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Effective CRM Implementation through Critical

Success Factors: Evidence from Pakistan

Saba Shakeel1
Research Scholar
Karachi University Business School, University of Karachi, Pakistan
sabashakeel90@yahoo.com

Dr. Danish Ahmed Siddiqui


Associate Professor
Karachi University Business School, University of Karachi, Pakistan
daanish79@hotmail.com

ABSTRACT
Innovative organizations continuously adapt in response to the environmental changes and
competitiveness. Increasingly transforming communication technology allows businesses to
come up with customize offerings to acquire, retain and grow customers. Customer
Relationship Management (CRM) system plays a role of liaison between organization and
customers and justifies customer-orientated culture. However, researchers have identified that
almost about 70 per cent of all CRM projects failed to achieve expected desired outcomes by
the companies around the globe. Therefore, this study is undertaken to empirically test the
critical success factors of CRM solution to measure the viability of a substantial investment by
entities in a technological-driven business strategy in the context of Pakistan. Primary data is
collected through internet-based survey from employees associated with Sales, Marketing and
IT functions of any sort of CRM solution deploying companies operating in Pakistan. Empirical
results are verified through Consistent PLS algorithm and Bootstrapping calculation under
SmartPLS 3. The results of this research suggest that top management support, information
technology, skillful and trained staff, organization culture and customer information are highly
significant in contributing to effective implementation of CRM solution in Pakistan.

Keywords: Customer Relationship Management (CRM), Critical Success Factors (CSFs),


Pakistan, CFA, SEM, information technology, organization culture, customer information

1 Corresponding Author

Electronic copy available at: https://ssrn.com/abstract=3510622


Chapter I: Introduction
1.1. Background
Undeniably CRM success has been very encouraging for businesses and promising in mid 90s.
However, number of problems reported by past researches that initiated concerns over its
implementation. Surprisingly, inclination of issues associated with deployment of CRM are
classified as organizational factors rather than technological. Organizational factors include
change and resistance, numerous perspective of data pertaining to clients and transformation
in business processes (Sebjan, Bobek, & Tominc, 2014).

Further, the authors (Tangaza, Muhammed, & Bala, 2015) cited in a study that western firms
have perceived that organizational factors are more responsible to the effectiveness of CRM.
Contrarily to this study these authors (D. & K.C., 2003) reinforce the importance of national
culture or country context while making business decisions. CRM replicated as per the norms
and behavior of western organizations will never bring the identical results in the non-western
firms.

Level of infrastructure and technological advancement are the determinants which need to be
present at every stage of CRM deployment. Countries ignorant from the high level of
telecommunication infrastructure and improved marketing prospective will not be achieved
desired results from CRM adoption (Lin & Xue, 2011). So it is essential for practitioners to
evaluate and researchers to examine statistically factors considered as critical to effective CRM
implementation in a particular country.

Innovative organizations continuously adapt in response to the environmental changes and


competitiveness. It also helps in enhancing value for customers and securing consistent returns.
Increasingly transforming communication technology allows businesses to come up with
customize offerings and personalize solutions to acquire, retain and grow customers.

This opportunity can be availed only by organizations which make the effective use of
sophisticated technologies and integrated information systems. Customer Relation
Managements (CRM) solutions are computer software which allow organizations to develop
relationship with clients and potential clients one to one (Tileaga, Nitu, & Nitu, 2013). CRM
system plays a role of liaison between an organization and customers. It is one of the integrated
ideas of IT and business with a prime objective to develop sustainable customer relationship
through two way communication.

Over the last two decades, CRM has grabbed the attention of practitioners and academics due
to its significance to businesses and as a value creation tool. Vendors of CRM systems want
their clients (companies) to believe that it will help them to structure huge customer data with
little or no internal IT support. They also claim that it does not involve multifaceted or real-
time integration with other relevant systems. Such claims make the demand of CRM high.
However, customizing of such system can be difficult and expected level of integration cannot
be achieved through the interface tools of CRM vendors (Tileaga, Nitu, & Nitu, 2013).

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1.2. Research Problem
Researchers have also identified that almost about 70 per cent of all CRM projects failed to
achieve expected desired outcomes by the companies (Farhan, Abed, & Ellatif, 2018). Another
study notified a cost up to 100 million US dollars being suffered by a firm despite having
implemented CRM solutions. Further, the study quoted a case of a firm related to health care
sector which lost its clientage by 6 per cent while dealing with difficulties in initiating CRM
solution (Tangaza, Muhammed, & Bala, 2015). Moreover, significant failure rate of CRM
projects is also being observed in some studies relevant to commercial markets (Varajao &
Cruz- Cunha, 2016).
Understanding the above cases it is analyzed that CRM is still a significant investment with
low recognize return. It is an alarming situation which urges researches to come up with facts
and empirical testing that may highlight some success factors and their contribution which help
to attain effective implementation of these projects and mitigate risk indicators. It can be served
as an approach to retrieve optimum benefits of highly demanded communication technology.

1.3. Research Objectives and Questions


Breakthrough in information and communication technology push entities to adopt new
methods of networking with customers. As modern businesses have recognized the
significance of customers and their heart core position for a sustainable business (Bahrami,
Ghorbani, & Arabzad, 2012). Therefore, to make investment in technologically driven tools
must bring desired results. In order to make this decision viable and feasible and assist
companies in mitigating risk of failures there is a compulsion to guide strategists about the
factors which are helpful in the successful CRM strategy.
To fulfil the research need the paper is presented to verify previously identified critical success
factors of CRM implementation in a context of organizations operating in Pakistan. The prime
objective is to empirically test the CSFs of CRM solution a gap being identified in past
researches. So the statistical testing will be verified through Consistent PLS algorithm and
Bootstrapping calculations under SmartPLS 3.

The study is primarily involved in statistical testing of critical success factors relevant for the
effective CRM implementation in the context of Pakistan. However, before initiating work on
the main study the author is required to undergo few generic questions which are also part of
this paper.

 How many companies are implementing CRM in Pakistan?


 Which sector is aggressively implementing CRM solutions?
 What type of CRM solutions are being implemented by companies operating in
Pakistan?
 Which functions of the organization are mainly concern with the implementation and
practice of CRM?

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 What is the contribution of organizational, technological, process and project factors in
effective implementation of CRM?
 What is the significance of organizational, technological, process and project factors in
effective implementation of CRM?

The factors chosen for empirical testing are the gap identified in a review (Farhan, Abed, &
Ellatif, 2018). These critical success factors can also be found in more than 180 studies and
researches that were systematically and rigorously reviewed with an aim to identify typically
accepted CFAs for CRM implementation. Identifying similarities in the success factors among
organizations that have implemented CRM is a way to manage and control resources and
investments of organizations planning to invest into CRM and making the decision fruitful for
relevant stakeholders (Farhan, Abed, & Ellatif, 2018).

The review has come up with a comprehensive list of CRM CFAs, identified related measures
of all most accepted CFAs and classifying such CFAs into distinct groups (organizational,
technological, process and project) as per their inner properties. Due to inter dependability and
interrelationship one factor may appear in more than one group or category. However,
empirical testing of such CFAs in the light of the identified metrics is the gap identified for
future researchers and this studying is filling out the gap.
The ultimate objective of this paper is to empirically verify the five critical success factors of
CRM solutions on the basis of evaluation matrices identified through an academic review
(Farhan, Abed, & Ellatif, 2018).

1.4.Gap Analysis
(Rahimi & Berman, 2009) conducted a qualitative study based on a sample size of 20
companies evaluated the causes of success and failure of CRM project in relation to planning
and implementation stages. This study also carried out quantitative methods to identify success
factors of CRM. Questionnaire via internet were circulated and gathered 2210 responses.
However, merely 821 responses (37 %) were analyzed in evaluating the conclusion.
A study identifying the impact of involvement in CRM initiative on organizational
performance and inter – functional integration is carried out. The research is undertaken by
utilizing online survey techniques from a sample size of 30 large companies of Pakistan. The
findings highlighted positive but insignificant effect of planning, implementation and usage of
CRM project on organizational performance. The study has two limitations firstly, sample
companies were selected randomly on the basis of popularity of entity and size of industry not
on the basis of CRM implementation. Secondly, only marketing managers filled out the online
survey. Input from IT personnel have not been taken (Ashraf, Hamyon, Khan, Jaafar, &
Sulaiman, 2015).

Another study is done in context of private Higher Education Institutions in Sri Lanka to
identify relationship between CRM practices and customer satisfaction empirically testing are
undertaken. The findings highlighted that there is a positive and direct relation between
customer satisfaction and by CRM initiatives. However, the study has geographical limitation

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as well as restricted to private education sector offering undergraduate degree program
(Adikaram, 2016).

This research is conducted by analyzing the impact of CRM throughout the organization so
study must not be limited to Marketing functions only. Moreover, past researches significantly
highlighted success and failure factors but did not mention their magnitude. A systematic
review has identified a gap of empirical testing of suggested critical success factors for CRM
implementation in the light of given matrices (Farhan, Abed, & Ellatif, 2018). The review is
based on study of 182 publications focusing on CRM success/failure factors. This research is
a way to carry out the study further by working on gaps like empirical testing. Relative to the
sample size of 21 Portuguese companies and 85 responses to identify the motivation of CRM
adoption (Varajao & Cruz- Cunha, 2016) large sample size (61 companies/122 responses) of
this research is representative of significant industries operating in Pakistan.

