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International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 1, April 2011Customer Relationship Management (CRM) Processesfrom Theory to Practice: The Pre-implementation Plan ofCRM SystemKhalid Rababah, Haslina Mohd, and Huda Ibrahim[2]. CRM as a business process was defined as “a macro-level(i.e., highly aggregated) process that subsumes numeroussub-processes, such as prospect identification and customerknowledge creation” [3]. As a technology, "CRM is anenabling technology for organizations to foster closerrelationships with their customers" [4].Among the reasons for the little consensus around themeaning of CRM are; (i) the different academic backgroundsof the researchers and scholars, (ii) CRM is still an emergentperspective and needs more time and studies to reach theconsensus, and (iii) the multidisciplinary nature of CRMwhere it is a combination of management, marketing, and ISdisciplines [5]. However, CRM is defined from a balancedperspective by [6] who state that "CRM is the philosophy,policy and coordinating strategy mediated by a set ofinformation technologies, which focuses on creating two waycommunications with customers so that firms have anintimate knowledge of their needs, wants, and buyingpatterns". In addition, one of the most recent and holisticdefinitions of CRM is the definition of [5] who suggest that“CRM is the building of a customer-oriented culture bywhich a strategy is created for acquiring, enhancing theprofitability of, and retaining customers, that is enabled by anIT application; for achieving mutual benefits for both theorganization and the customers”. Hence, for increasing theunderstanding of the notion of CRM, there is a need for anextensive and critical investigation for the differentcomponents and elements of CRM initiative or programwhere any CRM initiative or program consists of threeelements; people, processes, and technology.The failure rate of CRM implementation is quite high [7],[8]. For example, , in 2001 the failure rate of CRM projectswas estimated to be from 55% to 75% [9]. In addition,approximately 70% of CRM projects result in either losses orno bottom-line improvement in company performance [10].Many researchers indicated for the various roles for theelement of CRM processes in the high percentage of failureof CRM projects. Obviously, from the most important factorsthat contribute in the increasing the success rate of CRMprograms are; (i) the effective management of the businessprocess change [11] (ii) the successful alignment betweenbusiness processes and IT operations [12], and (iii) theunderstanding of CRM [13], [14]. On the other hand, amongthe main failure causes or factors of CRM initiatives are (i)the failing to re-engineer business processes [15], (ii) thebusiness process not redefined prior to CRM implementation[16], and (iii) the difficulty in measuring the effectiveness ofCRM deployment [17]. Therefore, the focus of this paper ison the CRM processes element.Abstract—Customer relationship management (CRM) hasthe potential for achieving success and growth for organizationsin the nowadays environment of extensive competition andrapid technological development. CRM enables organizationsto know their customers better and to build sustainablerelationships with them. However, CRM is considered asbuzzword and it is not understood well. The main componentsof CRM are people, technology, and processes. This paperprovides an extensive review of the literature regarding theCRM processes. This review aims to increase the understandingof the different perspectives and the various types and levels ofCRM processes. This paper reveals that there are four majorperspectives of CRM processes which are customer facing levelprocesses, customer oriented processes, cross functional CRMprocesses, and CRM macro-level processes. This paperrecommends that for ensuring the successful adoption andimplementation of any CRM initiative, organization shouldunderstand the different levels of CRM process and theintegrated activities among the CRM processes at each level. Inaddition, for organizations to be successful adopters andimplementers of CRM programs/systems, they shouldunderstand the need for business process reengineering andeffective anticipation and management of the change that mayaccompany any CRM initiative. This paper suggests apre-implementation plan for CRM programs/systems. Such aplan aims to initiate and communicate a customer-orientedculture within the organization. This step emphasizes onincreasing the understanding of CRM concept andcommunicating and spreading the knowledge of the promisingbenefits of CRM programs/systems to all parties in theorganization. All that will contribute in increasing the successrate of CRM programs/systems implementation.Index Terms—Customer Relationship Management (CRM),CRM Processes, Cross-functional Processes, Implementation,Process Model.I. INTRODUCTIONKnowing your customers better will enable you to servethem better and keep them loyal forever. This is the maintheme of Customer Relationship Management (CRM).However, the understanding of the meaning of CRM is stillincomplete and growing. CRM can be understood as abusiness philosophy, a business strategy, a business process,or a technological tool. As a business philosophy Reference[1] stated that "CRM is a relationship orientation, customerretention and superior customer value created throughprocess management". As a business strategy "CRM is acustomer-focused business strategy that aims to increasecustomer satisfaction and customer loyalty by offering amore responsive and customized services to each customer"22
