with CRM implemented and they need to be addressed in the two critical phases i.e. go live phase and inproject phase (Fotouhiyehpour 2008). There is a need for the identification and classification of the potential risk factors in order to eliminated, prevented or controlled. There are several risk factors which are associated with the CRM. This research entails the classification and explanation of the vital aspects that affect the CRM implementation in business to business markets B2b as they have complex system of interaction (Fotouhiyehpour 2008). One of the suggestions is the hierarchical model for the assessment of organizations that are opting for the CRM system, which is based on six basic dimensions and seventeen secondary dimensions with forty eight indicators. Then we have discussed the following innovative aspects of willingness to give out the more reliable model for the assessment (Fotouhiyehpour 2008). The consideration for the business network was taken for both as an indicator and for assessment criterion as well. The data is processed and evaluated by analytical hierarchy process (AHP) to get the best direction for the implementation of the system. The above mentioned model has been utilized in order to study the business cases and used the associated criterions well (Fotouhiyehpour 2008). Introduction The global competition has developed the demand for several organizations to become customer- orientated for the last few years now. According to Bull, in 2003, the organizations are making strategies for the building up of CRM. The organizations are focusing on customer orientation for the development of information system i.e. CRM. We can precisely consider business to business B2B, e commerce into the businesses support for marketing, selling and buying along with products and services (Fotouhiyehpour 2008). According to McGaughey, 2002 the trading partners have found it vital to use extranets, intranets for establishing communications and transactions among them (Fotouhiyehpour 2008). According to (Fotouhiyehpour 2008) the networks have played a vital role in the achievement of many B2B organizations and so they have arisen the need for relationship concepts to act as a base for Business Model like relationship marketing or CRM., the Networks have been complex for the business markets as they have started think for customers rather than products (Fotouhiyehpour 2008). The managers have found more profitability and sustainability in the generation of revenues by developing customer relationship, According to (Fotouhiyehpour 2008) all this is resulted from a shift in the marketing environment. CRM has enabled the understanding of customer’s requirements in a better way. There are monetary and Strategic flaws associated with the risks that have been the consideration for many researchers, when it comes for several organizations to opt for E-CRM by the acting forces of environment (Fotouhiyehpour 2008). US$1.9 billion according to ( IDC and AMR) was estimated in 1998 in the name of Global Corporate expense on CRM, according to the forecast it is further going to rise by 2004 up to US$ 23.5 billion, according to Data monitor, 2001 (Fotouhiyehpour 2008). The increasing number of organizations is going for CRM with the underlying potential risks that are associated with its adaptation. The implementation of CRM for organizations has become trendy but the illusion of high succession is there with it. According to Dickie, 2000, a study of 202 CRM projects revealed that level of desired results in organizations was achieved by 30.7% only. Whereas, Giga, 2001 reports that a recent survey was conducted which showed that estimate 70% of organizations will not meet their targets (Fotouhiyehpour 2008). Moreover, the Giga discloses the fact that Organizations does not take the complexities of CRM seriously and their blurred business objectives make them invest highly on the implementation of CRM software. In order to implement CRM, there is a requirement for performing in depth analysis that whether the organizations are compatible with CRM. There are several failure factors in Giga’s survey that includes lack of information, poor performance for information update, then the organizations which take the risks of CRM integration very carelessly and mishandling the business processes and integration systems disbelieve (Fotouhiyehpour 2008), and impropriate knowledge of implementing CRM are some of those threats that are related with CRM. The organizations need to do an in depth analysis before adopting CRM. Development and measurement for Leveling CRM implementation There are several references that provide a framework so that a workable model for e-CRM compatibility can be developed. According to Chen and Popovich (Fotouhiyehpour 2008), there are three acting variables which can affect major dimensions which are dependent on them. Ocker & Mudambi came up with the two basic queries (Fotouhiyehpour 2008): What is an organization’s present capacity? What shifts are needed to be implemented before opting for CRM in an organization? Our emphasis in this research is to create an atmosphere where we can understand the effects of various uncontrollable factors on CRM, so that they could be categorized and measurable. The basic research queries which have arisen from the study of this research are (Fotouhiyehpour 2008): Q1- What procedures and levels of readiness are there in an organization to adopt e-CRM? Q2-How the variation in the procedures and levels are being understand to adopt e-CRM in line with the expected objectives? Q3- What are the differences among organizations when it comes to their measures and levels of readiness? Starting with the first aspect, that is People’s factors effect, the two important dimensions of the readiness are considered. Firstly, the Changes, that are need to be implemented when analyzing readiness for change. The other consideration is the organization’s present capacity which entails the cultural readiness. Here the two conditions ‘as it is’ and ‘to be’ are going to be believed when it comes to the whole process and organization structure. Whereas, there is a need to see the organization’s compatibility for accepting the changes with the combination of enhancement, and maintenance in business process. Here, the essential part is the firm’s capability for improvement in process should be considered. Then comes the third acting variable which affects directly is the Technology, it can be measured by its availability and affordability for organizations. According to Harvard reading model (Fotouhiyehpour 2008), these are the two vital tools for measuring Technology in