This research is unique in different ways like: workforce of non – listed companies is also
participated in survey who is generally reluctant to share company information due to
confidentiality. It facilitated the author to incorporate comprehensive view of customer –
orientation in business environment of Pakistan.

Moreover, respondent’s organization are chosen carefully after confirming the presence of
CRM technology as well as the type/name of CRM software. Furthermore, survey is being
filled out by Marketing, Sales and IT Personnel who are frequently involved in dealing with
CRM so able to respond appropriately. Each variable with five average questions is sufficient
to evaluate its impact on CRM implementation. The research also highlighted how to ensure
valid responses and discussed ways of collected data through internet which could be
significant for future studies in any field.

1.5. Significance of the Study


The paper can be relevant in the following manner:

As the study is done within the context of Pakistan so those corporate sectors which are
planning to deploy CRM solution will get a comprehensive view of success factors required to
be maintained in order to achieve desired objectives from the investment in CRM technology.

Further, organization already deploying CRM solution can channelize the information flow
with the inclusion or exclusion of certain functions like marketing communication, customer
service, compliant management department and data management department.

Vendors of CRM could get help about the advantages of CRM and apply it as persuasive
technique to increase sales and profits. It will guide organizations implementing CRM about
the actual contribution of organizational, technological, process and project factors.

The findings may help organizations to transform their approach of deploying CRM solutions
and can achieve the expected outcomes from technological-driven business strategy and get
best returns from investment in IT systems. The study will help in minimizing the risk factor

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of investing into CRM projects by the organization planning to do so. CRM vendors also devise
marketing strategies based on the finding of this paper and get favorable response.

Chapter II: Literature Review


This section is organized to define, explain and explore the meaning of the terms and variables
used in this paper in the light of literature has already been developed in the past. The purpose
of this chapter is to systematically endorse previous studies relevant to the research topic and
objectives of this paper. In other words, it is a way of providing validation of the concepts being
statistically verified through this study.

2.1. Customer Relationship Management Solutions


Researches attempted to comprehend Customer Relationship Management (CRM) has reported
numerous definitions and terminologies to make the concept understandable. There are three
broad perspectives associated with the definition of CRM and backed by multiple recent
researches. CRM can be understood as (a) a business philosophy, (b) a business strategy or (c)
a technological tool (Hussain, Siddiqui, & Haider, 2016).

The manner CRM being defined by the companies also influences its implementation and
practice. CRM as technological tool is relevant for effective initiative but understand CRM as
strategy will help in aligning entire organizational resources and stake. Moreover, CRM as
philosophy provides the foundation to this customer-centric business strategy (Tangaza,
Muhammed, & Bala, 2015).
According to a recent research (Tangaza, Muhammed, & Bala, 2015) trying to define CRM
identified that when we dig down the origin of CRM, relationship marketing is found because
both are connected with identical principles. However, terminology of CRM is derived with
the combination of relationship marketing and customer management. Breakthrough in
communication and information technology (ICT) provides wider assertion to the concept of
personalize marketing and focus on selling to individual customer as many offerings as
probable.

CRM is all about building, managing and growing most profitable customers effectively.
Another study pointed out that this idea is widely accepted by modern marketers who are more
likely to analyze and control marketing activities as customer-driven rather than product driver.
They are interested to win customer loyalty develop on relationship context in a long term
instead of one time profit earned as a sale transaction. They encourage to view interaction with
customers in a relationship dimension rather than handling every transaction as an individual
event. (Varajao & Cruz- Cunha, 2016).

In simple words it is concluded that CRM solutions is a persuasive approach of organizations


to empathize and influence behavior of customers (Farhan, Abed, & Ellatif, 2018). CRM
enables companies to overcome lower efficiency of mass marketing and replacing it with
greater customization through connecting with customers frequently and utilizing multiple
contact points. (Tileaga, Nitu, & Nitu, 2013) (Tangaza, Muhammed, & Bala, 2015).

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Customer-orientation can be fruitful for firms due to innumerable advantages associated with
it like loyal customer base, greater retention ratio (Farhan, Abed, & Ellatif, 2018), effective
service quality, high customer satisfaction (Adikaram, 2016) greater sale thus certain
profitability (Sebjan, Bobek, & Tominc, 2014). Modern customers require real value addition
in order to let businesses win competitive edge and chose their offerings over multiple
substitutes.

Therefore, businesses through such strategy retain and grow existing customer base because to
earn new customers are a way expensive (Tangaza, Muhammed, & Bala, 2015). These
customer and business related factors encourage organizations to adopt such tools which
objectify decision-making through informational infrastructure (Tileaga, Nitu, & Nitu, 2013).

2.2. Critical Success Factors


The authors (Farhan, Abed, & Ellatif, 2018) generally define critical success factors as a
technique of focusing those elements, indicators or contributors responsible to the effective
implementation of a project. Further, these are the factors which actively lead to success and
the absence of which lead to obstacles in effective deployment of a venture in or by the
organization.
Specifically, CSFs have also been defined with reference to CRM by numerous past
researches. Past studies inferred that there are some generic elements which need to be
present to make CRM implementation a success known as CSFs. These factors guarantee the
effective deployment of CRM.

A study with rigorous and systematic literature review identified CRM CSFs. The study
undertook scientific approach in planning, conducting and reporting the review. The
objective of the paper does not limited to identifying CSFs but also highlighting the matrices
so each factor could be measured for further empirical studies.

Firstly, authors developed an all-embracing list of 54 critical factors in the field CRM
projects extracted by reviewing more than 180 studies and researches. The objective is to
guide companies about CRM project effectiveness through highlighting frequently endorsed
and similar success factors. The review inferred them as most accepted success factors for
CRM project. Secondly, 51 researches and publications are undertaken in the field of
effective deployment of CRM and CRM CSFs in a tenure of 12 years (2005-2017). Upon its
literature review, 30 critical success factors are summarized and complied in a list. Further,
these factors are classified into four groups and each factor is classified in more than one
group due to inter – dependability and interconnectivity (Farhan, Abed, & Ellatif, 2018).

The study also ranked success factors based on highest frequency in past researches.
Therefore, top five CSFs are chosen for empirical testing in context of Pakistan by this study.
Moreover, these factors are representative of every classification so results of the study will
give comprehensive view of why companies are successfully implementing CRM strategy.

Figure 1: Critical Success Factors (CSFs)

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Researchers have presented different categories under which success factors are classified.
These classification include organizational, technological, process and project factors.
Following discussion will bring sufficient light on the belongings of factors with certain
classification. It is interesting to note that due to inter dependability and interrelationship
between critical factors it is possible that one factor can be classified in more than one category.

CSFs provide direction to invest resources in an appropriate manner. These factors are criteria
of improvement which should be considered as fixed variables to achieve desirable outcomes
from a project. Moreover, these factors are also considered as least requirement a company
should fulfil in order to attain success in a particular project.

CRM success factors have ability to influence and get influenced by the one another. At the
same time, success factors also change their properties in response to a particular stage of CRM
implementation. Researchers (Farhan, Abed, & Ellatif, 2018) have identified that success
factors required to be executed in specific CRM implementation stage (a. planning, b. defining,
c. design, d. validation, e. deployment stage) in order to achieve optimum output consequently
the success factor will convert into failure factor.

2.2.1. Top Management Support


Top management support is classified as organizational and project factor. It is evaluated on
the basis of matrices including: absolute existence of CRM project in strategic plan of
company, active involvement of senior management, allocation of budget in technology and
communication segment, percentage assign to system integration, degree of alignment of CRM
implementation objectives with the aims of board of directors and efforts of management in
eliminating obstacles in a way of CRM projects.

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Active participation of management in developing CRM strategy, explicit project vision and
scope, setting benchmarking, sufficient budget allocation and necessary efforts to mitigate
obstacles in the CRM initiation process are the prerequisites an effective CRM implementation
demands as top management support (Farhan, Abed, & Ellatif, 2018).

Different researchers and authors express caution to the adverse effects of CRM use which will
be probable when organizations ignore strategic factors like involvement and support of
management, alignment of CRM initiation with organizational vision and mission, inability to
comprehend the benefits of CRM solution at the level of organization as a whole (Sebjan,
Bobek, & Tominc, 2014).
Further, researchers frequently quoted instances of effective CRM implementation from
strategic view point. From utilizing the guiding principles of strategic orientation (technology,
customers, competition, cost management, innovation, entrepreneurial, quality and
productivity orientations) organizations undertake strategic decision-making activities. CRM
implementation often misunderstood as a technological tool merely while suppressing the
strategic aspect that applies more than information technology.

Authors have analyzed how strategic orientation affect the performance of CRM solution and
they found CRM initiation can be smooth and effective in firms where strategic orientation is
dominated (Moghadam, Vahdat, & Arfarafiei, 2013). Hence, top management support is
critical to the effective implementation of CRM to the extent that its absence will obstruct the
advantages of the system on the operations of the organization.

2.2.2. Information Technology


Information technology is classified as technological factors. IT System
(integration/management) is being verified based on the criteria: organizations systems are
capable enough to retain high volume of data, systems containing significant data related to
customers are integrated, average information updating time taken by integrated systems and
average number of systems connected to entertain customers requiring to make a query.