International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 1, April 2011This paper aims to provide an extensive review of thedifferent perspectives of CRM processes in an organizationin order to increase and enhance the understanding of CRMprocesses that could contribute in increasing the success ofCRM initiatives and reduce the failure of CRM programs. Inaddition, this paper intends to propose an enhancement of theCRM process model by suggesting a pre-implementationplan for CRM programs/systems. The next section of thepaper explains the different forms of CRM while the thirdsection discusses the various perspectives of CRM processes.The fourth section shows the CRM process model and the lastsection provides the conclusion of the paper.II. CRM TYPES/FORMSCRM types/forms will cover the extent in which CRM willact at an organization, where CRM is extending for threelevels; strategic, operational, and analytical [18-19]. Thestrategic type of CRM deals with the creation ofcustomer-centric business culture by which a better valueover competitors is created through taking decisions of whereto better invest the organization's resources. The operationaltype deals with customers' processes automation includingmarketing automation, sales-force automation, and serviceautomation. Operational CRM deals with automation andstreamlining workflow at the front office which includecollecting data, processing transactions, and controllingworkflow at the sales, marketing, and services [6], [10],[20]-[22]. The analytical type deals with increasing customerand organization value using the customer data. AnalyticalCRM builds on operational CRM and analyze customer datato create information about the customer segmentation,customer behavior, and customer value to the organizationusing statistical analysis tools especially the data mining [6],[10], [21], [22].In essence, there is another form of CRM, which iscollaborative CRM. As collaborative CRM works at theCRM operational level, many researchers counted it as asubset of the operational CRM. Collaborative CRM focuseson customer integration using a set of interaction channels [6],[10], [12], [23], [24] and working intimately with selectedcustomers, suppliers, and business partners [21]. Thecollaborative technologies include different communicationmeans such as email, phone call, fax, and website pages bywhich the customer may use at the interaction with anorganization [25]. When dealing with the customer data, theinvolvement of CRM processes is necessary.The next section discusses on the different perspectives ofCRM processes and on how CRM processes interact andintegrate within the three levels of CRM types. At the end ofthe next section, a discussion is provided regarding the mostcomprehensive perspective of CRM processes.III. CRM PROCESSESThe process can be defined as the way in which things aredone within an organization [18], [26]. Reference [27] havedefined CRM processes as "the activities performed by theorganization concerning the management of the customerrelationship and these activities are grouped according to alongitudinal view of the relationship". References [3] and [28]articulated that the objective of CRM process is to form23customers' perceptions of an organization and its productsthrough identifying customers, creating customer knowledge,and building customers relationships. Reference [18] statedthat CRM processes are categorized into vertical andhorizontal processes, front-office and back-office processes,and primary and secondary processes. He articulated thatvertical processes refer to the processes that are placedcompletely within business functions like customeracquisition process while, horizontal processes refer to thecross-functional processes like product development process.Front-office processes refer to the customer facing processeslike complaint management process while, back-officeprocesses refer to the hidden and non-facing processes fromcustomers like the procurement process. The primaryprocesses are the processes that have major cost or revenueimplications for organizations like the logistics process incourier organization and claims process in insuranceorganizations while, the secondary processes are theprocesses that have minor cost or revenue implication fororganizations. Reference [29], on the other hand, haveidentified three levels of CRM processes; (i) thecustomer-facing level, (ii) the functional level, and (iii) thecompanywide level. Moreover, there are different views andperspectives for the CRM processes where the followingsections will provide a description of the main themes ofthese perspectives.A. Customer-facing level CRM processesAccording to Reference [29] CRM process at thecustomer-facing level can be defined as "a systematic processto manage customer relationship initiation, maintenance, andtermination; across all customer contact points to maximizethe value of the relationship portfolio". There are three CRMprocesses at the customer-facing level of CRM includingrelationship initiation, relationship maintenance, andrelationship termination [29]. Reference [27] provided anexplanation for each one of these processes as the following:a) the initiation process refers to the activities that take placebefore or in the early stages of the relationship, such asidentifying potential customers; b) the maintenance processincludes the activities that portray normal customerrelationships, such as cross-selling, up-selling, or retentionprograms; and c) the termination process includes both theactivities used to find and settle on