CUSTOMER RELATIONSHIP MANAGEMENT

Strategic Issues in Customer Relationship Management (CRM) Implementation.

Abstract
A number of Customer Relationship Mana ement !CRM" implementations has ro#n $ramati%all& in re%ent &ears' Ho#e(er) fe# a%a$emi% stu$ies of the issues asso%iate$ #ith the implementation of the %on%ept are a(ailable' In this paper) the author offers a mo$est %ontribution throu h the anal&sis of a %ase stu$& of a CRM implementation at a Unite$ *in $om base$ manufa%turin %ompan&' The %ase stu$& illustrates that CRM is a %omple+ an$ holisti% %on%ept) or anise$ aroun$ business pro%esses an$ the inte ration of information te%hnolo ies' The stu$& also hi hli hts that implementin CRM re,uires effe%ti(e lea$ership) sour%in ) tar etin an$ e(aluation strate ies'

Introduction
In re%ent &ears man& or anisations ha(e i$entifie$ the nee$ to be%ome more %ustomer fa%in #ith in%rease$ lobal %ompetition' As a %onse,uen%e) Customer Relationship Mana ement !CRM" has risen to the a en$a of man& or anisational strate ies' -efinitions of CRM an$ CRM S&stems are #i$e ran in an$ shall be e+plore$ in reater $etail in the ne+t se%tion' .un$amentall& ho#e(er) CRM s&stems %an be (ie#e$ as information s&stems aime$ at enablin or anisations to realise a %ustomer fo%us' In /001 lobal %orporate e+pen$iture on CRM #as estimate$ to be in the re ion of US 2/'0 billion) I-C an$ AMR Resear%h !344/" an$ it is pre$i%te$ that b& 3445) it #ill rea%h appro+imatel& US 236'7 billion -atamonitor !344/"i' Clearl&) an in%reasin number of $i(erse or anisations are a$optin CRM &et sur(e&s are be innin to hi hli ht the potential ris8s' E(en thou h CRM s&stems are pro(in an in%re$ibl& popular %hoi%e for implementation) su%%ess is pro(in illusi(e' One stu$& of 343 CRM pro9e%ts foun$ that onl& 64': per %ent of the or anisations sai$ that the& ha$ a%hie(e$ impro(ements in the #a& the& sell to an$ ser(i%e %ustomers -i%8ie !344/"' Moreo(er) a re%ent an$ broa$er sur(e& estimates that :4 per %ent of %ompanies #ill ultimatel& fail Gi a !344/"' The Gi a sur(e& re(eale$ that; %ompanies enerall& un$erestimate the %omple+ities of CRM) la%8 %lear business ob9e%ti(es an$ ten$ to in(est ina$e,uatel& in the pro(ision of CRM soft#are' <hilst the fin$in s b& Gi a hi hli ht a fairl& loom& s%enario) it is %lear that not all or anisations are fa%in failure' .irst Manhattan are 9ust one of the man& e+amples of $i(erse %ompanies hi hli hte$ b& Ne#ell !3444" that ha(e applie$ CRM metho$s an$ e+perien%e$ su%%ess' It is %lear that there is still a nee$ for further empiri%al stu$ies of CRM ho#e(er) onl& a fe# are a(ailable' The a(ailabilit& ran es from the stu$& of Abselon =an >enne8om an$ >lais$ell !3444" to that of I>M Ciborra an$ .ailla !3444"' It is a ainst this ba%8 roun$ that the author offers a %ase stu$& anal&sis of the sele%tion an$ implementation of a CRM s&stem at a manufa%turin %ompan&'

CUSTOMER RELATIONSHIP MANAGEMENT In the ne+t se%tion the paper %onsi$ers the %on%ept of CRM an$ ho# CRM s&stems are reporte$ upon in the literature' .ollo#in this the resear%h approa%h of a sin le $es%ripti(e %ase stu$& is reporte$) an$ the $ata presente$' The empiri%al $ata is use$ as a basis for an anal&sis of the reporte$ thin8in in the literature in an attempt to i$entif& similarities an$ $isparities bet#een the t#o' This lea$s into the %on%lusions of the stu$& an$ re%ommen$ations for further resear%h'