The authors (Ruivo, Mestre, Johansson, & Oliveira, 2014) have attempted to undertake a study
on integrative value of Enterprise Resource Planning (ERP) and CRM through a theoretical
model utilizing the Resource Based View (RBV) by the organizations deploying both
technology-driven software. The study aims to evaluate the impact of integrative value on
organizational performance and success rate of such IT investment.

The model asserts that CRM has power to synergize the value proposition expected to be
attained from ERP could create if no integration would have been developed. The authors
further assert that such integration will foster networking, interaction and relationship among
stakeholders and enable organization to synchronize processes and information previously
been gathered through both software efficiently. These assertions are made upon the rationale
that CRM establishes system which generates information from external sources contrarily
ERP specializes in pooling information through internal sources. Through integrative value the
firm will be able to make the most of this harmony. Precisely, the Information System (IS)

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model proposed by the study targets to measure integrative value of both software in relation
to organizational performance (Ruivo, Mestre, Johansson, & Oliveira, 2014).

However, such integration is very intricate. ERP software is generally aligned with the
operational approach of fulfilling business routines, formal procedures like procurement and
electronically approves numerous transactions. In order to make these systems’ integration
effective CRM functions need to be replicated to the same operational logic. This will unlock
the expected benefits of RBV (Ruivo, Mestre, Johansson, & Oliveira, 2014). RBV benefits
based on VIRO (Value, Inimitability, Rarity and Organizational structure) principle: value
creation, generation of resource controlled by few numbers competing firms, expensive to
imitate and firm must possess such expertise necessary to manage the resource (Barney &
Hesterly, 2017).

2.2.3. Skillful, motivated and Trained Staff


Skillful, motivated and trained staff are also classified as organizational and project factor.
These are analyzed by the indicators including: high ratio of employees with appropriate
awareness of aims and benefits of CRM projects, employee willingness to participate in CRM
training sessions, employee motivation and access to essential resources, efforts of
management to develop employee learning and skills through professional training.

A research revealed a case on banking sector of Iran. The paper cited such research (Tangaza,
Muhammed, & Bala, 2015) reported that the sector realized the importance of CRM and
showed acceptance to CRM as a medium of performing significant organizational functions
like marketing management processes and corporate communication. However, the
deployment of operational CRM in banking sector of Iran is considered as unfavorable and not
feasible due to the extensive use of information and communication technology.

Study also highlighted discussion on success factors contributing to the effectiveness of Iranian
banks in achieving organizational objectives through CRM solutions. It concludes that
employee motivation must remain at the prime of CRM practice and skills to enhance attraction
for customers through art and craft of CRM. Bank managers must be trained to be
communicative customer experience and expectations in relation to service quality and level
of satisfaction and comprehend it at branch level (Tangaza, Muhammed, & Bala, 2015).
Human resource knowledge and suitable administrative support are critical factors for basic
CRM solutions (Bavarsad & Hosseinipour, 2013) (Sarmaniotis, Assimakopoulos, &
Papaioannou , 2013). Further, involvement of employees and their characteristics are crucial
in adaptation of CRM technology. Further, employees under organizational factors contributes
in CRM success. Staff ICT skills are required in CRM implementation (Nguyen & Waring ,
2013).

2.2.4. Organization Culture


Organizational culture is classified as organizational and process factor. To collect primary
data on organization culture matrices used are: companies set such objectives orientation of
which belongs to customer satisfaction, organizations frequently estimate satisfaction of
customers, firms possess tools to measure its degree of commitment in entertaining customers’
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needs, entities have competitive edge in relation to emphasizing and understanding customers
need, after-sales service is an integral part of sales function, key customers are managed
through customized and personalized offerings.

The study (Tangaza, Muhammed, & Bala, 2015) cited a case study of Chinese Telecom firm:
China Mobile which implements CRM and concluded that effectiveness of CRM depends on
the collectivist culture the firm adheres to. It is an important factor needed to be considered for
the critical success of CRM projects to be implemented by other firms in the same industry.
China Mobile incorporates global CRM effectively to manage profitable customers since
relevant stakeholders are familiar with collectivist culture. It also allows the firm to maintain
retention of unprofitable customers which is leading them towards greater market share with
strong customer base.

Another study on global CRM endorsed the idea that technology-driven business strategy can
be successful subject to the culture of respective nation. To test this assertion a study is
conducted to evaluate the acceptance of a website between nations including Germany, USA,
Canada and Japan. The results concluded that western countries with individualist culture have
greater acceptance in comparison to Japanese who demonstrated least satisfaction and little
loyalty due to their national collectivist culture. The case is cited by the study of (Tangaza,
Muhammed, & Bala, 2015).

A study cited by (Tangaza, Muhammed, & Bala, 2015) notified that service quality criteria and
measuring tools must also be consistent and translate into cultural context in order to achieve
optimum returns from the deployment of CRM solutions. Service quality measures vary widely
on consumer perception and the level of service other firms are providing in a same industry
which could be understood in a cultural context. Moreover, enhancing functional and technical
service quality will contribute to affect the perceived service quality according to a research
cited by (Adikaram, 2016)

Another study conducted to determine the relationship between CRM and customer satisfaction
in a context of Private Higher Education Institution in Sri Lanka. The findings showed positive
effect of CRM on the customer satisfaction. The study considered that customer satisfaction is
greatly dependent upon crucial service attributes which need to be highly taken care of by the
service sector organizations. The service quality at every execution point (pre, during and post
service delivery) must be consistent. These attributes are responsible to conclude the level of
satisfaction extracted by the customers upon service obtained (Adikaram, 2016). Another paper
cited that organizational culture is reflected from the business objectives which support
customer-satisfaction orientation (Farhan, Abed, & Ellatif, 2018).

2.2.5. Customer Information Management


Customer information system is classified as organizational, technological and process factor.
Customer Data quality and sharing ability are examined with the help of the following matrices:
potential purchasing power is forecasted by utilizing customer data, companies tap new into
new business segments on the basis of data generated by CRM project, sources of gathering
data is highly integrated, firms maintain customer retention strategy based on reliable data, data
help in managing significant rate of customer satisfaction, firms carry record of decreased
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customer complaints in relation to offerings sold and entities keep encouraging growth rate of
customers acquisition.

One of the positive impacts of CRM solution is that it enables organizations in generating new
knowledge (Sebjan, Bobek, & Tominc, 2014). With such improved information and quality of
data mining organizations can tap new markets, influence existing customers to repeat
purchase, create expected level of value, establish sustainable relationship with customers
which lead firms to achieve favorable image and desired positioning.

Another study (Moghadam, Vahdat, & Arfarafiei, 2013) pointed out that the purpose of CRM
solution is to acquire, analyze and share meaningful information about and with customers. It
will help organizations to provide competitive, real-time and superior quality services to the
customers. CRM systems is an opportunity to record an integrated view of all customer
interactions through software application. Such data with the help of business intelligence are
analyzed and should be utilized as a meaningful and constructive feedback by the
organizations. Effective organizations translate system analysis into business strategies and
develop improved offerings for customer satisfaction and loyalty. However, low quality and
range of data can be responsible for the negative impact on the organizational performance and
create obstacle in achieving objectives.

For effective implementation of CRM right tool of data mining and clear methodology and
steps of acquiring information also possess significance (Sharma & Goyal, 2011). Further,
assessment of tools and processes of data feature, estimation of quality data gathered in relation
to customer, infrastructure of customer data, categories of client data types as well as
classification of data collection sources are the measures of data quality and required for CRM
implementation (Alshawi, Missi, & Irani, 2011) (Garrido-Moreno & Padilla-Meléndez, 2011).

2.3. Hypothesis
The study purposes the following hypothesis

H1: Top management support is statistically significant to the critical success factor for the
organizations which implement CRM effectively in Pakistan

H2: Information technology is not statistically significant to the critical success factor for the
organizations which implement CRM effectively in Pakistan

H3: Skillful, motivated and trained staff are statistically significant to the critical success factor
for the organizations which implement CRM effectively in Pakistan

H4: Organizational culture is statistically significant to the critical success factor for the
organizations which implement CRM effectively in Pakistan

H5: Customer information is not statistically significant to the critical success factor for the
organizations which implement CRM effectively in Pakistan

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Figure II: CRM Success Model

Chapter III: Research Methodology


This chapter is devoted to bring light on the approach and methodology used to carry out this
empirical study. The focus of discussion under this section will remain on the purpose of the
study, what is the design of this research by explaining its type, testing approach and research
organizations in the survey. Moreover, demographics of research sample, sampling techniques
and characteristics of respondents will also be highlighted. Further, hypothesis of the research
will be proposed under this section, data collection journey and designing of questionnaire will
also be communicated. Last component will talk about data reliability and ethical consideration
of conducting this study.

3.1. Research Type


This is a quantitative study which is exploratory in nature. Primary or firsthand data is collected
on organizational, technological, process and project factors in order to investigate the
contribution of top management support, skilful, motivated and trained staff, organization
culture, customer information system and information technology towards the effectiveness of
CRM solution.

