Information System and Management Strategy of Customer Relationship

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Information System and Management Strategy of Customer Relationship Management Zhong-hong Sun 1 The Computer Center, Lu Dong University,264025,Yantai sun_zhonghong@sina.com Abstract This report explores CRM’ s implication on information, business strategy, as well as an issue which will influence successful implementation of CRM . Furthermore, this report analyzes factors which will barrier or promote information flow within organization. Through facilitating information flow across organization, CRM systems can assist organizations to have better understanding of customers, therefore to increase customer satisfaction, boost customer loyalty and maximize customer lifetime value through delivering tailored products and personalized services. Additionally, organizations can use customer knowledge to support business strategy’s implementation. However, in order to effectively manage the generation, dissemination and sharing of customer knowledge, which is very crucial in retaining competitive advantage of organization, organizations cannot solely depend on the technology components of CRM and should integrate CRM with knowledge management tools. Moreover, successful implementation of CRM systems requires change of organizational culture. example, in 2001, the failure rate of CRM projects was estimated to between 55 and 75 percent. (Kotorov, 2003). One of the major reasons which caused this failure was lack of understanding of what CRM initiatives entail (Goldenberg, 2000 cited in cited in Chen & Popovich 2003). These failing organizations believed that CRM was only a technological solution. However, like other information technology, the implementation of CRM will have many impacts on organizations and require many changes within organizations. In order to enable CRM’s successful implementation and achieve business objective, Organizations need to adopt the changes. Therefore, the aim of this report is to facilitate the comprehension of the CRM through using MIT framework (Scott Morton, 1991) to analyze how CRM systems influence organizations and exploring the CRM’s implication on information and business strategy.

2. CRM Defination

1. Introduction

With the development of technology, mass production techniques and globalization, product availability for consumers and competition within industries have increased dramatically in recent time. Consequently, business orientation has moved from products to customers. Moreover, Customer relationship management (CRM), through gaining customer related information and knowledge, offers organizations a competitive edge on comprehensive, reliable understanding of their customers, which can result in better managing customer relationships, thereby increasing customer satisfaction and boosting customer loyalty [1]. It will also help the organizations to achieve high revenue and low operational cost. Therefore, nowadays CRM has become a very dynamic information technology topic. However, in reality, there have been many failed CRM projects. For

According to Bose[2]: “CRM is an enterprise-wide integration of technologies working together, such as data warehouse, Web site, intranet/extranet, phone support system, accounting, sales, marketing and production.” Additionally Rigby, Reichheld & Schefter (2002) claimed, “ CRM can be defined as a process/application that permits organizations to gather and analyze customer data rapidly while seeking to improve customer loyalty via targeted products and services.” Comparing the above two definitions of CRM, Bose (2002) focuses more on the technology components of CRM, while at the same time defining CRM as a strategic role within the organization. However, the Rigby definition focuses more on the process and aim of the CRM. Although it is hard to define what CRM really is, the combination of the above two definitions can draw a rough picture of it. Basically, in practice, the CRM systems capabilities are: using information technology to...
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