Chapter # 1.

Introduction to CRM

1.1 Evolution of CRM

business world in the 1990’s with the promise of forever changing the way businesses small and

large interacted with their customer bases. In the short term, however, it proved to be an

unwieldy process that was better in theory than in practice for a variety of reasons. First among

these was that it was simply so difficult and expensive to track and keep the high volume of

records needed accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking features have

vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the

price of newer, more customizable Internet solutions have hit the marketplace; competition has

driven the prices down so that even relatively small businesses are reaping the benefits of some

custom CRM programs

1.2 In the beginning…

define the practice of setting up customer service groups to speak individually to all of a

company’s customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of communication

open and tailoring service to the clients needs. In the case of smaller clients, however, it tended

to provide repetitive, survey-like information that cluttered databases and didn’t provide much

insight. As companies began tracking database information, they realized that the bare bones

were all that was needed in most cases: what they buy regularly, what they spend, what they do

Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management (CRM) is to enable

organizations to better serve its customers through the introduction of reliable processes and

procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be implemented

by only installing and integrating a software package designed to support CRM processes. A

holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes

training of employees, a modification of business processes based on customers' needs and an

Services that enable the organization or company to follow its CRM strategy. CRM-Services can

even redundantize the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy oriented on

customer needs. The second one is the description which is correct. The main misconception of

CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering and

processing, and self-service. It attempts to integrate and automate the various customer serving

processes within a company.

operational - automation to the basic business processes (marketing, sales, service)

analytical - support to analyse customer behaviour, implements business intelligence alike

cooperational - ensures the contact with customers (phone, email, fax, web...)

Operational part of CRM typically involves three general areas of business. They are (according

to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and

a Customer service and support (CSS). The marketing information part provides information

about the business environment, including competitors, industry trends, and macroenviromental

The technology ability of potential users. Many CRM solutions are complex and difficult

to use; others have a more intuitive look and feel. Choose a solution that fits the abilities of your

users.

Once you've determined where your organization fits, you'll want to consider both the complexity

of the solution and ease (or difficulty) involved in adding and evolving functionality over time as

your needs change and your users become more comfortable with the solution. Here are some

red flags you should look out for in evaluating solutions in terms of user adoption:
•
Plans for extensive customization
•
Multiple components that will be integrated to meet your needs
•
Lack of a track record supporting "your kind" of sales reps
•
Functionality planned "for the next release"
•
An extensive training program
•
Ongoing consulting requirements for any changes or updates
Cost
In CRM, "you get what you pay for" isn't always true. In fact, many companies in the past have

overspent on CRM components and features that never delivered value to their users - if they

even made it out of the box. You'll have the most success with a measured approach that doesn't

have to include a hefty initial license fee.

today, what solutions are they most comfortable using, and what will need to be integrated in

some way into the CRM solution you choose to deliver value? How you integrate existing

resources and applications into a CRM project should not be an afterthought. In selecting a

vendor, you'll want to explore how it can integrate with your existing environment. Demand to see

a track record with reference customers in a similar situation.

One company chose Microsoft CRM because it would easily integrate with back-end office

applications, because the sales force was already familiar with the Microsoft interface look and

feel, and because the design of the application closely matched its existing business processes.

It achieved a payback of five months.

should consider how easy it will be to make changes over time as your needs change. In all

likelihood, the way you use CRM will change over time - and the flexibility of the application to

enable you to support those changes can have a significant impact on the ongoing cost of the

solution.
Best Practices
Once you've determined which solution is right for you and built the business case, you'll want to

make sure you have the key checkpoints in place so that the project delivers on your ROI

expectations.
Pricing and Purchasing
Before you sign on the dotted line, make sure you've done due diligence on your contract with
the vendor. Double-check the following:
•
Is the initial license price per user in line with industry benchmarks?
•
Are you paying less, more, or the average annual industry maintenance? If you decide to
stop paying maintenance in the future, does your contact support that?
•
 If you're purchasing multiple modules at the same time, do you have a clear view of the

cost of each item? Are you sure you should be buying them all now, or would a phased approach

be better?
•
What commitment has the vendor made to your deployment time line? If a third party is
involved, how are the deployment risk and responsibility being shared?
Deployment
Piloting a CRM solution can be a great way to judge both whether or not the solution will work for

you and how flexible and agile the solution (and vendor) is in responding to specific needs. Most

hosted solution vendors offer a free or nearly free pilot option today; depending on the

level of customization and integration needed, a pilot of an internal solution before you buy may
or may not be possible.
Best Practice: Pilot First
One company deploying an ePeople CRM solution used an initial pilot at one location to evaluate

the application and get valuable feedback on how and when the software should be expanded to

other locations.

Even after you've made the commitment, piloting to a select group of users before you complete

customization is a good way to determine whether or not the solution works - and to gain

valuable feedback on how and with what changes the solution should be rolled out to the broader

population.
Best Practice: Phase In Functionality
One company deploying a JD Edwards CRM solution found that while it achieved a positive ROI,

it could have accelerated user adoption and thus shortened its payback period by introducing

functionality to users in phases. A phased approach would have reduced initial customization

costs and the need to train users, who were somewhat overwhelmed by the features of the

solution.
Fine-Tuning Your ROI
If you've picked the right vendor, planned a deployment with clear milestones, and gotten users

on board, you've probably received 70 percent of the ROI you can expect. The trick to really

successful CRM is continuing to evaluate and evolve your solution to deliver greater value. You'll

also want to keep track of potential upgrade opportunities and take a close look at the business

case - both the benefits of upgrading and the time and pain associated with the upgrade - before

you make a change