3.2. Research Organization


There are 61 companies operating in Pakistan which have participated in the form of 122
responses to the research questionnaire of this study. Each respondent organization is

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implemented some sort of CRM solution. Such organizations can be categorized on the basis
of its listing status on Pakistan Stock exchange (PXS). Respondents belong to both listed and
non-listed companies.

Respondents of listed companies are associated to the following sectors: Technology and
Communication, Pharmaceutical, Textile Composite, Commercial Banks, Investment Banks,
Food and Personal Care Products, Fertilizers, Automobile Assembler, Automobile Parts &
Accessories, Oil and Gas Marketing Companies, Cement, Transport, Power generation and
distribution and Paper and Board.

Respondents of non-listed companies are associated with the following sectors: Media
Company, Television Network, Software Companies, Beverage Companies,
Telecommunication Companies, Clothing Retail Companies and Miscellaneous.

3.3. Population
The companies implementing any sort of CRM solution and operating in Pakistan constitute
total population for this study.

3.4. Sampling
Purposive sample techniques under non-probability sampling methods can best meet the
objectives of this study because generalization of population cannot be applied for this research
(Schmitz, 2012). The study requires companies which has implemented and already deploying
any sort of CRM solution in Pakistan to be filled the questionnaire. In order to meet this specific
criteria sample is drawn from mentioned technique.

3.5. Respondents
The researcher has set out three criteria to be fulfilled simultaneously by the respondent to
become eligible for answering the online questionnaire:
1. The respondent must be employed with a company operating in Pakistan
2. The company must implemented any sort of CRM solution.
3. The respondent must belong to either Sales, Marketing or IT function in a CRM
implementing company operating in Pakistan.
In order to ensure that the respondent has met the mentioned conditions respondent’s profile
section in the questionnaire required respondents to answer name of their organization,
department, designation and company-provided email.

3.6. Data Collection


For this study primary data is collected through internet-based survey. LinkedIn platform is
utilized to contact potential respondents. The researcher with LinkedIn account systematically
undertake the entire data collection process.

The companies are searched via name on LinkedIn webpage and diverted to the official page
of the searched company. There is a table on the left-bottom on home page of company profile
depicting following section Home, About, Jobs, Life and People respectively click on People.

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It will divert to a new page where one can see total number of employees associated with
searched company, their country of residence and institution of study. One can easily view the
number of employees the company have in Pakistan. By typing keywords on search bar like
‘Marketing Pakistan’, ‘Sales Pakistan’ and ‘IT Pakistan’ will narrow down the employees to
be shown in suggestion.

Once researcher had got access to the potential respondents researcher started sending connect
requests with a standardized note describing the research purpose of connection. Upon
acceptance of connection a link of online-survey is in boxed and persuaded time to time via
text message to fill. In total around 1500-2000 connect requests are made to individuals
searched with above stated process succeed researcher to make more than 700 connections
back. The efforts of approx. 60 days generated 122 responses from 61 CRM implementing
companies operating in Pakistan. All responses are considered valid for analysis because by
the interaction with respondents individually all fields are being filled appropriately to ensure
accuracy and reliability.

3.7. Questionnaire Designing


The first general inquiry of questionnaire is pertaining to the type of CRM solution
implemented in the company of respondents. So, at the start of the questionnaire they will be
scanned whether they should fill further or not.
The research instrument is organized in two broad parts:

a. Critical Success Factors


b. Respondent’s Profile.

(Farhan, Abed, & Ellatif, 2018) Identified Critical Success Factors, and empirically test these
CSFs based on specific matrices. So, the main questions are adopted from the matrices
suggested for questionnaire designing. In part a. there are five sub-sections representing
Section I: Top Management Support, Section II: IT systems (integration/management), Section
III: Skilful, motivated, and trained staff Customer service, Section IV: Organizational culture
Section V: Customer data (quality/share). On average five closed-ended questions of five-likert
scale ranging from strongly disagree to strongly agree are being asked under each section. Two
question pertaining to section II have different but closed-ended options.
In part b. respondent’s name, gender, age, education, name of organization, designation,
department and email provided by the company are required to answer.

3.8. Test Approach


Empirical testing of collected data is verified through Consistent PLS algorithm and
Bootstrapping calculation under SmartPLS 3. Construct reliability and validity of each success
factor is viewed through quality criteria and significance of interrelated and interdependent
matrices are analyzed through Path coefficients table in p-value column.

3.9. Ethical Consideration

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Human activities are generally judged on the basis of ethical consideration undertaken at the
time of performance. Writing a research for graduation must also be scanned from some sort
of ethical criteria as it is recommended by American Psychological Association (APA) and
other esteemed regulators. Here are five main principles of research ethics (Anonymous, Basic
Principles of Reserach Ethics, n.) which are taken great care of while conducting the study.

a. Eliminating risk factor or providing harm to others. While conducting the study no harm
is provided to anyone.
b. Prior consent from respondents are taken and informed about purpose of data collection.
c. Safeguarding secrecy and confidentiality of respondents and data collected.
d. Avoid such practices that are deceptive in nature. The purpose for which data is
collected must be utilized in the promised manner.
e. Right to withdraw is provided to every participant. If one was not willing to participate
then they are honored.

Chapter IV: Results


4.1. Overview of Findings
The study focused on achieving primary objectives of empirically verifying the significance of
critical success factors for the effectiveness of any sort of CRM implementation for companies
operating in Pakistan. However, there are few secondary research questions required to be
answered first to provide comprehensive view of findings. In following paragraphs such
questions will be answered.

Primary data reflected that 61 companies operating in Pakistan have presence of CRM solution.
The actual number is much greater but 61 is verified through this study. The ratio of 40:60 is
observed between service and manufacturing sector companies deploying CRM solutions.
Hence, manufacturing sector is more aggressive in implementing CRM in context of companies
operating in Pakistan.

The types of CRM solutions which firms are actively deploying include MS Dynamics 365,
Microsoft Dynamics AX 2009, Salesforce 2.0, ORANGE, CRM Veeva 2.0, S&D or Edge,
ZOHO, vTiger CRM, WCMS, AX Dynamics, GMS/MMS and NPS (Net Promoter Score),
BOSS, 3CX, Mobile Intelligence (MI), ICRM, Fourgen, Tvc, DDS, BI's, NPDMS, CRM
Oracle Sales Cloud, TBP, Tech Mixers, Dealer CRM, ZRT, DTC and Operational & analytical.

Generally, sales, marketing, and information technology (IT) functions are mainly concern in
the implementation and practice of CRM. However, name of department dealing with CRM in
each company may vary on the basis of size and nature of business.

4.2. Demographics
Socio-economic characteristics of population statistically expressed is known as demographics
(Anonymous, Business Dictionary, n.d.). With the help of respondent’s profile section in the
research questionnaire the study has gathered gender, age, qualification of the respondents.

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Out of 122 responses merely 2 responses have been received from female participants. 98.4
% male has responded to the survey. This may be due to presence of greater male employees
in Sales, Marketing and IT functions of CRM implementing companies. It could also be the
limitation of online survey where female are reluctant to participate.

Figure III (a): Gender of Respondents

Significant ratio (59%) of respondents fall under the age group of 26-35 years. However 2.4 %
respondents belong to 56 and above category. The demographics shows that CRM is being
utilized by employees from middle level of their career till retirement and have varying degree
of implications in relation to the age of employees being hired to serve CRM implemented
companies.

Figure III (b): Age of Respondents

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Survey responses showed that employees involve actively in the implementation of CRM
strategy are highly qualified. Statistics of the survey is showing that more than 80% have
Master’s degree, more than 18 % have completed their bachelors and around 2 % employees
others specialized certifications.

Figure III (c): Education of Respondents

4.3. Descriptive Statistic

4.3.1. Top Management Support

Each respondents were enquired six questions to evaluate the role of top management support
as positively critical in implementation of CRM strategy.

Strategic plan is a tool utilized by senior managers for organizational resource planning and
absolute existence of CRM project in strategic planning is an indicator of support from senior
executives. Survey responses showed that more than 81% of the respondents agreed with
varying degree of intensity [Agree (57) strongly agree (43)] that their company have absolute
presence of CRM project in strategic plan. However, more than 7% respondent showed
negative response and 13 (10.6%) participants checked neutral to the idea that there is an
absolute presence of CRM project in their company’s strategic plan

To have top management support means active participation of majority of directors in


implementing certain initiative undertaken by the company. Decision – making at board level
is carried out through majority votes. Survey responses represented that more than 70% of
participants, working in a CRM implemented companies, agreed (59) and strongly agreed (31)
that significant percentage of top level management actively supported CRM project in their

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company. Contrary, more than 12% respondents have negative and 17 (13.9%) respondents
have neutral opinion to this thought.

Rapidly changing businesses environment urges organizations to invest heavily in


communication technologies and make most of its benefits in relation to the customers. It
includes understanding customers’ taste and preferences, developing multiple contact points
and increasing customer retention rate and loyalty. Survey responses reflected that nearly 68
% respondents believe that their company allocates significant percentage of budget in
technology and communication area. However, around 11 % showed negative responses and
almost 21% survey participants are neutral to the budget allocation idea in their CRM
implementing companies.