An Overview of Customer Relationship Management

CRM is a hi hl& fra mente$ en(ironment an$ has %ome to mean $ifferent thin s to $ifferent people M%*ie !3444"' One (ie# of CRM is the utilisation of %ustomer relate$ information or 8no#le$ e to $eli(er rele(ant pro$u%ts or ser(i%es to %ustomers Le(ine !3444"' <hilst su%h $efinitions are #i$esprea$ the& ten$ to offer a narro# insi ht into the oals or basi% %hara%teristi%s of CRM' As CRM e(ol(es ri%her $efinitions are emer in ) #ith an emphasis on the oals) lo isti%s an$ %omple+ %hara%ter of CRM' A%%or$in to Li ht !344/") CRM e(ol(e$ from business pro%esses su%h as relationship mar8etin an$ the in%rease$ emphasis on impro(e$ %ustomer retention throu h the effe%ti(e mana ement of %ustomer relationships' Relationship Mar8etin emphasises that %ustomer retention affe%ts %ompan& profitabilit& in that it is more effi%ient to maintain an e+istin relationship #ith a %ustomer than %reate a ne# one Pa&ne et al' !/000" an$ Rei%hhel$ !/00?"' The i$ea of relationship mar8etin #ithin CRM is fairl& stron an$ has le$ others su%h as Ne#ell !3444" to e+plore strate i% metho$s for maintainin or impro(in %ustomer retention' Another (ie# of CRM is that it is te%hnolo i%all& orientate$' San$oe et al' !344/" ar ue that a$(an%es in $atabase te%hnolo ies su%h as $ata #arehousin an$ $ata minin ) are %ru%ial to the fun%tionalit& an$ effe%ti(eness of CRM s&stems' .or e+ample) .in erhut has 5 million names of repeat %ustomers) ea%h #ith up to one thousan$ attributes) store$ in a $ata #arehouse that %an hol$ 5'7 trillion b&tes -a(enport et al' !344/"' .urthermore) Peppar$ !3444" su ests that te%hnolo i%al a$(an%es in lobal net#or8s) %on(er en%e an$ impro(e$ intera%ti(it&) are 8e& to e+plainin the ro#th of E@>usiness an$ CRM' The in%reasin use of $i ital te%hnolo ies b& %ustomers) parti%ularl& the Internet) is %han in #hat is possible an$ #hat is e+pe%te$ in terms of %ustomer mana ement Tammin a an$ OAHalloran !3444"' The appropriate use) for instan%e) of automation te%hnolo ies) su%h as intera%ti(e (oi%e response s&stems an$ #eb@base$ fre,uentl& as8e$ ,uestion pa es) %oul$ be popular #ith %ustomers an$ hi hl& %ost effe%ti(e Petrissans !3444"' -espite the appearan%e of t#o e+tremes) the ELMS %ase stu$& #ill $emonstrate that in realit& CRM is a %omple+ %ombination of business an$ te%hnolo i%al fa%tors) an$ thus strate ies shoul$ be formulate$ a%%or$in l&'

CRM Implementation Issues

CRM normall& in(ol(es business pro%ess %han e an$ the intro$u%tion of ne# information te%hnolo &) %onse,uentl& effe%ti(e lea$ership is important Galbreath an$ Ro ers !/000"' >e%ause lea$ers monitor the e+ternal en(ironments of an or anisation the& are often the best pla%e$ to set the (ision or strate i% $ire%tion for CRM pro9e%ts' In a$$ition) lea$ers are influential in the authorisation an$ %ontrol of e+pen$iture) the