firms for change. A single variable cannot be relied by two major dimensions solely. The organization’s strategic compatibility has to deal with all the three effecting variables, as the main hub of CRM is based on the strategic course of the organization (Fotouhiyehpour 2008). The customer’s factors that effects the whole model as the organization comes to become customer orientated leads to CRM. It is considered to be the vital factor of CRM. This model is based on the following six dimensions (Fotouhiyehpour 2008): Strategic and Marketing Factors Corporate principles Change Management of Sales Customers information and interaction Technological awareness and advancements Business Arrangements. When we talk about the organization’s compatibility for CRM and e- business adoption, the related researched literature has discussed the acting success factors which could be in go-line stage or in the implementation. Various factors can adversely influence the compatibility of organizations. So, they need to control and assess them throughout the whole process till the implementation of CRM. Let us go through the factors in detail now. Strategic and Marketing Factors As per Jelassi & Enders and Ocker & Mudambi (Lehmkuhl 2014), the organizations find it very important to come up with the strong strategies that could smoothen the implementation of any new information system and its integration e.g. CRM, ERP in an organization. Moreover it is also declared that the vital strategic factors for the readiness are orientation to compile customer focused business strategy, leadership, management assistance and supporter. As the definition of relationship management strategy is the very first initiative in the implementation of successful CRM, this is based upon the customer value and organization’s profitability (Lehmkuhl 2014). A research illustrates three major variables of e-businesses strategies including external forces from environment and market, value establishment and strategy preference and firm’s structure and organization (Lehmkuhl 2014). There was a focus on the advantages and disadvantages that are associated with the acceptance of e-commerce within aggressive forces (Lehmkuhl 2014). They focused on the internal and competitive areas along with customer. There are various definitions regarding strategic sub dimensions but some of them are avoided as they are going to be covered in other categories like change compatibility and business structure inclination. Here we have built up the sub dimension of the Strategic readiness category as ‘customer orientation’ of the business; we have also analyzed the financial and commercial reimbursements that are connected with e-CRM implementation and competitive advantages with it. The following are the indicators for each sub dimension (Lehmkuhl 2014): Customer orientation of the business Customer’s compliance Customer’s satisfaction measurement To entertain requirements of the client/customer To analyze the financial and commercial advantages of e-CRM Firm’s capability to enhance profits from customers loyalty Firm’s capability to boost up profits by customer’s demand Organizational competitive benefits of e-CRM adoption The after effects of sales services and customer services quality on competition The effect of customer information Competitor’s CRM Corporate Culture As per (Lehmkuhl 2014), the perspective, attitudes and empowerment are the aspects of culture and they are the sub dimensions of social dimension of CRM adoption compatibility. The domain knowledge and communication with the stakeholders are included in the social dimensions. The research defines corporate culture as the blend of organization culture and investors cultural values. We can say that the firm’s compatibility for adopting e-CRM and the investor’s acceptance are considered to be the sub dimensions of corporate cultural capacity. The following indicators are listed below (Lehmkuhl 2014): Organizational culture Organization’s employees average age The height of education in the organization The trust level of the employees in e-CRM The level of domain know how in the organization The investor’s acceptance Past support of the investors for Technologies Awareness and mind sets of information technology of the investors Knowledge and Interactive Relation with the Customer The motivating advantage has been one of the CRM elements in order to increase the interaction with customers (Lehmkuhl 2014). We know the complexities of relationship in B2B and B2C models but even more detailed study of the factors and criterions must be conducted for that firm which is thinking to opt for CRM. The other idea is the use of internet as a promotional tool provides lot of information to the customers. The customers in a way are adopting CRM as they become a part of newly established relationship network. The sufficiency and the effectiveness are the sub dimensions of customer’s aspects of compatibility for the organization. Customer Information Process (Chong, Man et al. 2011): Sufficiency of the existing process the relationship network and the knowledge of customer organization The adequate use of customer information in decision making IT and Marketing Interfaces (Chong, Man et al. 2011): Using website for promotional purpose via internet To develop a well-equipped website with customer orientation The supervision of the website on regular basis to keep it updated The interaction among customers and organization through internet Customers Organizational Adoption (Chong, Man et al. 2011): The customer approval of information technology The customer’s acceptance in the establishment of new way of relationship The availability of the resources and infrastructures of information technology in the customer’s surroundings. Core Component of an ERP CRM is considered a core component of an ERP, as it demonstrates customer service improvement by providing tools to gain customer loyalty. Moreover, CRM also provides marketing campaigns for targeting customers to spread product awareness. Financial (Chong, Man et al. 2011) Management is also a core component of any ERP solution, as it is the most frequently used component. Likewise, FM incorporates all-purpose ledger, accounts receivable, accounts payable, fixed asset management and billing. As the mid-sized companies tends their way to enter in the international market, the package supports for multiple currencies along with regulation requirements for U.S and other countries. (Chong, Man et al. 2011) Supply chain management is on top of the list apart from other ERP packages, as it enhances the flow of materials via a supply chain. It is possible by