In order to get meaningful information from data collected by an organizations through keeping
records of sales, customers complaints and customer feedback it requires systems with
analytical capabilities and their integration with data generating sources like sales tracking
system. The integrated network of data collection and analysis can be helpful for entities to
drive desirable objectives from CRM projects. Therefore, companies assign greater budget to
system integration shows their concern to CRM success and indicates top management support.
More than 63% respondents showed assertive [agree (51); strongly agree (26)], 17 % negative
[disagree (16); strongly disagree (5)] and 24 respondents depicted neutral opinion regarding
their company’s assignment of high percentage of budget to system integration.

Top management support can be evaluated from the alignment or consistency between
organizational objectives and fulfilment of CRM initiative. When board members consider it
important to attain desired goals they will devise strategies accordingly. CRM is a business
strategy objectifying customer orientation and profit proliferation. Survey responses
represented that more than 64% [agree (50); strongly agree (29)] respondents believe that in
their company high percentage of broad members objectives are linked with the fulfillment of
CRM. Whereas, around 17% respondents demonstrated disagreement with varying degree of
intensity[disagree(16); strongly disagree(5)] and 22 survey participants checked neutral to the
connection of attaining strategic objectives through successful CRM implementation.

Top management support can also be analysed by the attitude of senior executives and their
problem solving skills. It is significant to refrain CRM initiative from probable constraints
and limitation for its success implementation. Therefore, active participation by senior
executives in the form of mitigating or removing constraints in the way of CRM
implementation is also a valid matric to measure top management support. Survey responses
highlighted around 54% participants agreed with varying degree of intensity [agree (47);
strongly agree (19)], nearly 22% respondents showed disagreement [disagree (18); strongly
disagree (9)] and more than 23% survey participants showed neutral response to top
management active involvement in mitigating constraints in the way of implementing CRM
effectively.

Table I (a): Descriptive Statistics of Top Management Support

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Top Management Support Mean Standard Standard
Deviation Error
There is an absolute presence of the CRM project in 1.96 1.02 0.09
the company's strategic plan.
Significant percentage of our top-level management 2.16 1.02 0.09
is actively participating in CRM projects.
Our company allocates high percentage of budget in 2.17 1.14 0.1
technology and communication area.
Our company assigns high percentage of budget to 2.369 1.085 0.098
system integration.
In our company, significant percentage of board 2.33 1.1 0.1
members objectives connected with fulfilment of
CRM.
Top management of our company removes high 2.6 1.14 0.1
percentage of organizational constraints in effective
implementation of CRM.

4.3.2. I.T Systems

Each respondents were surveyed two questions in order to evaluate the role of IT systems as
positively critical in implementation of CRM strategy.

Data storage capacity of an information system is an essential measure to evaluate the


performance and effectiveness of entire project. More capacity refers to more information,
improved decision – making and probability of achieving desired outcomes is high.
Therefore, CRM implementing companies are asked about data storage capacity of their
systems to infer IT systems as critical to CRM effective implementation. Survey responses
represented that 68.8% participants agreed [agree (50); strongly agree (34)], 13.9 %
participants responded negatively [disagree (10); strongly disagree (7)] and 17.2 %
respondents checked neutral to the question that high rate of customer data is stored in their
different company's systems.

System integration enhances usage and potential of data through meaningful and thorough
analysis. Therefore, systems containing customer data and their integration with analytical
tools and other internal information gathering sources could be a valuable metrics to forecast
viability of CRM initiative. Survey responses represented 64.7 % agreement [agree (51);
strongly agree (28)], 15.5 % respondents showed disagreement [disagree (14); strongly
disagree (5)] and 19.6 % respondents marked neutral to the question that high percentage of
systems that have information on customers are integrated in their company.

Table I (b): Descriptive Statistics of I.T Systems

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IT Systems Mean Standard Standard
Deviation Error
There is a high rate of customer data is stored in 2.2 1.1 0.1
our different company's systems.

In our company, high percentage of systems that 2.3 1.1 0.1


have information on customers are integrated.

4.3.3. Skillful, Motivated and Trained Employees

Each respondents were asked fours questions in order to evaluate the role of skilful, motivated
and trained employees as positively critical in implementation of CRM strategy.

Communication of organizational objectives at every level of the organization is a key idea to


be successful as entity. It is mandatory to direct or align the efforts and resources in a desirable
manner. Internal stakeholders with awareness of objective and benefits of CRM initiative could
foster objectivity and efficiency throughout the organization. Therefore, it is considered as a
fair measure of employee competence. Survey responses highlighted that 74.5% respondents
depicted agreement [agree (66); strongly agree (25)], 9.8 % participants showed disagreement
[disagree (9); strongly disagree (3)] and 15.5 % respondents marked neutral when asked that
significant percentage of staff in their company is aware of objectives and benefits of CRM.

Importance of training and development cannot be undermined in a rapidly changing


technological business environment. Learning and unlearning have become an integral part of
employee capabilities and motivation to perform well. Therefore, attending workshops and
seminars is one of the measures of employee attitude towards new initiatives. Survey
responses represented that 56.5 % participants showed agreement [agree (50); strongly agree
(19)], nearly 18% respondents depicted disagreement [disagree (14); strongly disagree (8)]
and 25.4 % participant marked neutral when asked that appropriate percentage of staff in
their company has attended seminars to learn significance of CRM.

Availability of human and capital resources is inevitable in successful implementation of


CRM project. Systems can collect, organize and analyse huge amount of data however,
translating such information into business strategies, policies and regulations is the
responsibility of employee. Therefore, qualification and strengths possess by the employees
are great measure of their competence. Survey responses highlighted that 77.8% respondents
showed agreement [agree (60); strongly agree (35)], almost 9 % participants depicted
disagreement [disagree (8); strongly disagree (3)] and 13.1 % participants checked neutral
when asked that their company has qualified employees and resources needed to succeed in
CRM.

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Every company has different size and type of business which influence their strategies and
practices to dealing with customers. Moreover, not every customer can be dealt in a same
manner. Organizations pursuing customer – orientation strategy segment customers on the
basis of offerings and nature of client. It demands trainings which need to be organized by
companies to attain particular objective. Therefore, employee development initiatives
undertaken by a company are a fine metrics of employee competence. Survey responses
highlighted that 71.3% respondents showed agreement [agree (49); strongly agree (38)], 16.3
% respondents depicted disagreement [disagree (16); strongly disagree (4)] and 12.2 %
participants checked neutral when asked that their company has existence of training
programs that designed to help employees to develop skills needed to manage customer
relationships effectively.

Table I (c): Descriptive Statistics of Skilful, Motivated and Trained Employees

Skilful, Motivated and Trained Employees Mean Standard Standard


Deviation Error
There is a significant percentage of staff in our 2.172 0.924 0.084
company that is aware of objectives and benefits of
CRM.
There is appropriate percentage of staff in our 2.525 1.093 0.099
company has attended seminars to learn significance
of CRM.

Our company has qualified employees and 2.049 0.952 0.086


resources needed to succeed in CRM.
Our company has existence of training programs 2.1721 1.1111 0.1006
that designed to help employees to develop skills
needed to manage customer relationships
effectively.

4.3.4. Organizational Culture

Each respondents were interrogated seven questions in order to evaluate the role of
organizational culture as positively critical in implementation of CRM strategy.

Businesses strive for customer satisfaction, high retention rate, greater loyalty and repeat
purchase. To attain such goals organizations are required to embed with strong cultural values
where all resources are consistent with the objective to serve customers in an improved
manner. Therefore, identifying alignment of organizational objectives with customer
satisfaction is the good metrics of cultural values. Survey responses highlighted that 81.9%
respondents showed agreement [agree (43); strongly agree (57)], 39.8 % respondents
depicted disagreement [disagree (9); strongly disagree (3)] and 8.1% participants marked

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neutral to the question that their company’s business objectives are oriented to customer
satisfaction.

Effective control systems can help organizations to develop desirable practices as part of
organizational culture. Control system can make or destroy the integrity of employees and
organizational image. Companies devise efficient controls to assess service level to
customers. Therefore, identifying company’s level of commitment in serving customers
better by control system is an indicator of organizational culture. Survey responses
highlighted that 79.5 % respondents showed agreement [agree (41); strongly agree (56)],
9.8% participants depicted disagreement [disagree (6); strongly disagree (6)] and 10.6%
participants marked neutral when asked that their company closely assesses its level of
commitment in serving customer needs.

CRM strategy is adopted with a rationale to connect with customers more frequently with
multiple communication points. Survey responses highlighted that 77.8% showed agreement
[agree (54); strongly agree (41)], 8.1% participant depicted disagreement [disagree (7);
strongly disagree (3)] and 13.9% respondents checked neutral when asked that their
company’s competitive advantage based on understanding customer needs.

CRM initiative fosters customer orientation throughout the organization. The strategy focuses
on retention and growth of existing customers. Therefore, organizations require to embed
culture of creating value for customers by incorporating it into objectives and business
strategies. Survey responses highlighted that 83.6% showed agreement [agree (53); strongly
agree (48)], 8.1% participant depicted disagreement [disagree (4); strongly disagree (6)] and
9.0% respondents checked neutral when asked that their company’s business strategies are
driven by objective of increasing value for customers.