CUSTOMER RELATIONSHIP MANAGEMENT settin an$ monitorin of performan%e an$ the empo#erment an$ moti(ation of 8e& personnel Pinto an$ Sle(in !/01:"' As CRM rea%hes into man& parts of the business it has been su este$ that or anisations shoul$ a$opt a holisti% approa%h Girishan8ar !3444"' The holisti% approa%h pla%es CRM at the heart of the or anisation #ith %ustomer orientate$ business pro%esses an$ the inte ration of CRM s&stems' Ciborra an$ .ailla !3444" %on%eptualise CRM be&on$ a front offi%e %onta%t mana ement s&stem' .or others) CRM oes further to %onstitute operational) anal&ti%al an$ %ollaborati(e elements Trepper !3444"' Holisti% approa%hes to CRM help or anisations %oor$inate an$ effe%ti(el& maintain the ro#th of $isparate %ustomer %onta%t points or %hannels of %ommuni%ation' Ho#e(er) problems of %hannel %onfli%t ha(e been i$entifie$ #here b& %ustomer e+perien%es $iffer $epen$in on the sales %hannel Peppar$ !3444"' Another implementation issue is that of sour%in ' Man& or anisations ha(e fe# alternati(es but to outsour%e a si nifi%ant proportion of their CRM solution as the& la%8 the resour%es to $e(elop CRM soft#are' A%%or$in to Ma%S#eene& !3444" ?4 per %ent of in house CRM s&stems fail' Timin is also important as $e(elopin CRM soft#are in house %an be a len th& pro%ess an$ there are re#ar$s to those that %an respon$ rapi$l& an$ appropriatel& Ho#le !3444"' CRM is also repute$ to be fa%ilitatin the outsour%in of more business operations $ire%tl& to the %ustomer) hi hli hte$ b& the UPS %ustomer self@tra%8in s&stem #ith annual sa(in s of US 2/?5 million Hamm an$ Hof !3444" an$ b& the enormous sa(in s in Internet ban8in -o#nes an$ Mui !/001"' A%%or$in to Ne#ell !3444" CRM is a useful tool in terms of i$entif&in the ri ht %ustomer roups an$ for helpin to $e%i$e #hi%h %ustomers to 9ettison' .or Ne#ell) 9ettisonin %ustomers is ne%essar& be%ause of the hi h@maintenan%e) hi h %ost in(ol(e$ in maintainin su%h relationships an$ the subse,uent $rain on an or anisationBs profitabilit&' Clemons !3444" estimates there ma& be a tenfol$ $ifferen%e bet#een the most profitable %ustomers an$ the a(era e' The i$ea that &ou %annot ha(e a profitable relationship #ith all %ustomers an$ the pra%ti%e of tar etin %ustomers #ith a $ifferentiate$ pro$u%t or ser(i%e is alrea$& #i$esprea$ in man& finan%ial ser(i%es e' ' ban8in ) insuran%e) %re$it %ar$s et%' It is less establishe$ in man& other business se%tors su%h as manufa%turin ' One metho$ for i$entif&in %ustomer roups is the notion of $istin uishin bet#een transa%tion an$ relationship %ustomers' Transa%tion %ustomers are hi hl& (olatile an$ ha(e little lo&alt&) other than that relate$ to obtainin the best pri%e' Relationship %ustomers ha(e far more potential for lo&alt& as the& are often prepare$ to pa& a premium pri%e for a ran e of reliable oo$s or ser(i%es Ne#ell !3444"' On%e relationship %ustomers are re%ruite$ the& are less li8el& to $efe%t pro(i$e$ the& %ontinue to re%ei(e ,ualit& ser(i%e' Relationship %ustomers are also more %ost effe%ti(e than ne# %ustomers be%ause the& are alrea$& familiar #ith) an$ re,uire far less persuasion to bu& the %ompan&As pro$u%ts or ser(i%es' Pe%8 et al' !/000" are amon st those #ho ar ue that for man& or anisations it #oul$ be benefi%ial to $istin uish bet#een the t#o t&pes of %ustomer an$ fo%us on relationship %ustomers' A%%or$in to Ne#ell !3444" there are often three $istin%t t&pes of relationship %ustomers; the top) mi$$le an$ lo#er roups' The top roup !top /4C" %onsists of %ustomers #ith e+%ellent lo&alt& an$ of hi h profitabilit& for the or anisation' CRM is nee$e$ to retain an$ offer them the best possible ser(i%es in or$er to a(oi$ them $efe%tin to hun r& %ompetitors' Mi$$le roup %ustomers !ne+t