managing, planning, scheduling, procuring and fulfillment functions that are utilized for optimum service levels that leverage maximized profitability. Comparatively, Business Intelligence (BI) is a new package, as it provides new opportunities for organizations to get optimal performance. (Chong, Man et al. 2011) A BI tool facilitates to share and analyze data extracted from a unified repository. Likewise, the data is utilized to make informed decisions by executives, line managers, human resource professionals and accountants as well. Therefore, everyone in the organization is empowered to make informed decisions, resulting in better alignment of the organization processes with strategic plans. (Chong, Man et al. 2011) Key Performance Indicators (KPIs) are values in terms of numbers that defines the current efficiency level of a process or a key goal indicator (KGI). One of the core components of a CRM is service management, as it facilitates customer service agents with customized scripts for discussion with customers along with giving them authorization for product returns along with a searching facility in a knowledge base associated with support information. (Chong, Man et al. 2011) Marketing has been discussed earlier. Therefore, the overall purpose of CRM is to achieve customer loyalty to gain a competitive advantage by responding to customer via better service management, target them with efficient marketing management and building a database of customers to know them better. (Chong, Man et al. 2011) Implementing customer relationship management (CRM) is a task that is filled with insecurity and change. The successful implementation of CRM depends upon some basic principles and tactics. By implementing CRM, costumer’s satisfaction has been celebrated by the majority of organizations. Some of the changes that occur by implementing a new application are change in work routine, change in knowledge about new application, how people work together, who manages information and accountabilities and data authorization. To make sure successful implementation of CRM application and acceptance by the users ‘The Change Management’ strategy must be followed (Chong, Man et al. 2011). There are many ways via remote users can access the CRM application. The first method is by dialing to remote access server that allows them to establish connectivity directly to the CRM application. Secondly, Virtual private connection can be used that will require user credentials, dialer and Public Switched Telephone Network (PSTN) to establish connectivity. Thirdly, Internet can also be used for establishing connectivity. However, configuration and security reviews are required for allowing a secure access (Chong, Man et al. 2011). Technological Readiness Factors The technological adaptation is based on three basic factors that include CRM application which involves the scope, complexity and the customization, and then the other is IT capability, (Chong, Man et al. 2011) which further includes Project Management, skilled team and Knowledge Management along with data warehouse and the infrastructure. As these terms like customization, integration and complexity are not measurable in quantity so we cannot use them as a tool to assess the readiness for adopting CRM. In this research, the technological readiness is divided into three major parts, technological readiness of the firm, and technological readiness of the state and the level of in- house IT skills (Chong, Man et al. 2011). Technological readiness of the firm Hardware and Software ability Financial resources’ availability State’s infrastructure Affordability In- house IT skills and experiences Legacy software deployment experience The specialized workforce for IT related fields. Business Structural Factors: The organizational structure, business process and incentives are some aspects of business structure. The factor “incentive and rewards” has a good compatibility with change management. Likewise, the processes must be built, mapped and understood to realize process improvements. The business model must be well aligned including profit making model, organizational structure and the value chain of organization and the improvement strategies of the firm as well. We have pointed out the three sub-dimensions for business structure i.e. organizational structure, business processes and continuous improvement: (Lehmkuhl 2014) Organizational Structure The level of flatness in an organizational structure The level of relationship among the levels of organization The effectiveness of defined responsibilities and authorities Business process The adequacy of the planning process Comparing the actual and realizing process The level of inspection Continuous improvement The methodology for improvement Customer’s feedback utilization for improvement The evidence of achieved plans, in the field of processes and practices Conclusion The main purpose of this research was to visualize a framework of several dimensions in order to get an idea for the firm’s compatibility to opt for new systems like e-CRM. This effort on defining a new methodology in assessment of CRM readiness for the business market, results in a systematic approach in modeling like classifying and indicating the major acting variables in the success of a CRM project. In this research, a model of assessment included six major dimensions that were strategic dimensions, cultural dimensions, Technological and business design dimensions, customer and change management dimensions. Furthermore, sub- dimensions and the indicators describe it deeply to see that whether the firms are compatible to be CRM adopter. Then the expanded cultural considerations from organizational culture to the corporate culture were incorporate to understand the employees and investors from a third party point of view. We can say that according to the research, we have concluded that the impact of cultural factor can play a vital role in the succession of CRM system. The detailed coverage of several dimensions helped to get much deeper knowledge. The various factors that cause either rewards or failures for organizations are going to help for the readiness of firms. References CHONG, W.K., MAN, K.L. and ZHANG, N., 2011. An Interoperable B2B e-Commerce Framework for e-Marketing Capabilities. Engineering Letters, 19(3), pp. 223-227. FOTOUHIYEHPOUR, P., 2008. Assessing the Readiness for implementing e-CRM in B2B Markets Using AHP Method. Dissertation, LuleÃ¥ University of Technology. LEHMKUHL, T., 2014. Towards Social CRM - A Model for Deploying Web 2.0 in Customer Relationship Management. University of St.Gallen, Business Dissertations, , pp. 1-361. . Read More