Developing information systems ensure that a company fulfilled formalities of extracting


desirable outcomes. Hence, frequently evaluation of customer satisfaction from unique
initiatives is an indicator of organization culture where loyal customers prevail. Survey
responses highlighted that 76.2% showed agreement [agree (41); strongly agree (52)], 9.8%
participant depicted disagreement [disagree (8); strongly disagree (4)] and 13.9% respondents
checked neutral when asked that their company frequently measures customer satisfaction.

Companies organize resources to come up with competitive offerings. Moreover, by


experiencing convenience and greater accessibility customers start advocacy of service.
Therefore, providing after-sale-service is an indicator of customer driven culture by a
company. Survey responses highlighted that 71.3% showed agreement [agree (45); strongly
agree (42)], 7.3% participant depicted disagreement [disagree (6); strongly disagree (3)] and
21.3% respondents checked neutral when asked that their company pays great attention to
after-sales service.

Customer focused culture demand personalized offerings and customized solution to key
customers. Through segmentation companies attain insights and specialities to deal with

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different customers with compatible offerings. Specialized solutions to key customers is an
indicator that company is a follower of customer friendly culture. Survey responses
highlighted that 60.6% showed agreement [agree (44); strongly agree (30)], 22.9% participant
depicted disagreement [disagree (17); strongly disagree (11)] and 16.3% respondents checked
neutral when asked that their company offers personalized products and services for key
customers.

Table I (d): Descriptive Statistics of Organizational Culture

Organizational Culture Mean Standard Standard


Deviation Error
Our company’s business objectives are oriented to 1.8 1 0.1
customer satisfaction.

Our company closely assesses its level of 1.9 1.1 0.1


commitment in serving customer needs.

Our company’s competitive advantage based on 2 1 0.1


understanding customer needs.

Our company’s business strategies are driven by 1.9 1 0.1


objective of increasing value for customers.

Our company frequently measures customer 1.9 1 0.1


satisfaction.

Our company pays great attention to after-sales 2 1 0.1


service.

Our company offers personalized products and 2.5 1.3 0.1


services for key customers.

4.3.5. Customer Information System

Each respondents were probed six questions in order to evaluate the role of customer data
(quality/share) as positively critical in implementation of CRM strategy.

CRM initiatives is a mean of knowing customers to the best possible extent. Data collected
through integrated systems can take any form but parameters like estimating potential
demand and customer segmentation on the basis of information analysed can easily represent
the strength and effectiveness of CRM system. Survey responses highlighted that 64.7%
showed agreement [agree (49); strongly agree (30)], 14.7% participant depicted disagreement

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[disagree (14); strongly disagree (4)] and 20.4% respondents checked neutral when asked that
their company uses customer data in forecasting potential purchasing power and
segmentation of the company's customers become easy due to CRM implementation.

SMART rule of information emphasizes authenticity or accuracy of data gathered. Quality of


information need not be compromised as it ensures effective decision making, resource
allocation and setting out of objectives. Maintaining and controlling integrity of information
sources is a good indicator of reliable information system. Survey responses highlighted that
78.6% showed agreement [agree (55); strongly agree (41)], 9.8% participant depicted
disagreement [disagree (9); strongly disagree (3)] and 11.4% respondents checked neutral
when asked that integrity of customer information sources is high in their company.

CRM strategy works to ensure customer service, customer growth and satisfaction, and
identification of needs and repeat purchase etc. Survey responses highlighted that 68.8%
showed agreement [agree (51); strongly agree (33)], 9.8% participant depicted disagreement
[disagree (8); strongly disagree (4)] and 21.3% respondents checked neutral when asked that
their company maintains high rate of existence of a customer retention plan.

Customer satisfaction is a powerful idea in business management. Therefore, a CRM system


managing customer satisfaction effectively is a fair indicator that information system is
effective and critical to the overall success of the organization. Survey responses highlighted
that 69.6% showed agreement [agree (48); strongly agree (37)], 6.5% participant depicted
disagreement [disagree (6); strongly disagree (2)] and 23.7% respondents checked neutral
when asked that high ratio of customer satisfaction with the company is managed through
CRM.

CRM system is also used as a feedback mechanism. Therefore, complaints ratio is an


indicator of how much improvement company has brought to their offerings. As a rule of
thumb, low ratio indicates improved offerings and vice-versa. Survey responses highlighted
that 65.5% showed agreement [agree (55); strongly agree (25)], 13.1% participant depicted
disagreement [disagree (12); strongly disagree (4)] and 21.3% respondents checked neutral
when asked that their company has low ratio of complaints related to the products or services
sold.

Strength and effectiveness of information systems can be indicated from the percentage of
new acquisition by customers. It simply means that customers have acquired more products
and services of the company in relation to past years. If CRM system can interpret the
reasons behind such triggered behaviour and response of customer it is the ultimate success.
Survey responses highlighted that 62.29% showed agreement [agree (50); strongly agree
(26)], 12.2% participant depicted disagreement [disagree (8); strongly disagree (7)] and
25.2% respondents checked neutral when asked that their company maintain high percentage
of annual acquisition by customers.

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Table I (e): Descriptive Statistics of Customer Information System

Customer Information System Mean Standard Standard


Deviation Error
Our company uses customer data in forecasting 2.3 1.1 0.1
potential purchasing power and Segmentation of the
company's customers become easy due to CRM
implementation.

Integrity of customer information sources is high in 2 1 0.1


our company.

Our company maintains high rate of existence of a 2.2 1 0.1


customer retention plan.
High ratio of customer satisfaction with the company 2.1 0.9 0.1
is managed through CRM.
Our company has low ratio of complaints related to 2.3 1 0.1
the products or services sold.

Our company maintain high percentage of annual 2.3 1.1 0.1


acquisition by customers.

4.5. Structural Equation Modelling


To test the study hypothesis we have used the structural equation model (SEM) whereas the
testing has been gone through Smart PLS software. Moreover, to evaluate the indirect and
direct effects of all the constructs the testing was done. The use of (SEM) structural equation
model has been observed to be a foremost procedure that has been used below different
regression models and methods (Baron & Kenny, 1987). It used to evaluate the structural
relationship between exogenous and endogenous variables. It includes factor analysis and
multivariate analysis. Moreover, the equation of regression targets at explaining each construct
to assess the cause and effect relationship while all of the factors in the causal model could
demonstrate their cause and effect at exact time. Likewise, the idea of using this model ensures
to apply technique of bootstrapping which has been viewed as reasonable for both small and
large sample size and does not require any kind of indirect effect (Hayes, 2013). In order to
check the all direct and indirect effects, a technique has been implemented which is known as
bootstrapping (Shrout & Bolger, 2002)

4.5. Measurement of Outer Model

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The goal of measure of fit in the measurement model is to study about the reliability and
validity of the instrument and to check its reliability and validity we perform test of convergent
validity and discriminant validity in software naming Smart PLS.

4.5.1. Composite Reliability


Reliability implies stability of questionnaire outcomes. For the similar target population, at
whatever point the questioner reutilize the questionnaire it will give similar outcome. It
demonstrates inside consistency & repeatability of the survey is high. The primary measure for
unwavering quality is to maintain a strategic distance from unfairness in research. In this
manner, it tends to be improved by testing the pursuit procedure and investigation, as is done
utilizing diverse research and examination techniques or different researchers. This also
incorporates the dependability and legitimacy of the exploration.
In order to investigate stability or consistency of responses gathered we measure the quality
criteria of data by construct reliability and validity. In exploratory research composite
reliability measures from 0.60 to 0.70 are interpreted as acceptable whereas in more advance
phases of study measures between 0. 70 and 0.90 can be considered as good (Nunnally &
Bernstein, 1994).

So, composite reliability of each critical success factors of effective CRM including customer
information management 0.860, information technology 0.828, organizational culture 0.906,
skilful and trained staff 0.882 and top management support 0.920 plus CRM Success predicator
contains all matrices of CSFs and showing 0.954 composite reliability value are depicting good
reliability.

Table II: Composite Reliability

Variables Composite Reliability


CRM Success_ 0.954
Customer Information System 0.860
Information Technology 0.828
Organization Culture 0.906
Skilful and Trained Staff 0.882
Top Management Support 0.920

4.5.2. Factor loadings significant


Below is the mentioned table of (CFA) confirmatory factor analysis with the loadings.
Construct with the loading of 0.5 are consider as strong loading variables whereas the
constructs with the loading of below 0.5 are considered as less are better to be removed from
the table.

