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Management Information Systems

Notes 9.6 Application in CRM

CRM is a multifaceted process, mediated by a set of information technologies that focuses on
creating two-way exchanges with customers so that firms have an intimate knowledge of their
needs, wants, and buying patterns. In this way, CRM helps companies understand, as well as
anticipate, the needs of current and potential customers. Functions that support this business
purpose include sales, marketing, customer service, training, professional development,
performance management, human resource development, and compensation. Many CRM
initiatives have failed because implementation was limited to software installation without
alignment to a customer-centric strategy.
It is a process or methodology used to learn more about customers’ needs and behaviors in
order to develop stronger relationships with them. There are many technological components
to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful
way to think about CRM is as a process that will help bring together lots of pieces of information
about customers, sales, marketing effectiveness, responsiveness and market trends.
CRM helps businesses use technology and human resources to gain insight into the behavior of
customers and the value of those customers.
There are many aspects of CRM which were mistakenly thought to be capable of being
implemented in isolation from each other.

CRM is the philosophy, policy and coordinating strategy connecting different players within an
organization so as to coordinate their efforts in creating an overall valuable series of experiences,
products and services for the customer.

Figure 9.5: CRM Cycle

Successes

While there are numerous reports of “failed” implementations of various types of CRM projects,
these are often the result of unrealistic high expectations and exaggerated claims by CRM
vendors.
Many of these “failures” are also related to data quality and availability. Data cleaning is a major
issue. If the company CRM strategy is to track life-cycle revenues, costs, margins and interactions
between individual customers, this must be reflected in all business processes. Data must be
extracted from multiple sources (e.g., departmental/divisional databases, including sales,
manufacturing, supply chain, logistics, finance, service, etc.), requiring an integrated, and

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