Customer Relationship Management Systems - Essay Example

Street Address ST ZIP e-mail phone fax Information Systems for Management- Research Conference Paper Relationship Management Systems' or (CRM's) all have one main and quite common characteristic that keeps them all intricately intertwined. This one particular objective, in any of the various software implementations is that of customer relations which will be carefully explored through this research. They all also have one main compromising goal as well, that is to see a company flourish and have an improved potential for growth. This is another area that will be explained through thorough study into how CRM integration actually promotes improved awareness of customers needs and also enhances the company's potential for prominent expansion. Although there will be a good deal of positive emphasis on CRM's there will also include the other view point concerning the challenging areas that need improvements such as: project management, data conversion, customer relationships within the business, and the integrity of the CRM as a whole process. Introduction As stated previously, CRM's projectile aim is to consider the customer/business relationship first and foremost (ORC Macro, 2005). How a CRM goes about providing a company with a successful customer/business partnership is quite simple. It consists of a business process that uses correlating software along with traditional marketing methods such as: sales and other supportive measures to "retain and improve customer loyalty" (Penner & Ginsky, 2005). This type of strategy has proven very promising as a recent survey taken shows that 81% of some of the most reputable corporations have initiated CRM programming in the past three years and now have promising sketches to expand their basic CRM capabilities into 2004 through 2005 (Microsoft Business Solutions 2004, p.4). Factual evidence offers validity that CRM implementation is indeed on the rise and because of it almost 50% of firms utilizing CRM's services have had their revenue stack up very competitively against their competition over the past four years (Microsoft Business Solutions 2004, pp.1-4). Great prospects are available for CRM adaptation, which will soon be understood much more comprehensively through the research in this paper. CRM, in an integral whole part, forms the sound base structure for corporations to improve their already existing software systems. This creates a whole new highway of business which will be discussed later throughout this research project. Another area of focus this research will attempt to explore is the top three competitors which offer the services of CRM. These are: Oracle, Siebel and Sap, three of the most influential corporations offering some of the finest and top-notch software for all levels of companies. The main company focus will be Oracle due to the fact that it happens to be the most prestigious and quantifiable software corporation offering Integrated Customer Relationship Management solutions (Oracle, 2005). It happens to offer the most accurate, up-to-date key tools for customer success and the best thing is all entities within a company can draw on one main data source, if Oracle is the software of choice. Also, another reason the focus is so heavily on Oracle is due to the verifiable ability the software presents in assisting companies with their; "revenue, interaction costs, and customer relations" which stand unprecedented (Oracle, 2005). Study shows that this corporation leads Siebel and Sap, (hands down), quite possibly due to the more user friendly interface of the system as well as the company's validated software track record also. The main purpose and aim of this research is to give validation and provide information into how CRM implementation aids in the long term success of a company. The fact that CRM does provide substantial assistance to companies in regards to building a more personal relationship with each customer, based on their own individual needs, and fulfilling those needs to a satisfactory point is what keeps customers with a company, for quite possibly, the longevity of its existence. Literature Review: Defining CRM History CRM is a strategic business plan designed to minimize excessive costs but increase profitability within a company. By insuring customer loyalty, CRM pulls together all essential information necessary to provide one holistic image of each individualized client in real time (Destination CRM, 2002). There are three key elements to successful CRM: "people, processes, and technology" (Destination CRM, 2002). Also, as previously mentioned, there are three major software dominoes that provide the services of CRM to any and all companies in the business world, who would like it integrated in. Key Aspects of the software Companies Oracle, Siebel, and Sap are the three main competitors. The standing differences between these three software giants have to do with a variable of entities. One marked difference in comparison with Sap and the other two software company's is Saps' interest and movement towards an "on-demand" or an internet web related business focus. This would offer Saps' software technology online, instead of through more traditional approaches and also it would utilize a subscription service fee for what the software would provide the client's business (Hines, 2005). This type of idea puts Sap in high competition with Oracle but basically it will have no threat from Siebel due to the rumored statements of Oracle possibly buying out Siebel and the two integrating as one company sometime in the next year (Hines, 2005). Sap claims that the difference between their software applications and those of Oracle or Siebel is the idea that they are integrating a solution that will provide customers with the ability to sell a product or product service more amicably and efficiently than proposed with any other corporation. "Deployment and payment options will be hosted" which is a key element in what the majority of clients are after (Hines, 2005). Oracle nor Siebel have this type of system implementation so therefore are weakened in marketing strategy by this fact. "Oracle and Siebel offer a mixture of hosted and on-premise alternatives under what they classify as a hybrid model" (Hines, 2005). Sap, however feels customers