Table III: Confirmatory Factor Analysis (CFA)

Qs Constructs Item loadings T- Values P- Values


Section V- CIMA <- Customer Information System 0.561 5.008 0.000
Q1 CIMA <- CRM Success_ 0.524 5.360 0.000

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Section V- CIMB <- Customer Information System 0.800 10.735 0.000
Q2 CIMB <- CRM Success_ 0.702 10.920 0.000
Section V- CIMC <- Customer Information System 0.780 14.732 0.000
Q3 CIMC <- CRM Success_ 0.695 13.316 0.000
Section V- CIMD <- Customer Information System 0.785 11.383 0.000
Q4 CIMD <- CRM Success_ 0.692 10.017 0.000
Section V- CIME <- Customer Information System 0.477 4.362 0.000
Q5 CIME <- CRM Success_ 0.437 4.465 0.000
Section V- CIMF <- Customer Information System 0.824 14.469 0.000
Q6 CIMF <- CRM Success_ 0.712 14.022 0.000
Section II- ITA <- Information Technology 0.822 11.818 0.000
Q1 ITA <- CRM Success_ 0.547 6.694 0.000
Section II- ITB <- Information Technology 0.859 14.655 0.000
Q2 ITB <- CRM Success_ 0.576 6.532 0.000
Section OCA <- Organization Culture 0.806 16.199 0.000
IV- Q1 OCA <- CRM Success_ 0.763 15.295 0.000
Section OCB <- Organization Culture 0.810 20.289 0.000
IV- Q2 OCB <- CRM Success_ 0.759 17.878 0.000
Section OCC <- Organization Culture 0.738 12.251 0.000
IV- Q3 OCC <- CRM Success_ 0.704 12.020 0.000
Section OCD <- Organization Culture 0.763 11.511 0.000
IV- Q4 OCD <- CRM Success_ 0.724 11.613 0.000
Section OCE <- Organization Culture 0.821 16.152 0.000
IV- Q5 OCE <- CRM Success_ 0.760 15.747 0.000
Section OCF <- Organization Culture 0.701 10.888 0.000
IV- Q6 OCF <- CRM Success_ 0.656 10.460 0.000
Section OCG <- Organization Culture 0.678 11.762 0.000
IV- Q7 OCG <- CRM Success_ 0.621 10.615 0.000
Section STSA <- Skilful and Trained Staff 0.838 15.495 0.000
III- Q1 STSA <- CRM Success_ 0.715 12.032 0.000
Section STSB <- Skilful and Trained Staff 0.697 9.766 0.000
III- Q2 STSB <- CRM Success_ 0.613 8.872 0.000
Section STSC <- Skilful and Trained Staff 0.887 17.107 0.000
III- Q3 STSC <- CRM Success_ 0.741 15.524 0.000
Section STSD <- Skilful and Trained Staff 0.800 12.837 0.000
III- Q4 STSD <- CRM Success_ 0.675 10.413 0.000
Section I- TMSA <- Top Management Support 0.804 14.810 0.000
Q1 TMSA <- CRM Success_ 0.694 11.227 0.000
Section I- TMSB <- Top Management Support 0.847 15.676 0.000
Q2 TMSB <- CRM Success_ 0.726 12.231 0.000
Section I- TMSC <- Top Management Support 0.833 19.218 0.000
Q3 TMSC <- CRM Success_ 0.712 15.112 0.000

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Section I- TMSD <- Top Management Support 0.894 22.219 0.000
Q4 TMSD <- CRM Success_ 0.767 18.303 0.000
Section I- TMSE <- Top Management Support 0.786 16.710 0.000
Q5 TMSE <- CRM Success_ 0.687 14.481 0.000
Section I- TMSF <- Top Management Support 0.695 9.362 0.000
Q6 TMSF <- CRM Success_ 0.603 8.469 0.000

4.5.3. Convergent Validity


Convergent validity is the level of agreement in at least two measures of a similar construct
(Carmines & Zeller, 1979). Convergent validity was assessed by inspection of variance mined
for each factor (Fornell & Larcker, 1981) Conferring to (Fornell & Larcker, 1981), if the,
variance extracted value is greater than 0.5 then convergent validity is established and the result
is drawn that the loadings are good but less than 0.5 are termed as less effective for the study.

Table IV: Convergent Validity

Cronbach's rho_ Average Variance Extracted


Alpha A (AVE)
CRM Success_ 0.953 0.957 0.458
Customer Information
0.862 0.879 0.514
System
Information Technology 0.828 0.829 0.707
Organization Culture 0.904 0.908 0.580
Skilful and Trained Staff 0.884 0.889 0.654
Top Management Support 0.920 0.924 0.660

CRM Success Cronbach’s Alpha with 0.953, organizational culture 0.904 and top management
support 0.920 are reflecting best internal consistency. Cronbach’s Alpha of customer
information management with 0.862 and skilful and trained staff 0.884 and information
technology 0.828 are demonstrating better internal consistency.
Hence, data gathered on CSFs of effective CRM implementation is reliable and consistent.

4.5.4. Discriminant validity


Discriminate validity can be defined as any single construct when differs from other
constructs in the model (Carmines & Zeller, 1979). Discriminate validity results are
satisfactory when the constructs are having an AVE loading more than 0.5 which means that
minimum 50% of variance was took by the construct (Chin & Marcoulides, 1998).
Discriminate validity is established if the elements which are in diagonal are significantly
higher than those values in off-diagonal in the parallel rows and columns. Discriminant
Validity tests are being conducted in order to see whether non-related ideas or measurements
are in fact unrelated or not. An effective assessment of discriminant legitimacy demonstrates

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that a trial of an idea isn't exceptionally associated with different tests intended to quantify
hypothetically various ideas.

Table V: Discriminant Validity

Informatio Skilful
Customer Top
CRM n Organizati and
Informatio Managemen
Success_ Technolog on Culture Traine
n System t Support
y d Staff
CRM
0.677
Success_
Customer
Information 0.932 0.717
System
Information
0.642 0.409 0.841
Technology
Organizatio
0.994 0.883 0.532 0.761
n Culture
Skilful and
Trained 0.877 0.732 0.381 0.773 0.809
Staff
Top
Managemen 0.906 0.641 0.653 0.750 0.658 0.812
t Support

5.6. Hetrotrait – Monotrait Ratio (HTMT)

Skilful
Customer Top
CRM Information Organization and
Information Management
Success_ Technology Culture Trained
System Support
Staff
CRM
Success_
Customer
Information 0.935
System
Information
0.651 0.387
Technology
Organization
0.993 0.881 0.530
Culture
Skilful and
Trained 0.875 0.724 0.373 0.772
Staff

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Top
Management 0.903 0.624 0.658 0.745 0.654
Support

Assessment of discriminant variability is essential for research papers as it mitigates the risk
that the latent variables are testing the same matrices under every construct. In order to ensure
that every construct is investing different and independent measures discriminant variability
test is run under quality criteria. Fornell and Larcker criterion is the most typically accepted
method in order to investigate the independence of latent variable in previous studies. However,
(Hamid, Sami, & Sidek, 2017) has identified issues in previous method of calculating
discriminant variability and suggested that for model with more than six latent variables need
to be verified by new means of estimating discriminant variability as it will better verify the
independence of latent variables construct.

The values in the HTMT table are mostly favorable and indicated with green color and showing
independence. However, customer information system, organizational culture and top
management support is indicating unfavorable values with red color and reflecting inter-
dependability. This interrelation is justified between the above factors as each factor is
classified in more than one category. Customer information system is classified as
organizational, technological and process factor responsible for CRM success. Further,
organizational culture is classified as organizational and process factor. Top management
support is classified as organizational as well as project factors. Therefore, these are
interdependent and interrelated variables and collectively contribute in CRM success.

4.7. Model Fit Measures


The fitness of the model in SEM-PLS is defined by various measures such as standardised
root-mean-square residual (SRMR), and the exact model fits like d_ULS and d_G, Normed
Fit Index (NFI), and χ2 (Chi-square). The model fit measures consisting the measured value
of both saturated model as well as the estimated model is reported in above Table. The
saturated model assesses the correlation between all constructs. The estimated model, on the
other hand, takes model structure into account and is based on total effect scheme.
Table VII:
Saturated Model Estimated Model
SRMR 0.122 0.122
d_ULS 18.975 18.975
d_G n/a n/a
Chi-Square n/a n/a
NFI n/a n/a

4.8. Coefficient of Determinant


Table VIII:

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R Square R Square Adjusted
CRM Success_ 1.0 1.0

It is an important criteria of assessing the structural model PLS-SEM in the R squared values
which is also known as coefficient of determination. It reflects the proportion of variation in
the CSFs (dependent variables) that can be explained by the CRM success (endogenous
variable) in a regression model. (Chin & Marcoulides, 1998) Recommended interpretation
criteria for R square value 0.67 and above, 0.33 and above and 0.19 above are read as
substantial, moderate and weak respectively. An R-squared of 1.0 means that all matrices of a
CSF construct are completely structured by the CRM success. Hence, CSFs are absolutely fit
in relation to CRM success regression model.

4.9. Hypothesis Testing


In PLS-SEM, bootstrapping is one of the key stride, which gives the data of constancy of
factor guesstimate. Sub-tests are drawn everywhere from the first example including
substitution, in this process (Hair, Matthews, Matthews, & Sarstedt, 2017). Bootstrapping
provides the information of stability of coefficient estimate. In this process, a large number of
sub-samples are drawn from the original sample with replacement (Hair, Matthews,
Matthews, & Sarstedt, 2017). After running the bootstrap routine, SmartPLS shows the t-
values for structural model estimates derived from the bootstrapping procedure. The results
of path coefficients for all the hypothesis are shown in the following table. The t-value
greater than 1.96 (p < .005) shows that the relationship is significant at 95% confidence level
(α = 0.05). Paths showing whether the relationship between measured and latent variables are
significant or not.

Figure IV: Path Diagram

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Above is the table which displays the results of hypothesis, the variables having relationship
is positive as the p values of all variables are less than 0.05 which confirms that the variables
taken for the study will have a positive impact on the supply chain performance in food
industry. The T value shows there is a significant difference among the variables and the P
values depicts the decision no relation has been rejected and the alternative hypothesis have
been supported on the basis of p values.
Below readings are generated when the structural model is run two-tailed test with significance
level (alpha) 0.05 while check Bias Corrected and Accelerated (BCa) Bootstrap under
Confidence interval method.

