III Executive Summary
In the past, CRM (Customer Relationship Management) was seen more clearly as a
strategic tool in conjunction with technological progress. Now more and more
companies use CRM to earn benefits. It helps to understand, manage and develop
customer-specific analyses in order to increase customer loyalty and customer
satisfaction. The fast-growing market of the different CRM systems is becoming more
and more obscure but also more and more interesting for medium sized enterprises.
This implementation promises to survive in the market and achieve a competitive
advantage.
This thesis therefore aims to create a guideline to set aside to a number of clients
that helps the clients of medium sized companies to get a sufficient overview of the
whole situation around the subject of CRM. Relevant information about the variety of
systems, conditions and requirements of using CRM within an enterprise will be
provided. In addition, the positive and negative aspects of CRM will be mentioned in
this report.
Based on the findings this report will clarify the question which economic strategy is
correct or preferred for medium sized companies. Many providers offer companies to
rent their CRM system during the first steps of implementation rather than to buy it.
This offers the possibility to optimise one’s own corporate strategy with regard to the
procedure which will change a corporate strategy by implementation of a CRM
system.
The prerequisites of successful implementation consist of many different changes
within the company. These changes are the key factors to a successful and profitable
decision about the failure or success of the strategy in the market.
To round off the issue of the topic, customer satisfaction, customer loyalty and
changes in consumer behaviour will be analysed. To benefit from a customer it is
particularly important to understand this first. It is advantageous to monitor and track
changes in the consumer behaviour and to be prepared at the next step or be one
step ahead.
Finally, the downsides, risks, benefits and opportunities of the CRM implementation
will be analysed and evaluated at the end. Also, a recommendation is offered for the
approach of medium sized companies within the implementation-stage.
Table of Contents
1 Aims and Objectives
2 Definition
2.1 CRM
2.2 MSE – Medium-sized Enterprises
3 CRM
3.1 CRM – Life cycle
3.2 CRM-Systems
4 CRM technologies
4.1 Operative CRM (oCRM)
4.1.1 eCRM
4.1.2 mCRM
4.1.3 EAI
4.2 Analytical CRM (aCRM)
4.2.1 Data Warehouse
4.2.2 Online Analytical Processing (OLAP)
4.2.3 Data Mining
4.3 Collaborative CRM
4.4 Goals of CRM
4.4.1 Customer-related objectives
4.4.2 Business-related objectives
4.4.3 Strategic, product-specific and financial goals
4.5 CRM market
5 Requirements for a successful CRM implementation
5.1 Change Management
5.2 Business process optimisation (organisation)
5.3 Customer Relationship Strategy
5.4 Corporate Culture
5.5 Employees
5.6 CRM system
6 CRM – Rent or Buy
6.1 CRM OnDemand
6.2 CRM OnPremise
6.3 Cost and decision criteria
7 Customer - The meaning of customer satisfaction
7.1 Aspects of customer loyalty
7.2 The change in consumer behaviour
8 Downsides and Risks
8.1 Downsides of CRM implementation
8.1.1 Strategic and conceptual Resistors
8.1.2 Management resistance
8.1.3 Employee’s resistance
8.1.4 Customer resistance
8.1.5 Other downsides
8.2 Risks of CRM implementation
9 Benefits and Chances
9.1 Benefits of CRM implementation
9.2 Chances of CRM implementation
10 Trends of CRM
10.1 mCRM
10.2 CRM 2.0 (Social CRM)
10.3 eCRM
10.4 CRM on Demand
11 Conclusion
12 Recommendation
Project Goals and Scope
The primary objective of this project is to provide a comprehensive guideline for medium-sized enterprises to navigate the complexities of implementing Customer Relationship Management (CRM) systems. The report investigates the technical, strategic, and human requirements for a successful implementation, while evaluating the economic trade-offs between purchasing and renting CRM solutions.
- Understanding the definition and lifecycle of CRM within a medium-sized enterprise context.
- Comparing different CRM technologies, including operational, analytical, and collaborative approaches.
- Evaluating the strategic requirements and necessary organizational changes for successful CRM implementation.
- Analyzing the economic decision-making process between CRM "Rent" (OnDemand) versus "Buy" (OnPremise) models.
- Investigating the core components of customer satisfaction, loyalty, and changing consumer behavior.
- Identifying common risks, downsides, and potential benefits of CRM initiatives.