are going to want to regress back to an "on-premise" familiarity one day in the near future, something that Oracle and Siebel haven't even begun to consider. Organizational Factors to consider A key factor that all three of these software masters do pay careful attention to is, how they can precisely, and matter of factly, incorporate CRM technology into a company efficiently, allowing for employees, and customers as well; to be willing to accept a change of new programming to improve the pre-existing data systems of the business. This acceptable change must be readily welcomed all the way up to the CEO of the company or otherwise one complaint of lack of understanding could cause the failure of the whole process. It would require teamwork, training, tweaking of the new system to test for proper functioning, and an over all willingness to work together for the betterment of the whole corporation, not just one single individual. After all proper training procedures and full comprehension of the new CRM system has been achieved there should be a definite and progressive improvement in the areas of: "sales, customer support, and marketing to make quick yet informed decisions on everything from cross-selling and up-selling opportunities to target marketing strategies" (Destination CRM, 2002). Application Process Another very important aspect of the CMR process involves the choosing of the application itself. Firms must be very particular in the decision analysis of a specific CRM because it needs to fit just right for that specific company. After all, the whole point in integrating a CRM is to provide more improved and highly professional data systems for the employee's to operate and manage but not one so complex that it would cause confusion and unrest within the work areas. Organized teamwork is definitely one of the key ingredients to a sound and secure business and anything other than this is going to create a period of unease within the business which will then lead to time losses and customer dissatisfaction as well. Obviously the intention of CRM is to come to a better understanding of the client and his or her wants and needs so as to create a more developed and healthier customer/business relationship (CRM magazine, 2005). However the steps that are involved in getting this strategically placed within the pre-existing data banks of a company can be difficult and as stated earlier, require a willingness on everyone's part involved to accept the new and upcoming changes. L Technology of CRM When examining the technology involved with CRM it is found that the basics of including it into a company is a little more complex than first thought (Darwin Executive Guide, 2005). The exact type of customer information the business wants has to be analyzed and sorted into an area of a determination process, in order to find a correlation into exactly where the gathered material is going and what its precise use will be. One example of this type of analytical behavior is seen through the establishing of IRA's for banking customers (Darwin Executive Guide, 2005). Specific IRA's are offered to a banking client once the determination has been made of which one is going to match up the best compared to the client's financial life stages with the bank. The steps, taken leading up to the best IRA choice is pertinent in assuring the client is going to be satisfied completely with how the whole process is handled. In other words, CRM can offer banking customers a more improvised and personal plan with regard to mortgage loans, personal loans, and banking products on a more compatible level with what the customer truly wants. "Solid CRM systems", link up all relevant information about a client so that "data flows between all operational systems and analytical systems" to insure that client records can be sorted into concise patterns to allow for pinpointed areas where improvement's are needed to meet the total desire of each individual client (Darwin Executive Guide, 2005). Modern Day Expansion of CRM And Discussion Modern era literature; that is relative to CRM, has distinctly given the general public the insight to feather out the most crucial ideas of CRM in business. Without it's implementation, the variable improvements in customer relations and profitability would not be as considerable as they are now. Therefore, companies would not have as much significant growth nor a high percentage of positive customer business relationships if it didn't exist (Microsoft Business Solutions, 2004 pp.1-4). Oracle, one of the main business software warriors, provides a good example of how beneficial and prevalent CRM actually is to a business. Oracle has been characterized as being the leader in CRM software implementation, offering the most proficient and sophisticated service for businesses in the corporate world. In fact, Larry Ellison, the CEO of Oracle, eliminated one of the companies' top competitors this year, moving his company to the top of the chain in the business environment. This has opened a whole new world of opportunity for Oracle, allowing for the product introduction of "Project Fusion", a software product which integrates all other software designs into one application, excelling in multiple functionality. There is definitely no question that Oracle can offer the most accurate, up-to-date key tools for customer success and the most influential process Oracle can offer is a data source that can be shared from anywhere within the business, fully functional and operative for all areas of a company. "From precisely measuring marketing campaigns, to automatically dispatching field technicians, to remote locations, Oracle has more than 50 CRM-specific applications that help a company address every phase of the CRM cycle" (Oracle, 2005). Discussion concerning Customer Relationships/Business The CRM blueprint, developed from Microsoft Business Solutions in 2004 duly expresses that there is verifiable proof CRM strategies do indeed fill in the missing pieces, of the customer relationship puzzle, within a company. With CRM, as a strategic back up plan, there is a stronger guarantee of maintaining a strong hold on existing customers due to the fact that they are happy and well- satisfied with the product and or services being delivered to them, stemming from the utilization of CRM