CUSTOMER RELATIONSHIP MANAGEMENT 54 to 74 C" are ones $eli(erin oo$ profits an$ #ho sho# oo$ potential for future ro#th an$ lo&alt&' These are the %ustomers #ho are probabl& i(in some of their business to %ompetitors' The i$ea is to use CRM to tar et mi$$le roup %ustomers effe%ti(el& as the& are the reatest sour%e of potential ro#th' Lo#er roup relational !bottom 54 to 74 C" %ustomers are those #ho are onl& mar inall& profitable' Some ma& ha(e potential for ro#th but the e+pense an$ effort in(ol(e$ in tar etin su%h numbers) hin$ers the effe%ti(eness of ser(i%in e+istin relational %ustomers in the top an$ mi$$le roups' CRM shoul$ be use$ to i$entif& this roup an$ seriousl& %onsi$er the response re,uire$' Transa%tional %ustomers %ontribute either nothin or ha(e an a$(erse effe%t on profitabilit&' The %onsensus therefore is that CRM is in(aluable for i$entif&in e+istin transa%tional %ustomers an$ helpin or anisations to 9ettison them imme$iatel&' This has the $ouble benefit of impro(in the prospe%ts for one or anisationAs profitabilit& #hilst potentiall& offloa$in bur$ens onto %ompetitors' Another $imension is the abilit& to $eli(er the strate & su%%essfull&' CRM strate ies are onl& effe%ti(e if the& $eli(er positi(e out%omes' It is no lon er oo$ enou h 9ust to sa& that &ou are %ustomer fo%use$) but it matters) #hat &ou $o' Ne#ell !3444" $is%usses a ran e of CRM %ase stu$ies that use$ %ustomer 8no#le$ e to $eli(er rele(ant pro$u%ts an$ ser(i%es' >lo%8busters re%o nise$ that their %ustomerAs top priorit& #as the abilit& to rent their first@%hoi%e mo(ie) #hen the& (isite$ a store' The in$ustr& norm for a%hie(in this %ustomer ser(i%e #as aroun$ 14 per %ent' The %ompan& implemente$ an information s&stem %alle$ ACentre Sta eA to impro(e sto%8 a(ailabilit& of first@%hoi%e titles' The Centre Sta e s&stem stores %ustomer $ata to help pre$i%t the li8el& $eman$ for spe%ifi% mo(ies' The %ompan& then sto%8s the rele(ant number of pro$u%ts an$ no# $eli(ers si nifi%antl& impro(e$ a(ailabilit&) #hilst other %ompetitors $onBt' >lo%8buster stron l& belie(es that CRM has enable$ them to remain a mar8et lea$er' The %onsensus appears to be that the fun$amental oal of CRM is to impro(e or anisational profitabilit& throu h effi%ient an$ effe%ti(e %ustomer relations' If the CRM strate & is stru lin to influen%e profitabilit&) after a reasonable perio$ of time) then the or anisation is %learl& failin ' Or anisations in this position shoul$ imme$iatel& %onsi$er %han in $ire%tion an$ a$opt alternati(e strate ies' The position for those or anisations that ha(e faile$ ma& result in a series of %ir%umstan%es that are har$ to re%o(er from' Su%h %ompanies ma& fin$ the& ha(e a $isproportionate number of unprofitable %ustomers that others ha(e 9ettisone$' The path ba%8 to ro#th ma& re,uire far more ra$i%al approa%hes' If a CRM strate & %an be sho#n to impro(e profitabilit&) then the or anisation is ob(iousl& on the ri ht path an$ su%%ee$in ' Companies in this health& position shoul$ a(oi$ %ompla%en%&' The& #oul$ be #ise to $e(ote suffi%ient resour%es an$ time to CRM an$ remember that effe%ti(e CRM strate ies are iterati(e an$ %ontinuall& e(ol(in '

Research Method
The %entral resear%h ,uestion for this stu$& #as; <hat are strate i% impli%ations of the implementation an$ use of CRM s&stemsD In the li ht of this) a %ase stu$& approa%h #as a$opte$ as it enables the resear%her to pose ,uestions relatin to #hat happene$) ho# thin s happene$ an$ #h& Ein !/005"' The %ase stu$& therefore illustrates a Unite$ *in $om base$ manufa%turin %ompan&Bs e+perien%es #ith its CRM implementation' The $ata for the stu$& #as %olle%te$ o(er the perio$ of a &ear be innin at the sele%tion sta e an$ rea%hin %losure at o@li(e' Throu hout the 5

CUSTOMER RELATIONSHIP MANAGEMENT stu$&) $ata #as %olle%te$ (ia a number of %hannels in%lu$in man& inter(ie#s #ith members of the pro9e%t team an$ others #ithin the %ompan&' Inter(ie#s #ere %on$u%te$ #ith the -ire%tors of Sales an$ .inan%e) the Mana ers of Sales) Mar8etin ) IT) HRM an$ Lo isti%s) se(eral .iel$ Sales En ineers an$ Sales A$ministrators' In a$$ition numerous pro9e%t meetin s an$ briefin s #ere atten$e$ in line #ith Sil(erman !/001" #ho states that resear%hers shoul$ fo%us upon #hat people $o) in a$$ition to #hat the& sa& the& $o' -o%umentar& e(i$en%e) su%h as re,uirements spe%ifi%ations #as also %onsi$ere$' Re(ie# meetin s #ere also hel$ #ith 8e& %onta%ts at the or anisation to re(ie# the %ase $ata as it #as trans%ribe$ from note form' This %ombine$ approa%h helpe$ to enerate $ata that #as ri%h in $etail an$ hi h in ri our Miles an$ Huberman !/005"'

