1. ERP and CRM
Like ERP, CRM solutions focus on automating and improving business processes, albeit in
front-office areas such as marketing, sales, customer service, and customer support. Whereas
ERP implementation can result in improved organizational efficiency, CRM aims to provide
organizational effectiveness by reducing sales cycle and selling cost, identifying markets and
channels for expansion, and improving customer value, satisfaction, profitability, and retention.
While CRM applications provide the framework for embodying, promoting and executing best
practices in customer facing activities, ERP provides the backbone, resources and operational
applications to make organizations more efficient in achieving these goals.
Technological Tools for CRM
Tools
Customer database
A good customer information system should consist of a regular flow of information, systematic
collection of information that is properly evaluated and compared against different points in time,
and it has sufficient depth to understand the customer and accurately anticipate their behavioral
patterns in future. The customer database helps the company to plan, implement, and monitor
customer contact. Customer relationships are increasingly sustained by information systems.
2. Companies are increasingly adding data from a variety of sources to their databases. Customer
data strategy should focus on processes to manage customer acquisition, retention, and
development.
CallCenter helps in automating the operations of inbound and outbound calls generated between
company and its customer. These solutions integrate the voice switch of automated telephone
systems (e.g. EPABX) with an agent host software allowing for automating call routing to agents,
auto display of relevant customer data, predictive dialing, self service Interactive Voice Response
systems, etc. These systems are useful in high volume segments like banking, telecom and
hospitality. Today, more innovative channels of interacting with customers are emerging as a
result of new technology, such as global telephone based calls centers and the Internet. Companies
are now focusing to offer solutions that leverage the Internet in building comprehensive CRM
systems allowing them to handle customer interactions in all forms.
Systems Integration
While CRM solutions are front office automation solutions, ERP is back office automation
solution. An ERP helps in automating business functions of production, finance, inventory, order
fulfillment and human resource giving an integrated view of business, where as CRM automates
the relationship with customer covering contact and opportunity management, marketing and
product knowledge, sales force management, sales forecasting, customer order processing and
fulfillment, delivery, installation, pre-sale and post-sale services and complaint handling by
providing an integrated view of the customer.
It is necessary that the two systems integrate with each other and complement information as well
as business workflow. Therefore, CRM and ERP are complementary. This integration of CRM
with ERP helps companies to provide faster customer service through an enabled network, which
can direct all customer queries and issues through appropriate channels to the right place for
speedy resolution. This will help the company in tracking and correcting the product problems
reported by customers by feeding this information into the R&D operations via ERP.
3. Fig 7: CRM – A FRAMEWORK
Traditional Approach to CRM Web-Enabled & Integration
Approach
Customer Contact by Customer Information
Telephone System
Integration
Mail Customer Database
with
In Person technology Electronic Point of Sale
Personal Selling Sales Force Automation
After Sales Service (Web & Internet)
Automation of Customer
Complaint Handling Support
Account Management Call Centers
Customer care Systems Integration
Customer Satisfaction Lifetime value of a Customer
Data Mining for CRM: Some Relevant issues
Data mining is an important enabler for CRM. Advances in data storage and processing
technologies have made it possible today to store very large amounts of data in what are called
data warehouses and then use data mining tools to extract relevant information. Data mining
helps in the process of understanding a customer by providing the necessary information and
facilitates informed decision-making.
Operational CRM solutions involve integration of business processes involving customer touch
points. Collaborative CRM involves the facilitation of collaborative services (such as e-mail) to
facilitate interactions between customer and employees. All this effort produces rich data that
feeds the Analytical CRM technologies.
Operational CRM Analytical CRM Collaborative CRM
4. Customer
Fig.8 Interactions between CRM Technologies
Information Requirements Of An Effective CRM Solution
The employees of a firm employing CRM would require rich information about their firm and
customer base including:
Information about the market
Information about the firm
The current segment
Demographic Distribution (by age, sex, education, income, marital status, etc)
The firm‟s best customers and the segment they belong to, products they buy,
preferences, habits and tastes of each segment.
Individual level information consisting of:
Customer personal details such as name, address, family details, education, etc
The customer group /segment to which the individual belongs
History of present and past behavior
Likes, dislikes, habits and preferences
Events coming up in their personal life etc.
5. The existing CRM Solutions
Delivering the „360 view‟ requires automation to bring together all the data concerning a
customer. This implies the organisation has to change from:
Mass Marketing Product Focus
Product Focus Customer Focus
Economies of Scale Economies of time
One way communication Interactive
Response Time Real Time
Present CRM Alternatives
Present CRM solutions are offered by host of vendors that are to a great extent not industry
specific. While there are some vendors, who have come up with industry specific solutions, the
broad model around which the CRM solutions are built remain the same. Adopting a similar or a
look a like solution across industries is what causes major strain in servicing a customer.
Typical offerings of the current CRM solutions (such as Siebel, Oracle Apps or MySap.com, etc)
vary from solution to solution. However typical CRM offerings consist of:
Customer Development Field sales, Tele sales, Internet Sales
Service Centre Call Centres, Field Service
Sale management and support Internet Customer Service
Market Analysis Service Interaction Centre
Internet, Tele marketing Business Partner Collaboration
Product and brand management
6. eCRM
What is eCRM?
In simplest terms eCRM provides companies with means to conduct interactive, personalized
and relevant communications with customer across both electronic and traditional channels. It
utilizes a complete view of the customer to make decisions about messaging, offers and channel
delivery. It synchronises communication across otherwise disjoint-customer facing systems. It
adheres to permission-based practices, respecting individual‟s preferences regarding how and
whether they wish to communicate with you and it focuses on understanding how the economics
of customer relationship affect the business.
eCRMVs CRM
CRM is essentially a business strategy for acquiring and maintaining the “right” customers over
the long term. Within this framework, a number of channels exist for interacting with customers.
