Article critique on the strategic implementation of CRM systems
This article critique emphasizes on the need for more focus to be placed on the integration of strategic business systems in organizations. It expounds on the aim of the article on the subject of integration, and value creation on an organization wide perspective as regards Customer Relationship Management (CRM) systems. The concept of mutual value rings loud in the article. How can companies find use of information systems in strategy? This question is answered through the articles exposure of the need for consideration of company culture, perspectives and firm orientation as relates to the adoption and implementation of an appropriate CRM system. The article critique thus places the importance of organizational perspectives focused in true and real value creation in the adoption and use of information systems.
The strategic use of Customer Relationship Management (CRM) systems is an outgrowth of the specific sophistication of the Information Technology (IT) and Marketing department of an organization. CRM like many other core business functions has been in use since the advent of commerce and therefore they are not new concepts. The novelty that is of concern is the application of information technology to achieve certain functions inherent in CRM. This is therefore a matter that is grounded by the existing CRM systems in an organization. The integration of these legacy systems into the existing practice of CRM (which every business invariably does) is the crux of the matter. How are businesses able to bring out the strengths of their existing CRM competencies through the utilization of IT? What follows in this critique is an analysis of the various considerations inherent in CRM technology that impact on the overall customer experience in a business. We will reveal how important a harmony between IT and Marketing departments is and how this will influence the specific components of CRM that are to be automated such as Sales Force Automation, Marketing Automation etc. The business that can create a harmony in this are will receive enhanced customer experiences and even increased sales revenue. CRM systems that are hurriedly integrated can ruin existing relationships and erode revenues. This is thus a critical move in business.
Customer Relationship Management is More Than Just an IT issue
Customer relationship management is an integral part of business. Simply put it is business. A business without customers is mainly a charitable venture (Rolf et.al 2003). Customer relationships cost money from the beginning of the business. Marketing is therefore a cost to win customers as is the various learning processes that an organization goes through to win customers and build long term relationships.
The responsibility to create fulfilling relationships with customers is not just an affair of the sales and marketing team, neither is it just a responsibility of the customer care department. If other key areas of business are not in tune with the values of customer relationship management then the end result will be poor customer relationships and consequently decreased sales. This applies to every other aspect of business which brings us to the main crux of the matter-business information systems are built on existing business systems.
Business Systems: The foundation of information systems
It may be viewed as irrelevant but the very concept that a business needs to have systems to run is very crucial in the development of information systems. Business is run by a system which invariably consists of purchasing, manufacturing, billing, accounting, research, sales, marketing research, shipping and personnel (Ramesh). When the size of an organization increases as is evident by many businesses today the amount of coordination that is required by those managers who run the business increases. Management occurs via information. Without information on the current state of affairs of a particular aspect of the business then decisions cannot be made with accuracy and money is lost. This forms the background from which any information systems is built to run a particular data processing requirement of the business. The case here is placed on customer relationship management.
Response is the ultimate weapon in today’s business organization. In regards to the business systems, response is only capable when the systems of an organization function at a much faster and more coordinated fashion. This faster rate of function and coordination is only possible with faster collecting, processing and distribution of information to the relevant decision makers in an enterprise (Robert et.al 2003). It is in this context that strategic business systems require to be used in order to bring out the desired and timely response in an organization.
This response feature that is sought by business enterprise comes from the need of an ‘optimized business enterprise’ (Robert et.al. 2003). For this to occur, information systems of a business need to provide a much higher level of engagement in order to enable optimization of businesses. It is not enough for the systems to codify functions in a particular division. The system must spew out information that impacts and positively enables high level decision making. In this light the implementation of any information system is premised on its ability to bring on board this high level functionality to management. This is what impacts strategy.
Article Critique: The Strategic Value of CRM: a Technology Adoption Perspective
Out of the bat the article begins with an assertion on the novelty of customer relationship management which is not factual. Customer relationship management as a term might be new and in fact the focus on this aspect of business management might be new yet the existence of a customer-business relationship is as old as business itself and CRM does not propose any new modification on the fundamentals of this relationship. It just proposes a fine tuning of events and actions in order to ensure value creation for both customer and business (Lorna 1993). The article wrongly assumes the focus on the flow of information through a business in the specific areas of customer and business relationships as a new thing yet this aspect has been seen invariably as a sales as well as management function for decades as Lorna (1993) intimates on business information flows and sources.
While it is of no doubt that CRM as a study and business function can be thought of as novel simply due to renewed focus and distinction the very core of customer and business relationships as well as the information flows between these two agents is not a new concept in and of itself. However to the articles credit it does recognize this view that CRM is in fact application of marketing principles and techniques that have been around for ages.
The article finely places the particular need for a higher level of engagement in information systems as regards the quality and relevance of information by underlining the organization level engagement that CRM systems are steeped. In specifics CRM systems are both an affair of IT and Marketing. This key point of integration that is inherent in any information system’s success (Robert et.al 2003) is developed in the article as ‘strains’ are identified as emerging due to various disparities in culture as well as perception of the usability of the particular CRM. Just like any other tool in business CRM is open to different interpretations on its role. These interpretations are functions of culture as well as each divisions or department’s individuality. These sources of strain are strong enough to undermine the value and application of the particular information system. Information system use is thus as much a strategic move as well as a functional one. The article shows the possibility of problems in organizations where marked differences in culture exists between departments and divisions. This is because like any other information system CRM is an organization tool and not in the disposal of IT or marketing.