CRM case stud

The %ase stu$& #as %on$u%te$ throu hout 3444 an$ raises spe%ifi% issues of one %ompanies e+perien%e of CRM' As this is a one off stu$& it is not inten$e$ to ma8e $efiniti(e re%ommen$ations about CRM) ho#e(er) some of the issues raise$ are of interest in terms of further $is%ussion an$ in terms of possible %ontributions to further %ase stu$& resear%h' ELMS Limite$ is a small to me$ium siFe$ U'*' manufa%turin %ompan&' ELMS are tra$itional in respe%t that the& ha(e a hierar%hi%al %omman$ stru%ture an$ #or8 is %on$u%te$ in $epartments rather than aroun$ %ustomer orientate$ business pro%esses' Communi%ations #ithin mana ement le(els an$ $epartments are per%ei(e$ as e+%ellent an$ the %ompan& %laims to ha(e stron or anisational %ooperation' The %ompan& also feel the& ha(e a frien$l& #or8in %ultureG there is pro(en staff lo&alt& an$ a remar8abl& lo# staff turno(er' ELMS are fa%in in%reasin lobal %ompetition resultin in the loss of some 8e& %ustomers' A strate i% $e%ision #as ma$e that the %ompan& ha$ to be more proa%ti(e an$ profi%ient in their operatin mar8et an$ $e%i$e$ that its front offi%e operations #ere in nee$ of re@en ineerin ' It $e%i$e$ that the best solution #oul$ be to e+plore the %ase for a$optin CRM' The first ma9or issue for ELMS #as the la%8 of 8no#le$ e pertainin to the %on%ept of CRM' Strate i% mana ers ha$ a basi% un$erstan$in of CRM' The IT $epartment ha$ little time to resear%h CRM or to $e(elop soft#are solutions as it #as often o(erstret%he$ an$ stru lin to maintain e+istin s&stems' The Sales an$ Mar8etin $e(ote$ little time to the %on%ept CRM as the& #ere in%reasin l& bur$ene$ #ith tr&in to meet %ustomer re,uirements #ith fairl& ineffe%ti(e a$ ho% support an$ %ommuni%ation s&stems' Thus it #as $e%i$e$ to use e+ternal %onsultants to a%,uire 8no#le$ e of CRM' The first sta e of %onsultan%& #as to e(aluate the position at ELMS an$ e+plore the %ase for a$optin CRM' ELMS #ere $issatisfie$ #ith the out%ome of the initial %onsultan%& for the& belie(e$ the fin$in s faile$ to tell them an&thin the& $i$nBt alrea$& 8no#) pro(i$e$ little in the #a& of 8no#le$ e about CRM an$ pro(e$ to be a fairl& e+pensi(e e+er%ise' ELMS $e%i$e$ to en$ the %ontra%t an$ to see8 an alternati(e approa%h' The %ompan& $e%i$e$ that a more %ost effe%ti(e an$ pro$u%ti(e strate & #oul$ be to a%,uire more CRM e+pertise #ithin the %ompan&) $espite the e+istin #or8 pressures' A small pro9e%t team #as %reate$ in%lu$in a strate i% mana er an$ personnel from Sales an$ Mar8etin an$ IT' The&