One of these channels is “electronic” – and has been labeled “e-commerce” or “e-business”. This
electronic channel does not replace the sales force, the call Centre, or even the fax. It is simply
another extension, albeit a powerful new one, to the customer. The thrust of eCRM is not what
the organisation is “doing on the web” but how fully the organisation ties its on-line channel
back to its traditional channels, or customer touch points.
Why employ eCRM?
Companies need to take firm initiatives on the eCRM frontier to
Optimize the value of interactive relationship
Enable the business to extend its personalized reach
Company-ordinate marketing activities across all customer channels.
Leverage customer information for more effective emarketing and ebusiness
7. Focus the business on improving customer relationship and earning a greater share of each
customer‟s business through consistent measurement, assessment and “actionable” customer
strategies.
The six “E’s” of eCRM
1. Electronic channels
2. Enterprise
3. Empowerment
4. Economics
5. Evaluation
6. External Information
eCRM Architecture
The primary inputs to this module are mainly from the eCRM Assessment and strategy
alignment modules. During this stage the company will try and develop a Connected Enterprise
Architecture (CEA) within the context of the company‟s own CRM strategy. The following is a
set of technical eCRM capabilities and applications that collectively and ideally comprise a full
eCRM solution:
Customer Analytical Software
Data mining software
Campaign Management software
Business Simulation
A real time decision engine
8. Categories of CRM solutions
Any enterprise, which wants to implement CRM solutions can choose from four categories of
solutions
Integrated applications suite
Interfaced applications bundle
Interfaced best of breed solutions
Best of cluster
Selecting an interfaced best of breed approach for pure functionality or a front office application
suite solely for integration limits enterprise choices. Enterprises need to start with a clear picture
of the basic truths of integration, interfacing and functionality. An integrated application suite is
a set of application that employs a common architecture, referencing a common logical database
with a single schema. Some suites are more often interfaced application bundle i.e. a set of
interfaced application from a single vendor containing more than one technical architecture or
more than one logical database- frequently assembled by the vendor through the process of
acquisition or partnership
9. An alternative approach to suites is an interfaced best of breed solution – an approach whereby
an enterprise selects from multiple vendors a set of applications that must be interfaced to work
together, either by the enterprise, one of the selected vendors or a third party integrator. The
individual applications are not the best in any objective sense. Rather, some enterprises select the
applications because they best meet the particular needs. The challenge of this approach is that,
in some cases, the enterprise fails to complete the necessary interfaces to get the individual
applications working together; consequently, the applications remain stovepipes. Best of cluster
is similar to best of breed except that here best is chosen from the cluster and they are interfaced.
Key requirements for CRM solutions
Some of the functional and technical requirements for CRM solutions are as listed below:
Business intelligence and analytical capabilities
Unified channels of customer interactions
Support for web based functionality
Centralized repository for customer information
Integrated work flow
Integration with ERP applications
Functional Components of CRM solution
CRM applications are a convergence of functional components, advanced technologies and
channels. Functional components and channels are described below:
Sales applications
10. Common applications include calendar and scheduling, contact and account management;
compensation; opportunity and pipeline management; sales forecasting; proposal generation and
management; pricing; territory assignment and management; and expense reporting.
Marketing applications
These include web based and traditional marketing campaign planning, execution, and analysis;
list generation and management; budgeting and forecasting; collateral generation and marketing
materials management.
Customer service and support applications.
These include customer care; incident, defect and order tracking; field service; problem and
solution database; repair scheduling and dispatching; service agreements and contracts; and
service request management.
Organising for CRM
Assessing Need
How do you know your business requires CRM?
It is very easy for a business to get caught in the latest „customer trap‟ when it is being driven by
the information technology (IT) market. Every business does require CRM; the question is to
what level?
Trends
Many businesses are pushed by the current trend to change their business strategy, especially
around CRM. There are basically three trends that effect a business:
Consumer
11. The customer is an ever-changing image, to be really successful with CRM you must recognize
the customer trends that are effecting the business.
If a business does not understand a customer profile and the changes that have occurred then it is
not possible to provide true customer relationship management.
Products
It is the business providing the products that meet the changing customer trends. Products need
to be reviewed constantly perhaps enhanced or even removed. Supermarkets are a perfect profile
to look at for viewing „product trends‟, they constantly add and remove products and they
constantly view customer buying profiles and set out the pattern of the store to meet the strongest
buying trend. This may not always be by using the latest „technology‟, it could be by just
reviewing shells at the end of the day, but the super market is at the minimum watching for the
two basic trends in CRM.
Technology
Ensure that the business is ready to install the new technologies, is the customer data upto it, or is
it time to start again? Do you need to review every technology being used or just one area. Will it
assist the business, is it going to grow with the business requirements or is the technology just
another „trend‟? Relationship management should not be an alternative to existing
functions/technology; it could be a logical extension to enhance those in existence, though it
could radically change some of the operational processes.
Does CRM really matter?
Whatever the business activity is all companies have to ask themselves is CRM the real factor for
their company to succeed. Some customers do not need long-term relationship with their
suppliers; therefore only minimal information is required from that customer. That however is
still a form of CRM. Other companies have high quality and high value customers that they need
to know information about, they need to provide exceptional service, the „pedigree‟ of CRM.
12. Whatever the business is, if it has customer it has to ask, does customer relationship management
matter? What does it man to them in business terms? At what cost? What is the overall loss if not
adhered to?
CRM: Yes it does really matter – the strategy needs to last, be constantly reviewed and can
evolve over time.