implementation (Microsoft Business Solutions, 2004). This strategy allows for customer focused companies to be able to attribute more of their time into providing quality services for their existing customers instead of having to acquire new ones to replace the ones who have left to go with another company promising more enlightening services. Because of all the researched documentation, conferences, business meetings discussing proper handling of customers, etc, the modern day way of looking at how to build a business with a secure longevity in customer relations has turned to an attempt to develop that relationship beyond the original thought processes of it altogether. Now businesses revolve their decisions around the client and actually take the time to hear what the customers opinions are which is offering more profitability than ever before (Penner & Gensky, 2005). Discussion of CRM Productivity and Revenue/Customer Growth/Cost Analysis From the surveys that have been touched on to the magazine articles and press releases, there is well founded evidence that supports CRM incorporation, into existing data systems, within multi-level corporations. CRM increases productivity, improves analysis and reporting, and provides greater cost control and revenue enhancement. Many companies can have the benefits of CRM with minimal costs as well. In 2001, a survey was held by, The Data Warehousing Institute, giving conclusive evidence that approximately 50% of businesses incurred "CRM project budgets" minimal than $500,000 which would actually dignify CRM as a median project cost well worth the invested funds (Darwin Executive Guide, 2005). However some businesses budgets were well over the ten million dollar marker. This could be due to a misinterpretation of CRM or possibly mishandling of funding by investing in additional software that was not necessarily needed. Furthermore, as to date, there has not been one project implementation that has been correctly priced in the initial start up phase. This has lead to misinterpretations in final costs which ultimately have had a major impact on the financial structure of many businesses. "Gadgets are expensive, require costly maintenance, and more than likely will become impractical in the long run, adding more reasons to the possibility of failure" (Howery, 2005). On the other hand, there are substantiated surveys that also have been done showing quite the opposite of costs and which are leading to more quantifiable evidence of more businesses incorporating CRM despite any misgivings or cost misjudgments. One survey, done on some of the most provincial and fastest growing US corporations, showed that 81% have already initiated CRM programs into their work environments since the past three years and also have plans to expand on their existing CRM software capabilities (Microsoft Business Solutions, 2004 pp.1-4). This is something that was briefly touched on in the beginning of the research of this paper but now is at a stage where it has been proven to be factual and evident among many businesses, big and small. "These firms have achieved 46% faster revenue growth than their competitors over the past five years" (Microsoft Business Solutions, 2004, pp.1-4). As it was stated previously in this research paper, CRM incorporation has to be accepted by everyone within the company in order for it to have a 100% supportive effect. CRM must be convincing so that change will be considered a good thing and beneficial to the integrity of not only the company but of those who will be utilizing the CRM software. While some small and average size firms often use web based CRM for "minimal expenditure", larger companies will pay out millions of dollars to purchase, install and customize the technology required to support CRM initiative (Destination CRM, 2002). The following diagram shows reasonable explanation of how CRM starts up to increase productivity, the cost of maintaining it, the decision making that is carried throughout it, and the effects it reverberates for companies implementing it. (Business Week, 2005). Obviously, we have now learned that CRM is intended to learn as much about the client as possible. As the diagram emphasizes, "People and Processes" play a direct role in the "Partnership of Relationship Management" (Business Week, 2005). If the marketing strategies in the diagram are followed then progress and revenue for a company will excel but if it isn't followed or a customer or even an employee lacks understanding of the concept then it will cripple it from within flowing failure outward as well. This diagram shows that proper management, sales automation and service automation, organization as a whole process, individualized customer respect, cost-effectiveness, and correct decision making skills will all lead to the improvement in any company, which is the hope and future of any business which is why software corporations such as: Oracle, Sap, and Siebel will always have a product that can sell, a product with promise but needing integrity throughout to succeed. References Page 1. Business Week, 2005 'CRM Applications Serve Employee's, Customers, and Partners' [online] accessed at http://www.businessweek.com/adsections/care/relationship/crm_applications.html 2. CRM Magazine, (2005) 'An opinion Research Company' Medford, N.J. USA 3. Destination CRM, (2002) 'What is CRM' [online] accessed at: http://www.destinationcrm.com/articles/default.aspArticleID=1747 4. Darwin, (2005) 'Customer Relationships Executive Guide' [online] accessed at: http://www.guide.darwinmag.com/technology/enterprise/crm 5. Hines, Matt (2005) 'Sap promises twist on hosted CRM' [online] accessed at: http://www. News.zdnet.com/2100-3513_22-5833581.html 6. Penner & Ginsky, (2005) 'Oracle Press Release' [online] accessed at: http://www.oracle.com/corporate/press/2005_jun/crmguru_orcl_final.html 7. Microsoft Business Solutions (2004) 'CRM Blueprint: How Customer-Focused Strategies and Solutions Drive Productivity' [online] accessed at: http://www.whitepaper.wstonline.com/shared/write/collateral/WTP/2956_30702_26933_CRM_Blueprint_whitepaper.pdf 8. Oracle, (2005) [online] accessed at: http://www.oracle.com/applications/crm/index.html 9. ORC Macro, (2005) 'An Opinion Research Company' [online] accessed at: http://www.orcmacro.com/Management/Customer/crms.aspx Read More