CUSTOMER RELATIONSHIP MANAGEMENT #ere as8e$ to a%,uire 8no#le$ e of CRM an$ #ere i(en a$$itional trainin at a ran e of resi$ential %ourses' The pro9e%t teamBs first $e%ision #as to sour%e a CRM pa%8a e$ soft#are solution an$ the& entere$ into ne otiations #ith t#o soft#are (en$ors' After ne otiations an$ $emonstrations at the %ompan&) a (en$or #as sele%te$ an$ a pa%8a e %hosen' In a$$ition the (en$or #oul$ be use$ to pro(i$e a ran e of a$$itional ser(i%es in%lu$in installation an$ minor %onfi urations' Unfortunatel& the ELMS CRM sour%in strate & #as limite$ in man& areas' Too man& members of the pro9e%t team faile$ to be%ome suffi%ientl& a%ti(e in the sele%tion pro%ess' -espite initial trainin ) the Sales an$ Mar8etin pro9e%t team members still la%8e$ 8no#le$ e of the full impli%ations of CRM in relation to their business re,uirements' The& faile$ to appre%iate the nee$ to e(aluate the soft#are from a business perspe%ti(e) per%ei(in the e+er%ise as a te%hni%al issue' It #oul$ also be fair to sa& that the& put too mu%h trust an$ faith in (en$or assuran%es an$ (erbal promises) perhaps be%ause the (en$or %onta%ts #ere fello# sales representati(es' The IT mana er la%8e$ the e+pertise to suffi%ientl& perform the ne%essar& e(aluation of the business re,uirements an$ #as primaril& %on%erne$ an$ fo%usse$ on the te%hni%al issues pertainin to the soft#are' After sele%tin the (en$or an$ soft#are pa%8a e) the CRM pro9e%t team #as mana e$ b& the Sales -ire%tor an$ the IT Mana er' The team #as e+pan$e$ to in%lu$e more personnel an$ #as responsible for business pro%ess %han e) mi ration a%ti(it&) testin ) implementation an$ the initial maintenan%e of the soft#are s&stem' The first ma9or problem for the pro9e%t implementation team #as the sele%tion of the pro9e%t team itself' The pro9e%t team #as sele%te$ at ran$om an$ %ause$ some $is%ontent' Un%hara%teristi%all& for ELMS) some of the e+%lu$e$ staff felt un$er(alue$ b& senior mana ers) others felt the& la%8e$ influen%e an$ ,uerie$ the metho$ for (aluin their intelle%tual %apital' Some of those #ith hi h le(els of pertinent 8no#le$ e) su%h as sales en ineers) $i$ not feel en a e$ or empo#ere$' This resulte$ in a fear of CRM) that it #as about effi%ien%& or %ost %uttin e+er%ises' This resulte$ in a per%eption that CRM #oul$ repla%e or $e@s8ill their 8no#le$ e an$ %ontributions to the or anisation an$ result in staff re$un$an%ies' In realit& the sele%tion pro%ess an$ la%8 of initial %ommuni%ation #as more $ue to the ine+perien%e of pro9e%t mana ement #ithin the %ompan&' The pro9e%t team faile$ to respon$ to su%h %on%erns imme$iatel& an$ althou h the fears #ere ultimatel& mispla%e$ an$ later resol(e$) this #as a fairl& unfortunate start to the pro9e%t' The %onse,uen%es of failin to en a e 8e& sponsors resulte$ the initial sta es of the CRM pro9e%t bein impe$e$' .or ELMS the CRM s&stems mi ration #as a %omple+ operation' The mi ration e+er%ise relie$ hea(il& on the %ommitment of the 8e& emplo&ees to resol(e issues su%h as the effe%ti(e %leansin an$ %o$ifi%ation of %ustomer relate$ $ata' >e%ause of the $ela& in enlistin the support of 8e& staffs) the mi ration e+er%ise $rifte$ ta8in four times lon er than pro9e%te$' After implementin the CRM s&stem) problems be an to o%%ur at the operational an$ anal&ti%al le(el' The %ompan& faile$ to full& appre%iate an$ re%o nise the si nifi%an%e of usin CRM to effe%ti(el& tar et %ustomers' Tar etin profitable %ustomers (ia CRM #as onl& i$entifie$ as an issue after the sele%tion an$ implementation pro%ess' No %onsi$eration #as i(en to ensurin this fun%tion %oul$ be fa%ilitate$ an$ the

