CRM adoption and implementation proposal

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Cust.RelationshipMgmt.SectionY01Fall2018CO-11272018-1103PM1.zip

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content/Unit2/Section 2.1.html

2.1 CRM Perspectives

CRM at the Functional level

Set of processes to execute marketing functions like sales force automation or mktg. campaign management

CRM at the Customer-facing level

Set of activities that provide a single-view of the customer across all contact channels
Customer intelligence obtained is available across all customer-facing functions

CRM at the Organizational level - Strategic CRM

Knowledge about customers and their preferences have implications for the entire organization

CRM.gif

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2.2 What is Strategic CRM

Successful strategic CRM is a complex set of activities that together form the basis for a sustainable and hard-to-imitate competitive advantage
Shapes interactions between company and customers to allow maximization of lifetime value of customers
Recognizes differences between customers with respect to their economic value to the firm as well as their expectations from the firm

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2.3.2 Integration and Alignment of Organizational Processes

Many organizations fail at CRM and other endeavors as they do not realize that a project such as this does not exist as a standalone application, process, or function. Instead all the 4 components must not only identify the CRM needs but must align their business processes along CRM.

Comprises organization wide creation and synchronization of processes, systems, and reward systems enabling implementation of customer management principles
Strategic CRM works best for organizations that are organized around cross-functional processes rather than functional silos
Firmly incorporates needs of the customer and goals of the firm into product and service delivery
Characterized by an understanding that value provided to target customers should be what drives all processes
Individual processes work in sync with common goal of attracting and retaining target customers
Customer management compatible incentives drive employee and organizational goals simultaneously
Processes are designed in such a manner that they automate a feedback

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2.3.3 Information Capture and Alignment of Technology

Comprises all the necessary technology and processes to collect, store, and process relevant and timely customer information
Characterized by the capability of leveraging data to actionable information
Makes customer management processes not only more efficient but also more effective
Helps to create entirely new processes and channels based on online and mobile applications
Firms that are able to generate intelligence and act on it will derive competitive advantage

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2.3.4 CRM Implementation ( Marketing-Driven Characteristics )

The fourth component ties the other three components together. The CRM implementation will be driven by the marketing function in the enterprise. The Marketing IT program manager or the Marketing Project manager should ensure the following characteristics.

Activities and processes that constitute analytical CRM
Activities and processes that constitute operational CRM
A firm’s ability to understand the value of the customer to the firm and the variety of needs different customers have
An acquisition and retention process that continuously aligns the offering with customer needs and values
An ability to continuously improve what the company offers by learning about its customers

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3.1 Steps in Developing a CRM strategy

Since we now understand the components what are the steps that should be taken?

Gain enterprise-wide commitment
Build a CRM project team
Analysis of business requirements
Define the CRM strategy

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3.2 The 4 Steps in development of a CRM strategy

3.2.1 Gain enterprise-wide commitment

By:

Top-down management commitment
Bottom-up buy-in from system users
Dedicated full-time project team
Budget allocation for the total solution

3.2.2 Build a CRM project team

Obtain active representation from:

Management - Provide leadership, motivation and supervision
Information services/ technical personnel - Ensure CRM system compatible with existing software applications
Sales, marketing and services groups - Evaluate usability of CRM system based on effectiveness, efficiency and satisfaction
Financial staff - Provide critical analysis for assessment of increased sales productivity, evaluation of operating costs, estimated cost of system expansion and ROI projections
External CRM expert - Provide a valuable source of objective information and feedback

3.2.3 Analysis of Business Requirements

Gathering information to:

Identify the services and products that are being supported
Map current workflows, interfaces, and inter-dependencies
Review existing technologies, features and capabilities
Discuss the vision for the business and the operational plan
Define business requirements
Develop enhanced business workflows and processes
Identify gaps in technology functionality
Map functionality to business processes
Develop a new technology and functionality framework
Develop a conceptual design and prototype plan

3.2.4 Define the CRM Strategy

The previous 3 steps should lead to the fourth step that ties the strategy together with the following:

Value Proposition
Business case
Customer strategy
Enterprise transformation plan
Other stakeholders

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4.0 CRM Applications

CRM applications serve the processes of three major business functions

• Sales and Sales Management Function

Contact and quote management, account management, pipeline analysis
Interaction of sales force with prospect, turning prospect into customer, maintaining mutually profitable relationship

• Marketing function

Multi-channel campaign management, opportunity management, web-based encyclopedia, market segmentation, and lead generations / enhancement / tracking
Personalization
Content management

• Customer service function:

Incident assignment, escalation, field personnel tracking, reporting, problem management, resolution, order management, and warranty / contract management
Key to a company’s ability to maintain proactive relations with customers and hence retain satisfied loyal customers
CRM systems assist in managing help desk and providing customer care

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5.0 Expenses, Costs, Value, Return

5.1 ROI (Return on Investment) of CRM

Formula: Profits/Investment X 100% = ROI (%)

5.2 Questions on what can be counted as investment in CRM?

How much will consulting for the project cost?
To what degree is business processes re-design necessary?
What new software and hardware must be purchased to accommodate the new system?
Does the system need to be customized or will it work “out of the box”?
How much customization is required and at what cost
Can the system be easily configured and maintained by internal IT staff or is continuous external assistance required?
What is the cost of training the company’s staff to use the CRM system?
What is the timeframe for implementation and what will happen to the current system processes during that time?
What are recurrent costs?

In summary the costs of a CRM implementation are due to IT costs, people costs, and process costs.

5.3 IT Costs

Come from:

1. One-fifth to one-third of total cost

2. Investment in IT infrastructure, database development and software

3. Software components, For example:

Sales force automation
Sales management automation
Call-center automation
Marketing automation
Customer-service automation
Knowledge and operations management
E-commerce functions

5.4 People and Process Costs

Come from:

People costs – Recruitment, redeployment and training costs
Process costs

5.5 Stages of ROI Estimation

Setting the target
Reaching the target
Building consensus and commitment

5.5.1 Setting the target

Determine ROI goal of CRM project based on benchmarking, similar projects, external and internal knowledge

Questions to raise:

Is the goal sufficient?
Is this goal achievable?

5.5.2 Reaching the target

Generate ideas of how to reach target through internal bottom-up participation, external views, consultants, benchmarks, etc

What factors have to change and by how much?
Does it work from a technical perspective?
Are the proposed benefits clear?
Will customers and/or staff accept these measures?

7.4.3 Building consensus and commitment

This last point is particularly important to the IT professional. If IT is not in agreement or if another business function is not in agreement then IT generally will not be successful in the project.

Executives and line staff must agree on proposed ROI goals and ensure commitment from all the involved departments