For the implementation of CRM it is important to know its meaning, to understand what to expect in an implementation in the organization, the main benefits and risks of implementing a CRM are also described, as well as a successful method of implementing CRM, for later, face some realities or problems in the implementation of a CRM, raised by experts such as Gartner and what is their current situation and possible evolution of said technology seen by Gartner's Hype Cycle of Emerging Technology.
Introduction
Due to the global competition between organizations, the need has arisen to establish sales approaches, to attract customers and retain existing ones, change the focus of the business, where customers are a fundamental part of the organization.
The concept of Customer Relationship Management (CRM), at the beginning of the 90's, focuses on improving an efficient and integrated channel, which leads to customer satisfaction and retention, product sales and increased profits.
CRM is focused on predicting customer behavior with respect to the organization. CRM can be defined in a clear and simple way as the way to identify, acquire and retain customers.
The purpose of CRM is for organizations to have a personalized treatment with the market (with their customers), collecting as much information as possible in relation to customers and their needs, to anticipate their wishes and thus create loyalty of them made the organization.
CRM is a customer-focused strategy, trying to coordinate people, processes and technology. The relationship with the client has been revolutionizing, and thanks to the advances in Information Technology, these strategies can be applied in the organization. It is important that the strategy can be implemented gradually, so that the possible success in CRM can be increased.
Methodology
Documents found in the Digital Library of the Instituto Tecnológico de Estudios Superiores de Monterrey, as well as some publications from the Gartner Group, among others found on the Internet, were used to carry out this article.
Content
"Implementation of CRM in the Organization"
For the implementation of CRM in the organization it is important to clearly understand what is the meaning of CRM, as López and Shaw (2002) indicate, the concept of CRM itself is not directly related to technology. CRM is a corporate philosophy that seeks to understand and anticipate the needs of existing and potential customers, which is currently supported by technological solutions that facilitate its application, development and use. In short, it is a business strategy focused on the customer and their needs, not software.
Lopez and Shaw (2002) indicate that an effective implementation of CRM allows improving relationships with customers, knowing them better and allowing to reduce costs in the achievement of new prospects and increase the loyalty of existing ones, which, in both cases, it means higher sales and more profitability for the business.
" Benefits of CRM Implementation "
Shaw (2002) lists the obvious benefits of implementing a CRM:
- A single view of customer data. Information available in real time, immediately. Better knowledge and understanding of customers. Knowledge retention. Reduced loss of potential customers. Standardized, a best practice business effort. Time automation - consuming tasks Competitive and product information at hand.
" Risks of CRM Implementation "
Despite the benefits, Shaw (2002) also describes the risks that may arise, these risks are as follows:
- Implementation difficulty
Enterprise-level CRM solutions have a reputation for being difficult to implement. Such difficulty is influenced by the following factors:
- The CRM initiative was not thought through and planned The information is inaccurate, not available or distributed in various formats The business processes and workflow are not properly defined and aligned with the inputs required by the system. Efforts get bogged down in getting the required integrated systems. Technology architecture requirements were underestimated. Inter-office policies and established organizational structure make implementation difficult. CRM and other business initiatives require cooperation and participation across business units.
- Expensive. Dependence with WEB. About automation. Effectiveness not guaranteed.
Hansotia (2003) defines three components for a successful CRM implementation:
1. Design of the strategy and organizational agility.
The key changes for the deployment management team are:
- Ensure that all members of the group understand and accept the CRM strategy Create a learning organization, where CRM will become its main competence Create an organizational culture that accepts changes and can adapt to new processes Ensure that Marketing provides analytical leadership in the organization to identify and design key initiatives in CRM based on customer knowledge Ensure that marketing and technology work together in the development of customer databases that provide a complete view of all customer interactions.
2. Planning and Analysis for the execution of CRM.
- Data availability Customer segmentation Customer Value Scorecard (CVS)
3. Execution of interactions with customers.
Technology is a key enabler in the execution of the CRM strategy. Organizational agility and careful planning, and all the analysis as well, however, precede the management of customer interactions. Assuming that a company has addressed these problems, CRM execution technology often presents a significant challenge in systems integration. Essentially the point of interest is in understanding how the rates of customer segments change over time.