CUSTOMER RELATIONSHIP MANAGEMENT %hosen soft#are faile$ to i$entif& %ustomer profit Fones' I noran%e b& the %ompan& an$ ne le%t b& the (en$ors) resulte$ in ELMS implementin a s&stem that #as in%apable of the effe%ti(e $eli(er& of an essential %omponent of CRM' If ELMS #ishe$ to ha(e the fa%ilit& to effe%ti(el& tar et %ustomers the& #ere fa%e$ #ith the prospe%t of ha(in to pa& a$$itional %osts for soft#are %onfi uration or to aban$on the s&stem) #rite off the e+pen$iture an$ sour%e a ne# CRM pa%8a e' A further pitfall of the ELMS CRM s&stem #as the inabilit& of the pa%8a e to inte rate #ith other enterprise appli%ations' This resulte$ in the e+%essi(e $upli%ation of tas8s to maintain multiple s&stems an$ $ata in%onsisten%ies' In terms of $eli(erin a trul& inte rate$ s&stem the %ompan& are fa%e$ #ith the prospe%ts of si nifi%ant a$$itional %osts' Re ar$in operatin CRM) the ne+t issue in(ol(e$ %han in business pro%esses to ali n #ith the CRM s&stem' .or ELMS there #ere $iffi%ulties in mo(in to a pro%ess orientation' The nee$ to re@en ineer #as problemati% $ue to or anisational le a%ies' -espite the appearan%e of e+%ellent %ooperation bet#een $epartments) front@offi%e emplo&ees #ere re ularl& %riti%ise$ for failin to appre%iate the resour%e %apabilities of the %ompan& an$ ma8in promises to %ustomers that %oul$ not be met' >a%8@offi%e emplo&ees #ere also %riti%ise$ for %ompla%en%& an$ be%ause the& #ere often shiel$e$ from %ustomer an$ %ompetitor $eman$s) there #as little in%enti(e to test the %apabilities of the lo isti% operations' .or ELMS) the realit& of $eplo&in CRM #as to mo(e to#ar$s %ustomer fa%in %ulture' >& the en$ of the stu$& this ha$ not been realise$' The transition #ill ta8e mu%h lon er an$ re,uire more effort than e+pe%te$' The resear%h fin$in s hi hli ht that the ELMS CRM strate &) hampere$ b& an ineffe%ti(e soft#are tool is lar el& failin to meet the %ompan& e+pe%tations' The latest re$esi n of the %orporate #eb site is fairl& re(ealin ) it la%8s fun%tions that %ompetitor sites offer su%h asG online ,uotation an$ or$er %apabilities) te%hni%al help se%tions an$ %ustomer %omment fa%ilities' Thus) the %ompan& is stru lin to %ompete effe%ti(el& in its en(ironment an$ is prone to the loss of its relational %ustomers to their sa((& %ompetitors' At the en$ of the stu$&) it #as apparent that the le(el of %ompetition for %ustomers ha$ in%rease$' Some %ompetitors #ere usin CRM su%%essfull& to %olle%t $etaile$ $ata about %ustomers' Competitors #ere be%omin more 8no#le$ eable about #ho an$ #here the relational %ustomers #ere) in a$$ition to the nature of their re,uirements an$ e+pe%tations' Conse,uentl&) the& #ere tar etin su%h %ustomers #ith a ran e of more attra%ti(e oo$s an$ ser(i%es' One parti%ular %ompetitor ha$ use$ CRM to tailor a ran e of offers to %ustomers that #ere inno(ati(e an$ hi hl& se$u%ti(e' Tra$itionall& %ustomers in this se%tor e+perien%e$ hi h installation an$ maintenan%e %osts #ith pro$u%ts' The %ompetitor no# offers %ustomers pro$u%ts free of all %osts in return for e+%lusi(e ri hts to use the pro$u%ts to enerate a$(ertisin re(enue' At the en$ of the pro9e%t) the failure of the ELMS CRM s&stem to $eli(er su%h a response #as a serious %ause for %on%ern) resultin in a ma9or threat an$ e(i$ent erosion of a si nifi%ant mar8et position' In eneral) althou h the ELMS CRM s&stem is fairl& benefi%ial in terms of some responses to e+ternal for%es) its a%hie(ements are fairl& limite$' The soft#are fa%ilitates unpre%e$ente$ stora e %ustomer $ata althou h it is restri%te$ in terms of operational) anal&ti%al an$ %ollaborati(e %apabilities' The strate & has in(ol(e$ a shift to#ar$s a holisti% #or8 ethi%' Ne(ertheless) there is a si nifi%ant amount of business

CUSTOMER RELATIONSHIP MANAGEMENT pro%ess %han e that nee$s to o%%ur to ma8e the CRM strate & more effe%ti(e' It #oul$ appear b& the en$ of the stu$& that ELMS are far from $eli(erin a trul& %ustomer %entri% %ulture an$ are losin roun$ to some of their %ompetitors #ho ha(e'