ending a bad relationshipfor example, ending the relationship with unprofitable, or lowvalue customer, and the termination management activities.This process could happen at any time of the relationship.The customer-facing level CRM processes includes thebuilding of a single view of the customer across all contactchannels and the distribution of customer intelligence to allcustomer-facing functions [29]. This perspective emphasizeson the importance of coordinating information across timeand contact channels to manage the entire customerrelationship systematically [29].B. Customer-oriented CRM processesCustomer process encompasses the customer activitiesperformed to satisfy a need or to solve a problem [30].Reference [30] indicated for the semi-structured andknowledge intensive nature of the customer-oriented CRMprocesses. In addition, they have differentiated among three
International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 1, April 2011kinds of customer-oriented CRM processes; (i) CRMdelivery processes, (ii) CRM support processes, and (iii)CRM analysis processes. CRM delivery processes are theprocesses of direct contact with customer and are consideredas part of the customer process including campaignmanagement process, sales management process, servicemanagement process, and complaint management process.CRM support processes deal with accomplishing supportingpurposes through the market research process and loyaltymanagement process while, CRM analysis processesconcentrate on combining and analyzing the collectedcustomer knowledge in other CRM processes, including theprocesses of customer scoring and lead management,customer profiling and segmentation, and, feedback andknowledge management.C. Cross-functional CRM processesFive generic cross-functional CRM processes based on aholistic approach of [31] including (i) the strategydevelopment process, (ii) the value creation process, (iii) themultichannel integration process, (iv) the informationmanagement process, and (v) the performance assessmentprocess. Reference [19] illustrated how four of these CRMprocesses are allocated to the CRM forms; strategic,analytical, and operational those mentioned before, and howthey interact with each other, as depicted in figure 1.Reference [32] suggested four CRM processes includingstrategic planning, information management, customer value,and performance measurement processes. The categorizationof [32] is very close to [31] classification where, there sharephases between the two views and some of them are includedwithin one another.Figure 1. The interrelated CRM forms and processesThe strategy development process (figure 1) encompassesan interactive set of strategic processes that inaugurate with adetailed review of an organization's strategy where, the focuswithin this process is on the organization's business strategyand customer strategy [31]. Firstly, the consideration of theorganization's business strategy is to detect how it should bedeveloped and evolve over time, then it could instigate with areview of the organization's vision, and the industry andcompetitive environment [31], [33]. The organization'scustomer strategy entails the identification of the existing andpotential customer base and recognition of the mostappropriate form of customer segmentation [31], [33]. Inaddition, Reference [33] indicated for the necessity of thealignment and integration between an organization's businessstrategy and customer strategy, as they are developed atdifferent functions of the business. On the other hand, thestrategic planning process of [32] involves the presentation ofthe way for the development, implementation and evaluationof the CRM process in the organization and encompasses theassuring of that the focus of the organization's strategy is onproviding superior customer value.The value creation process, in this process, programs forextracting and delivering value are developed based on theoutputs of the strategy development process [31], [33]. Theelements of this process are a) the value the customerreceives, b) the value the organization receives, and c)maximizing the lifetime value of desired customer segmentsby the successful management of the this value exchange ofthe co-creation or coproduction process [31], [33]. The valuethe customer receives refers to how the customer evaluate therelative importance of the various attributes of products andservices of an organization while, the value the organizationreceives refers to the customer value that result fromincorporating the customer in the production of the productsand services, and the utilization of enhanced acquisition andretention strategies and effective channel management [31].Reference [32] used the customer value process as anindependent process to indicate for turning the organization'sunderstanding toward producing products and deliveringservices that deliver value, and for incorporating thecustomer in the design and production of new products orservices.The multichannel integration process, in this process,value-adding activities are created with customers based onthe outputs from the strategy development process and thevalue creation process [31], [33]. The focus of this process ison deciding a) what channels to be used (e.g. sales force,outlets, telephony, direct marketing, e-commerce, andm-commerce) , b) ensuring highly positive interactionthrough the used channels, and c) creating a single unified24