"Problems in the Implementation of CRM"
Now in the implementation, Gartner Group affirms that 65% of CRM projects fail, while Kolsky (2004) says that 55% of the time they fail and explains that the reasons may be the following factors:
- Technology that is linked to erroneous business processes Paying too much for software instead of focusing on buying the technology to support the specific business initiative Lack of change management (behavior and process changes), which when combined with the right technology generates profit
On the other hand, Navarro extends a little more the causes why CRM implementations fail and lists the following causes:
- Thinking that technology is the solution, technology only makes sense after having perfectly defined business objectives. Lack of support from management, due to a lack of knowledge of the opportunities that CRM offers. There is no "passion for the customer" in the culture of the organization. Unclear return on investment, because it is not a mature sector and there is a general lack of knowledge about its ROI. Lack of vision and strategyIt is a common problem not to have a clearly defined strategy and, therefore, measurable business objectives in the CRM area. In addition, the problem increases when there is not a correct allocation of resources and a correct methodology for the development of the project. Do not redefine the processes, as in other types of technological projects, it is necessary to redefine the business processes to achieve the desired results. The way things are done in the organization needs to be redefined to achieve results. Poor quality of data and information, one of the pillars of CRM is customer knowledge (Customer Intelligence) and within this concept the quality of data and information is basic since it is from them that conclusions are drawn. Problems with integration, an IDC study points out that less than 10% of those surveyed have integrated their CRM with their ERP or their Data Warehouse. Not managing change correctly, like any large project, correct management of change and organizational culture is necessary. Little implementation of analytical CRM, the analytical part of CRM is responsible for drawing conclusions about current and potential customers from a large amount of data. Without the analytical part, you do not get a global vision of the client and therefore most of the advantages that CRM offers.
"Success factors for the implementation of CRM"
Despite all these failure factors, Sarner (2004) mentions 3 critical factors to achieve success in the implementation of CRM, which are:
- Never underestimate CRM capabilities. When tackling a CRM project, analyze the needs of the entire company, not just sales, support, and marketing. Continually evaluate internal processes and use CRM to look for additional areas for improvement.
"Current situation of CRM"
To explain the current situation in CRM, the Gartner Hype Cycle can be used, a cycle defined by Gartner to model the introduction and development of new technologies.
In this life cycle of the technology, after its appearance and initial growth, there is usually a peak of expectations above the actual results. After that moment, there is a "disappointment" that lowers expectations, at the same time that tangible results grow, converging both in the medium term. This cycle is described in Figure 1.
conclusion
It can be understood then that for the implementation of a CRM it is more than making a request to a software provider with the quotes and a presentation of the benefits that will be obtained, it is necessary to analyze if the organization is prepared and wants a change in strategy oriented towards the client in order to guarantee the success, or at least minimize the risk of failure of said implementation.
With the implementation and use of CRM, organizations can retain and get more customers, and thus remain in the competitive market that we are living.
A CRM implementation is done and planned slowly, so we will have the possibility that the risks are lower and we will show the results little by little; in this way, success stories can be increased.
We must remember that CRM must also see it, as a business strategy, that is why we must continuously learn from the behavior of our tool, we must observe the movements that the competition is making, as well as always keep in mind that the customer and their satisfaction are First.
Bibliography
Agrawal, ML (2003). Customer Relationship Management (CRM) & Corporate Rrenaissance. Journal of Services Research, Volume 3, Number 2. 149-171. Retrieved May 13, 2004, from EBSCO database.
Corner, Ian, Hinton, Mathew. (2002). Customer relationship management systems: Implementation risks and relationship. Vol.5; 239-252. Retrieved June 8, 2004, from Proquest database.
Gartner's Hype Cycle. Retrieved June 10, 2004, Hansotia, Behram. (2002). Gearing up for CRM: Antecedents to successful implementation. Journal of Database Management. Volume 10, 121-133. Retrieved June 7, 2004, from Proquest database.
Kolsky, Esteban. (2004). Want to Succeed in CRM? Don't Call It CRM. Retrieved June 9, 2004, from Gartner Group database, López, Carlos. Do you know what CRM is? Retrieved June 1, 2004, Navarro, Eduardo. What is CRM ?. Retrieved June 1, 2004, Navarro, Eduardo. The realities of CRM. Retrieved June 1, 2004, Sarner, Adam. (2004). With CRM, Viewpoint Proves That Change Is Good. Retrieved June 5, 2004, from Gartner Group database, Shaw, Rochelle. (2002). Customer Relationship Management (CRM): Overview. Retrieved June 5, 2004, from Gartner Group database, Valenzuela, P., Franz. What is CRM and what is the true meaning? Retrieved June 1, 2004,