!iscussion
The %ase stu$& hi hli hts the similarities an$ $ifferen%es bet#een the theor& an$ pra%ti%e of implementin effe%ti(e CRM strate ies' .or ELMS) lea$ership be%ame an important an$ problemati% a%ti(it&' There are lessons to be learnt from Galbreath an$ Ro ers !/000" in terms of the a$(erse %onse,uen%es of not %reatin a (ision or strate i% $ire%tion for the pro9e%t' The pro9e%t mana ement su%%ess fa%tors frame#or8 of Pinto an$ Sle(in !/01:" ma& also ha(e been useful in helpin to o(er%ome the ine+perien%e in terms of pro9e%t mana ement) the failure to a$$ress pro9e%t o#nership issues an$ the nee$s to re%o nise the problems in or anisational %ommuni%ation' .urthermore the nee$ to a%,uire e+pertise in sour%in an$ to learn from pre(ious e+perien%es is also hi hli hte$' To their %re$it ELMS $i$ re%o nise that the& la%8e$ %ertain %ompeten%ies in %ertain areas an$ the& #ere open to the i$ea of see8in e+ternal e+pertise) trainin an$ %onsultan%& #here(er ne%essar&' Ho#e(er) b& the time the& entere$ into their se%on$ sour%in %ontra%t #ith soft#are (en$ors) the& ha$ faile$ to learn suffi%ientl& from the %ostl& e+perien%e of their first' This #as e(i$ent in a number of #a&s' .irstl& ELMS faile$ to ne otiate #ith more soft#are (en$ors to et the most appropriate an$ %ompetiti(e solution' The& $i$ not insist on obser(in the soft#are #or8in in another or anisational settin ) thus missin an opportunit& to learn from a$opters' The& faile$ to trial the s&stem or ne otiate a performan%e@relate$ %ontra%t' .inall&) the& faile$ to ha(e a %ontin en%& strate & in pla%e to resol(e problems or to implement alternati(e solutions' Su%h pitfalls $i$ result in %ompromises in the fun%tionalit& of the s&stem' Ho#e(er) it shoul$ be sai$ that ELMS still belie(e$ that the $e%ision to outsour%e #as a ma9or su%%ess #ith le(els of fun%tionalit& a%,uire$ #ithin a timeframe that #ere far in e+%ess of #hat #oul$ ha(e been a%hie(e$ in house' The resear%h also sho#s that (en$or %laims that CRM %an be rapi$l& an$ effe%ti(el& implemente$ are hi hl& mislea$in ' It is no surprise that or anisations su%h as ELMS are failin to prepare for CRM appropriatel&' The %ase supports the theor& b& Girishan8ar !3444" that CRM is a holisti% an$ %omple+ strate & an$ also supports Li htBs (ie# that CRM in(ol(es business pro%ess %han e an$ IT inte ration) for ELMS this #ill ta8e a %onsi$erable time to a%hie(e' .inall& the empiri%al stu$& hi hli hts the importan%e of tar etin an$ $eli(er& as ar ue$ b& Ne#ell !3444"' Althou h the ELMS CRM s&stem is #ea8 in $eli(erin su%h anal&ti%al %apabilities) e(i$en%e #as emer in that %ompetitors #ere more effe%ti(e here an$ that the& #ere usin su%h %apabilities to poa%h profitable %ustomers'

Conclusion
The results of the stu$& are %ause for %on%ern for the& support the fin$in s of other sur(e&s that sho# a hi h failure rate for CRM' This resear%h #as %on$u%te$ be%ause of the relati(e la%8 of CRM empiri%al stu$ies) parti%ularl& #ithin this business se%tor' This mo$est %ontribution has i$entifie$ an$ anal&se$ some of the approa%hes an$ theories relatin to CRM an$ CRM pro9e%t implementation' The stu$& %onfirms that CRM is a %omple+ an$ holisti% %on%ept re,uirin appropriate business pro%esses an$ 1

CUSTOMER RELATIONSHIP MANAGEMENT inte rate$ s&stems' In a$$ition the stu$& $emonstrates the rele(an%e of the nee$ for effe%ti(e lea$ership) sour%in ) tar etin an$ e(aluation #ithin CRM strate ies' The ELMS %ase is an ar%het&pal stu$& of a CRM implementation that has faile$ to $eli(er in these %ore areas an$ #here man& lessons %an be learnt b& other a$opters' It is an interestin e+ample of the affe%t of CRM an$ ho# it is for%in %ompanies to %han e' -espite a $e%a$e of $e(elopments in respe%t of business pro%ess %han e) s&stems inte ration an$ information sour%in ) it is onl& no# #ith the threat of CRM %entri% %ompetition) tar etin %ustomers effe%ti(el&) that ELMS are e+pose$ b& their in$ifferen%e to %han e in su%h areas' The impa%t of CRM is real an$ the failure to implement it effe%ti(el& seems to be t&pi%al' This is a $isturbin s%enario be%ause of the a%%umulation of fa%tors that no# nee$ to be ta%8le$) the la%8 of e+pertise to resol(e them an$ the la%8 of time in #hi%h to respon$ appropriatel&' Thus there is a reat nee$ for a$$itional empiri%al resear%h #ithin CRM to i$entif& the e+tent of su%h issues) the state of or anisational effe%ti(eness an$ for further or ne# insi hts' This parti%ular resear%h is on oin an$ #ill aim to $e(elop an$ e+pan$ upon the issues raise$ b& %on$u%tin more empiri%al stu$ies'