While the article begins with asserting that CRM adoption is ‘antecedent’ to both relationship strength and performance the point is brought out in a much clearer way when it is established that CRM implementation is steeped in strategy. In other words CRM adoption is a strategic move, one that must be considered as a tool in bringing out overall strategic goals and objectives. This focus inadvertently forces IT as well as Marketing managers out of their various cocoons and into the wider organizational arena where engagement requires and demands more from CRM systems and the various departments that use them. Words like ‘cross-functional’ and ‘collaborative’ are used to show the critical organizational requirements placed on the CRM systems and their adoption.
In this single focus the article is well grounded and placed in the larger arena of the adoption of a varied number of Information systems in businesses. Of more importance is the mutual creation of value for each department in the organization than the particular mechanics that underlie the particular information system (Robert et.al 2003). This fine focus and placement of the article continues when the underlying trend of CRM focus as a business information enabler is exposed.
The article clearly demonstrates the bias that is given to various aspects of implementation of CRM systems. This when looked at from the greater context of information systems reveal a consistent focus on the nuts and bolts as it were rather than on the specific usability of the device as a whole. In the article the tendency of research to be focused on the implementation goals that IT can bring is exposed in a very clear fashion. A huge gap exists in empirical research applied from a marketing perspective on CRM. A great example of this argument is the comparison of a simple Roledex system to a sophisticated IT CRM system in the greater light of relevance to the particular aspect of the relationship between customer and business as well as the information being sought. Of what use is a sophisticated system when the required CRM information to enable decision making is lacking? This exposes a dedicated focus of IT on areas that prove irrelevant from the organizational standpoint as far as actionable information is concerned.
The article gives a nod of approval to the vary fact brought out in the immediate paragraphs in this paper. It elicits the age old existence of customer relationships as a matter of concern in business. Much like this aspect of enterprise is the sourcing of goods and services that forms a substantial part of supply chain management. Yet, the success of information systems are predicated on the strength and resilience of the underlying legacy based or old systems as it were. CRM is no different as the article demonstrates its history in business. This places the reader in the right context and achieves the objective of placing CRM systems as an auxiliary tool that builds on already existing legacy systems that already must exist for any enterprise such as a customer address database. It is important for the role of many information systems to be exposed as auxiliary. This is a key thing, so that in the possible failure of implementation or function of a system the problem can be traced to the actual deficiency in the organization and not blamed on the inappropriateness of some CRM system. Perhaps this would also assist research to focus more on empirical cases where CRM and other information systems are in use and note the various organizational stimuli that affect the function and efficacy of the information system in question.
The article continues in strength showing the various scenarios and trains of thought that are significant in CRM system implementation and eventual success in a firm. It identifies specific business features such as firm orientation where it exposes the efficacy of CRM systems as a function of a firm’s orientation. This is novel. The highest rating is identified in a firm with an innovation and marketing orientation. This would be explained by the firm’s use of feedback data in as far as customer’s need perception priorities are concerned.
What can be used as a benchmark of CRM technologies? This question is answered very specifically in the article where relationship trust and performance are signaled out right from the start. Various parameters are identified such as commitment for instance. Any information systems must possess actual benchmarks on its efficacy .These benchmarks must show the important aspect that the information system is designed to bring out as in this case a stronger relationship between customer and business can be viewed in the increased trust inherent in the relationship.
The article ends by placing in perspective specific model relationships that are built on already identified parameters of relationship performance and strength. These parameters are premised to be significant in any CRM system as well as relationship management. Overall the article brings focuses on the areas that are deserving of attention and effort in the adoption of information systems as a matter of strategy or otherwise. These are the perspectives that respect the need for mutual value creation to be achieved for the various arms of the organization as well as stakeholders. Just as a CRM can increase value for both customers and business in much the same way an Enterprise Resource Planning system may enable value to emerge for other stakeholders like investors or supply partners. Yet in much the same way poorly integrated information systems can damage organizations and their stakeholders in severe ways.
The article is steeped in facts and demonstrates accurately the deficiency that exists straight from research and on to application in the whole concept of Information Systems. In this instance of CRM systems at the research level we see a dedicated focus on implementation and mechanics at the expense of usability and real world empirical application studies. At the adoption level we see the need for a more organization wide focus that is actually linked to the relevance of the CRM system in the company’s overall strategy and objectives be they concerning relationship strength and relationship performance.
Rolf T. Wigand, Peter Mertens, Freimut Bodendorf, Wolfgang König, Arnold Picot, Matthias Schumann (2003). Introduction to business information systems. US: Springer. p1.
Ramesh Bangia (n.d.). Business Systems. India: Firewall Media. p1.
Robert J. Thierauf, James J. Hoctor (2003). Smart business systems for the optimized organization. US: Greenwood Publishing Group. p.1.
Lorna M. Daniells (1993). Business information sources. US: University of California Press. p339-340.