The CRM Performance Measurement Process

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Int. J. Emerg. Sci., 2(1), 134-148, March 2012
ISSN: 2222-4254 © IJES

CRM Performance Measurement Process

Reza Allahyari Soeini, Behzad Jafari, Mohammadreza Abdollahzadeh NOORETOUBA Virtual University, Tehran, Iran, NOORETOUBA Virtual University, ICT research center of IS, Iran, NOORETOUBA Virtual University, Tehran, Iran,

Abstract. Customer Relationship Management (CRM) has become one of the tools to make competitive advantage in various businesses by the advantages it has made for companies. Despite of many advantages of implementing CRM such as cost decrease, satisfaction and retention and customer loyalty increase, high failure rate of CRM projects is one of the main obstacles of approaching expected results of this implementation. A CRM effectiveness measurement mechanism can increase the probability of CRM projects success by recognizing its weak and strength points. This research aims to present a clear image of CRM performance measurement process in a performance measurement framework. CRM performance measurement process includes three main steps as follows: "introducing CRM performance factors", "measuring effective factors on CRM performance mechanism" and "presenting a proposal to improve weak points of the system". One of Iranian governmental companies will be used as a case study to test the feasibility and usefulness of CRM performance through this framework. Keywords:Customer relationship management, performance measurement, effectiveness, effective factors on CRM performance

Change in theory of a business market form product-oriented to customer-oriented with the aim of increasing the profit is one of the most important economical strategies at the present time. This strategy is known as Customer Relationship Management (CRM) [1].Approach to various advantages of implementing CRM would face a serious problem that is high failure rate of CRM projects. Many researches are performed by various institutes on failure rate of CRM projects in different time periods. For instance Gartner group has announced that around 70 percent of CRM projects have failed or have not faced the expected improvements on CRM performance [2]. Forrester Research center also has announced failure rate of CRM projects equal to 47 percent in 2009 [3].This high failure rate has increased implementation risk of CRM projects and made direct and indirect disadvantages to the organization. Direct disadvantages are related to financial resources used for

Reza Allahyari Soeini, Behzad Jafari and Mohammadreza Abdollahzadeh

CRM projects and indirect disadvantage is damaging business in sight of customers who have not received good services. Ref.[4], believes that some of the reasons for CRM projects' failure are as follows: behaving CRM as just a software system, lack of supports of senior manager of CRM project, weakness of customer-oriented culture, weakness of management in changing the organization. Lots of researches have been done until now by various researchers to find critical success factors in implementing CRM and making its success model [5,6]. These researches could recognize the most important factors effective on CRM project success however they have been weak in making an integrative view regarding effective factors on CRM success as a macro business strategy [7]. Considering multi dimensional nature of CRM, it is necessary to have an integrative view to the whole CRM body. On the other hand, existence of a measuring mechanism in organization would make the possibility to manage, control and measure the effectiveness of CRM and done performances in this regard [7]. In other words, CRM performance measuring mechanism would make a thorough image of implementing CRM strategy for decision makers of each organization about their own organization through the possibility of judgment against weak and strength points of CRM system. Therefore it can help them to decrease failure risk...
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