Excerpt from the Book
3.2 CRM-Systems
In many enterprises, before the introduction of a CRM concept in marketing, sales and service area, there is an IT-scenery that is embossed by many isolated applications. The individual, historical systems (e.g. Computer Aided selling, web applications, Helpdesks, Marketing Support, Call Centre, system analysis, etc.) do not permit a consistent view on customer data which exist in the company. This leads to inconsistent and outdated, erroneous or incomplete information about the customer. CRM-systems are aiming for consolidation of the individual isolated application. Applications for marketing, sales and service from the Internet, call centres or somewhere else get united in one IT-scenery. In addition, standard business software (Enterprise Resource Planning systems or tied Supply-Chain Management systems) can get connected with the CRM-system interface. Therefore, just one logically united customer database exists that can be accessed by all corporate divisions. This allows a holistic view of each customer and an integral, cohesive dialogue with the customer. The integrative task of CRM-systems, i.e.
- synchronisation and operational support of the key customer touch-points (marketing, sales and service) and
- integration of all communication channels between customer and company, the necessary consolidation and evaluation of all customer information
imply a high complexity of the CRM-system.
According to the requirements, CRM-systems can be divided into three principle core functions that are in close exchange relationships to each other. These are operation CRM (oCRM), analytical CRM (aCRM) and collaborative CRM.
Summary of Chapters
1 Aims and Objectives: Defines the purpose of the report as a guide for medium-sized companies regarding CRM implementation and strategy.
2 Definition: Explores various CRM definitions and establishes clear criteria for classifying medium-sized enterprises.
3 CRM: Details the CRM lifecycle and the technical necessity of consolidating isolated applications into integrated CRM systems.
4 CRM technologies: Examines operational, analytical, and collaborative CRM components and their respective goals and technological requirements.
5 Requirements for a successful CRM implementation: Discusses the importance of change management, organizational alignment, and the role of corporate culture.
6 CRM – Rent or Buy: Compares the "OnDemand" (SaaS) and "OnPremise" deployment models based on cost and strategic decision criteria.
7 Customer - The meaning of customer satisfaction: Analyzes the psychological drivers of customer loyalty and shifting consumer behaviors.
8 Downsides and Risks: Outlines potential pitfalls, including resistance from management and employees, data protection issues, and implementation risks.
9 Benefits and Chances: Highlights the long-term competitive advantages and organizational improvements gained through effective CRM.
10 Trends of CRM: Discusses future developments like mCRM, Social CRM (CRM 2.0), and the growing SaaS market.
11 Conclusion: Summarizes that CRM is a vital long-term philosophy rather than just a software tool, requiring careful, phased implementation.
12 Recommendation: Provides a final strategic recommendation to prioritize a step-by-step implementation approach tailored to specific corporate needs.
Key Terms
Customer Relationship Management, CRM, Medium-sized Enterprises, MSE, Operational CRM, Analytical CRM, Collaborative CRM, Data Warehouse, Customer Loyalty, Change Management, SaaS, TCO, Customer Satisfaction, eCRM, mCRM
Frequently Asked Questions
What is the primary goal of this management project?
The primary goal is to provide a comprehensive guide for medium-sized enterprises to understand CRM, evaluate its risks and benefits, and make informed decisions regarding implementation strategies.
What are the core thematic fields covered in this report?
The report covers CRM definitions, technological classifications (oCRM, aCRM, collaborative), implementation prerequisites, deployment models (Rent vs. Buy), and the analysis of customer loyalty.
Which scientific methods or frameworks are used?
The project uses a mix of market analysis, comparative studies of deployment models, and the "Confirmation/Disconfirmation" paradigm to explain customer satisfaction.
What does the "CRM lifecycle" entail?
The lifecycle consists of three distinct phases: acquisition, enhancing, and retaining, each requiring unique strategic approaches to maximize customer profitability.
What distinguishes "OnDemand" from "OnPremise" CRM?
OnDemand CRM is hosted externally and paid via subscription, offering lower upfront costs. OnPremise CRM involves purchasing licenses and hosting the software on internal company servers.
How is a "medium-sized enterprise" (MSE) defined in this report?
The report synthesizes various definitions, concluding that an MSE typically has a headcount of up to 250 employees and defined limits on annual turnover and balance sheet totals.
Why is "Change Management" critical for CRM?
CRM implementation is more than an IT project; it is a fundamental shift in business philosophy. Change management is necessary to align corporate culture and reduce resistance from employees.
What is the role of the "Data Warehouse" in Analytical CRM?
The Data Warehouse acts as the central repository for integrating internal and external data, forming the necessary foundation for strategic analysis and reporting.
How does the report address the "costing iceberg"?
The "costing iceberg" illustrates that software licenses represent only a small fraction (approx. 9%) of the total cost, with the majority of expenses hidden in customization, implementation, and personnel training.
What is the author's final recommendation regarding CRM rollout?
The author strongly recommends a phased, step-by-step implementation across departments rather than attempting a complete company-wide rollout at once to minimize risk and cost.
- Arbeit zitieren
- MSc./ Dipl. Jan Heyn (Autor:in), 2010, CRM – optimize your company: Benefits and downsides of implementing CRM systems, München, GRIN Verlag, https://www.hausarbeiten.de/document/192564