International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 1, April 2011view of the customer at the interaction through more than onechannel [31], [33]. This process is neglected from thecategorization of [32].The information management process in which customerdata and information is gathered from customer contactpoints and used to create proper marketing responses[31]-[33]. In addition, it involves initiating customer insightthat can be used to boost the quality of the customerexperience [33]. Its elements are data repository, IT systems,analytical tools, and front office and back office applications[31]. In addition, Reference [31] stated that: "Theinformation management process provides a means ofsharing relevant customer and other information throughoutthe enterprise and “replicating the mind of the customer.” Toensure that technology solutions support CRM, it is importantto conduct IT planning from a perspective of providing aseamless customer service rather than planning for functionalor product-centered departments and activities. Furthermore,data analysis tools should measure business activities. Thiskind of analysis provides the basis for the performanceassessment process".The performance assessment process in which the assuringof achieving an organization's strategic aims in terms ofCRM to a satisfactory standard is covered and the basis forfuture improvement is established [31]. Its components areshareholder results and performance monitoring [31].Reference [32] used the performance measurement processwhich includes the performance assessment process and thecontinuous monitoring of CRM activities over time, inaddition to capturing customers' feedback regarding CRMpractice in the firm and assuring that both the organizationand the customer goals are achieved.relationships and interaction productivity between buyer andseller, where this interaction could be an exchange ofproducts and services for money, information exchange, orsocial exchange [34]. Reference [34] stated that theinteraction management process has three dimensions;interaction consistency, interaction relevancy, and interactionappropriateness. They defined the interaction consistency as“the extent to which an interaction varies from and buildsupon the preceding stream of buyer–seller interactions”.They defined the interaction relevancy as “the degree towhich an interaction creates value within the context of abuyer–seller relationship” and defined the interactionappropriateness as “the extent to which an interactionmaximizes both customer value and the long-term return onorganizational resource investments”.There are various perspectives of CRM processes,however, the cross-functional CRM processes perspective isthe most comprehensive, detailed, and complementaryperspective. The other perspectives can be seen as embeddedin the cross-functional perspective. For example, thecustomer facing level processes are included in themulti-channel integration process. The same thing is trueregarding the customer-oriented CRM processes perspectivewhere, the three processes within this perspective; CRMdelivery, support, and analysis processes can be foundrespectively embedded in the multi-channel integrationprocess, the value creation process, and the informationmanagement process. Another example, if we look at thecustomer facing level processes, it provides a very initial andgeneral theme about what happen at managing the customerrelationships. The customer facing level processesperspective explains that the process of CRM stats withinitiating a relationship with the customer, then trying tomaintain and enhance the relationship and finally, once therelationship becomes unprofitable, it can be terminated andthe organization can get rid of the customer. On the contrary,the Macro-level CRM processes perspective shown a twohigh level CRM processes at the organizational level. Thisperspective revolves around creating and capturing customerknowledge and exploiting this knowledge in creating andmanaging the interaction with customers.Thus, the cross-functional CRM processes perspective isthe most pervasive perspective of CRM as it explain not onlylist of mere processes but also it explains the nature of eachprocess, the main activities within each process, and howeach process interact with one another. It provides a coherentand iterative notion for the CRM processes. Therefore, itcould be the best perspective of CRM processes in terms ofproviding a deep explanation of each CRM process whichenable the better understanding of CRM towards thesuccessful adoption and implementation.After explaining the different perspectives of CRMprocesses, the following section is dedicated to elaborate themodel of CRM process that clarifies all the corporate andmarketing requirements of CRM processes.D. CRM Macro-level processesCRM macro-level processes refers to the undertakenactivities of an organization to create market intelligence thatthe organization can leverage to build and sustain aprofit-maximizing portfolio of customer relationshipsthrough two sub-processes; knowledge management processand interaction management process [34]. The knowledgemanagement process and the interaction management processare highly dependent on the technological and humanresources of the organization [34].Knowledge management process is defined from CRMperspective by [34] as the process that "is concerned with allof the activities directed towards creating and leveraging themarket intelligence that firms need to build and maintain aportfolio of customer relationships that maximizesorganizational profitability". The knowledge managementprocess can be sub-divided into three processes; datacollection, intelligence generation, and intelligencedissemination [35]. Data collection refers to the capture ofinformation related to the market and customers. Theintelligence generation refers to the conversion of thecaptured information into actionable intelligence witch needsto be disseminated in the intelligence dissemination processacross the organization to all employees who have a directcontact with the customer or working on the marketingactivities of the organization.The interaction management process refers to the utilizingof the market intelligence to strengthen customerIV. CRM PROCESS MODELReference [36] have proposed a CRM process model thatemphasized on the corporate and marketing requirements fora successful CRM process. Figure 2 illustrates the model.25
International Journal of e-Education, e-Business, e-Management and e-Learning, Vol. 1, No. 1, April 2011Figure 2. CRM Process ModelThis model starts with the development of customerstrategy in which the target market is identified.Differentiated strategies are developed to deal withcustomers segments based on their profitability. Then, thesetting of customer objectives is performed that aim forachieving customer satisfaction, customer loyalty, andcustomer value. After that, assessing the organizationalreadiness is carried out through turning the organizationfocus toward customer rather than products, assuring the topmanagement commitment and support, and planning for theimplementation of a CRM system. Next, an alignment of theorganization behind corporate CRM goals that required anenterprise-wide program of change management isaccomplished that may include change in the organizationalfundamental processes or a fundamental transformation er-centric). After that, the execution of CRMprograms is brought about, in which the focus on carrying outdifferentiated strategies for each customer segments byspecific program. Finally, the measurement of CRM programeffectiveness is carried out through the development of a setmetrics that are supposed to measure the attainment ofcustomer objectives, to measure the contribution of eachindividual program to the overall CRM initiative, to measurethe contribution of each program in the enhancement of anorganization’s data capability, and to measure the potentialfor improving the future programs.This model illustrates a simple representation of therequirements for CRM processes toward achieving theobjectives of CRM initiatives. However, it can be improvedand enhanced in order to provide a better illustration andrepresentation of the requirements of CRM processes.The first thing that can be suggested here is the adding ofone requirement at the beginning in the model, which iscreating a customer-oriented culture in the organization. Thiscustomer-oriented culture will aim to initiate the need andcreate the awareness of CRM and the importance of the mainprinciples and values of CRM. Another thing that couldenhance the model is reflecting the feedback after measuringthe program effectiveness step to the development ofcustomer strategy. Based on this feedback it could be a needto change the target market, the customer segmentation, orthe differentiation strategies.The understanding of CRM processes discussed earlieraccompany with the guidance of this process model and thesuggested enhancements of the process model will providegreat help for organizations to increase the success rate oftheir CRM programs/systems.V. CONCLUSIONIt becomes a matter of fact that the implementation ofCRM initiatives and programs have faced with failure overdifferent industries and businesses. In addition, theunderstanding of CRM and its different aspects likedefinition, scope, processes, and technology is still limitedand shallow. The previous discussion of the fundamentaltheory of the CRM processes is very important to strengthenthe understanding of CRM, before planning for the adoptionand implementation of CRM initiative. The understanding ofthe main components of any CRM initiative is very essentialfor its success. People, technology, and process are the threemain components of CRM. This paper provides an extensivereview of the literature for the CRM processes. In essence,there are three CRM types or forms that extend inorganizations which are strategic CRM, operational CRM,and analytical CRM. From the critical analysis of theliterature there are four main perspectives of CRM processeswhich are customer facing level processes, customer orientedprocesses, cross functional CRM processes, and CRMmacro-level processes. They are different, integrated, andplay complementary roles for achieving the goals of anyCRM initiative. The understanding of the CRM processes asone of the main elements of any CRM program is importantfor understanding the amount of change and for identifyingthe required integration with other business processes forensuring the successful CRM implementation.The understanding of the expected benefits of the CRMprogram and the enabling of the organization to measure theinfluence and implication on the organizational performanceof the CRM program are other two important dimensions ofthe benefits of understanding CRM processes. Hence,understanding these processes will help the organization toplan well for the implementation of CRM program/systems.This paper suggests an important step before theimplementation of CRM programs/systems, which is the26
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through identifying customers, creating customer knowledge, and building customers relationships. Reference [18] stated that CRM processes are categorized into vertical and horizontal processes, front-office and back-office processes, and primary and secondary processes. He articulated that