Table IX: P-Value analysis

Original Sample Standard T Statistics P


Sample Mean Deviation (|O/STDEV Value
(O) (M) (STDEV) |) s
Customer Information
-0.176 -0.155 0.066 2.681 0.008
System -> CRM Success_
Information Technology
-0.046 -0.042 0.013 3.564 0.000
-> CRM Success_
Organization Culture ->
-0.232 -0.218 0.077 3.024 0.003
CRM Success_

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Skilful and Trained Staff
-0.164 -0.147 0.029 5.607 0.000
-> CRM Success_
Top Management
Support -> CRM -0.370 -0.329 0.106 3.487 0.001
Success_

Level of significance or alpha is the probability of rejecting null hypothesis when it is true or
making type I error. In this study alpha is equal to 0.05. So p-value less than or equal to 0.05
indicates strong evidence against null hypothesis (McNeese, 2017).

When we compare p-value of Customer Information System in relation CRM success (0.008)
with significance level (alpha 0.05) we observe it is much lesser than 0.05. It is analyzed that
the results are highly significant so the study rejects null hypothesis and accepts alternative
hypothesis which indicates that customer information system is critical for effective CRM
implementation.

When we compare p-value of information technology in relation CRM success (0.000) with
significance level (alpha 0.05) we observe it is much lesser than 0.05. It is analyzed that the
results are highly significant so the study rejects null hypothesis and accepts alternative
hypothesis which indicates that information technology is critical for effective CRM
implementation.

When we compare p-value of organizational culture in relation CRM success (0.003) with
significance level (alpha 0.05) we observe it is much lesser than 0.05. It is analyzed that the
results are highly significant so the study rejects null hypothesis and accepts alternative
hypothesis which indicates that organizational culture is critical for effective CRM
implementation.

When we compare p-value of skillful and trained staff in relation CRM success (0.000) with
significance level (alpha 0.05) we observe it is much lesser than 0.05. It is analyzed that the
results are highly significant so the study rejects null hypothesis and accepts alternative
hypothesis which indicates that skillful and trained staff is critical for effective CRM
implementation.

When we compare p-value of top management support in relation CRM success (0.001) with
significance level (alpha 0.05) we observe it is much lesser than 0.05. It is analyzed that the
results are highly significant so the study rejects null hypothesis and accepts alternative
hypothesis which indicates that top management support is critical for effective CRM
implementation.

Chapter V: Discussion & Conclusion


5.1. Discussions
Critical Success Factors (CSFs) of effective CRM implementation are classified into four
categories including organizational, technological, process and project (Farhan, Abed, &
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Ellatif, 2018). Each CSF appeared in more than one category and interdependent and
interrelated. Empirical testing of top management support, information technology, skillful and
trained staff, organization culture and customer information management verified that all
factors are critical to the effective implementation of CRM and each factor possesses highly
significant impact on CRM success.

Results of past researches pointed out significantly high failure rate of CRM projects. Failure
of CRM project is interpreted as not meeting expectations in relation to cost efficiency,
objectives and benefits which have been anticipated before the investment on CRM initiatives.
Studies in the field of CRM mainly revolve around two basic approaches identifying success
and failure factors. Failure factors highlighted causes, elements and indicators that have
contributed to the ineffectiveness of CRM initiative. It is an approach of an organization which
divert resources on activities that need not to be done in order to get desired outcomes. It could
be an indirect approach but significant because high magnitude of failure factors can mitigate
the relevance of success factors.

Therefore, it is equally important to look into factors that may cause failure to CRM initiatives.
Organizational change, company policy/inertia, little CRM knowledge, and incompetent CRM
skills are identified as causes of failure by a study on data collected from 700 companies
(Krigsman, 2009). Moreover, low commitment and support by senior executives, lack of vision
articulation, weak change management strategies, inadequate training programs, inability to
adopt customer – centric approach and incompetent personnel are critical to the failure of CRM
technology.

From such factors it could be inferred that top management support and organizational culture
have power to develop or destroy the business. Emphasizing on building up and concentrating
on success factors which include greater top management support, skillful and motivated
workforce, customer – focused culture, system integration and high customer information
management effectiveness of CRM can be elevated. As it is a direct and positive approach of
capitalizing organizational resources to attain benefits including customer satisfaction,
customer loyalty, low complaint rates, greater retention and usage, repeat purchase and
advocacy by the customer.

This research is empirically validating the findings of previous researches because factors
statistically tested by the study are being identified by a systematic literature review of studies
discussed success and failure factors of CRM. However, scope, sample size, industry,
methodology, approach and objectives of this study could be contradicted from past researches.
And such contradictions are acceptable because it fulfils the criteria of unique contribution in
research. The results of this study are mainly focusing on what factors are positively critical in
implementing CRM project effectively within Pakistan and how they are measured. It is
significant for every business venture planning to implement CRM as business strategy.

5.2. Conclusion
Growth of organizations is dependent upon their flexibility in relation to rapidly transforming
business environment and ability to make appropriate decisions in order to achieve
competitiveness in dynamic business situations. Researches support practitioners in achieving
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desired objectives through unique and insightful findings. This research supports technology-
driven business strategy in the form of CRM solution in order to attain optimal benefits from
loyal and sustainable customer base.

Data collected from 61 CRM implementing companies in Pakistan through structured online
survey. Purposive sampling techniques is utilized to attain the objective empirically verifying
previously identified factors that can be positively critical to the effectiveness of CRM
implementations. This quantitative research is analysed through confirmatory factor analysis
(CFA) and structural equation model (SEM) of smart PLS.

Past researches in CRM field identified gaps like need of empirical testing of identified
factors so companies can anticipate the influence of each factor concretely. Moreover, gap of
limited participation from different functions of CRM implementing companies is also
highlighted. CRM strategy has implication in different functional areas like Sales and
Marketing, Customer Complaints and Service, IT and Supply chain hence it is essential that
workforce associated with such functions must become participants of CRM related research.
It facilitates comprehending 360 degree view of CRM technology for an organization and
other relevant stakeholder. This study however, addressed the gap to a greater extent because
Sales, Marketing and IT personnel have participated in the survey.

The research reveals that when an organization is planning to invest into CRM solution must
look the factors critical in successful implementation of such project. If an organization already
possesses support from top management, sufficient information technology, skillful, motivated
and trained employees, customer-oriented organization cultural and efficiency to manage
customer data then it’s a go ahead. Under this situation, the investment in CRM project will be
proved as highly suitable and feasible. It will be probable for organizations to extract desired
results from CRM implementation.

On the other hand, if an organization does not possess the mentioned factors then first work on
attaining characteristics which will help in effectiveness of CRM and once all indicators are
appeared do invest in CRM and enjoy innumerable benefits of CRM solution. Success factors
are interrelated and interdependent so it is recommended to verify all the indicators that show
presence of all factors simultaneously. Consequently, failure rate of CRM project is also
highlighted in this research cited by previous studies.

The study also suggests orientation for future research. There are twenty-five other critical
success factors for CRM which require empirical testing for further researches. This study can
be replicated to other geographical regions of the world by future academia. Furthermore, these
factors can also be verified by future researchers through other research instruments like
company visits, interviews or manual surveys.

5.3. Limitations

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Economics has made us understood enough about the limited available resources by defining
the concept of scarcity so it is inevitable not to experience any limitation. Following are the
noticeable limitations experienced in relation to this particular study:

 The context of this study is geographically restricted (Pakistan) so unable to


comprehend the results for the companies located at different regions of the globe.
 The study verified only top five critical success factors identified by the review. Rest
of the twenty-five other factors are still required to be statistically tested.
 The study is conducted by utilizing online platforms which may influence the reliability
of the findings.
 The study has become gender centric unintentionally as majority respondents are male.
There is a probability of group-think approach in responses.
 Limitation of time and monetary resources that restricted to gather more responses
through personal visits, one-to-one interviews. It may help to gather meaningful
insights on the topic.

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Appendices

Questionnaire

If your organization is implementing any type of Customer Relationship Management (CRM)


based systems/software, the survey is for you.
This academic research is to be conducted by an MBA- Marketing student at the University of
Karachi.
The purpose of this research is to empirically test such factors that may successfully contribute
to the effective implementation of CRM systems.
This data collection is limited to academic purposes and information gathered will be kept
confidential. First five sections are Critical Success Factors (CSFs) of implementing CRM
effective and the last section belongs to respondents' profile ensuring valid responses.

Note: Please indicate your level of agreement or disagreement with each of the following
statements.

What type of CRM your company is implementing: -----------------------------------

Main Questions: Part A

Section I: Top management support.

1. There is an absolute presence of the CRM project in the company's strategic plan.
2. Significant percentage of our top-level management is actively participating in CRM
projects.
3. Our company allocates high percentage of budget in technology and communication
area.
4. Our company assigns high percentage of budget to system integration.
5. In our company, significant percentage of board members objectives connected with
fulfilment of CRM.
6. Top management of our company removes high percentage of organizational
constraints in effective implementation of CRM.

Section II: IT systems (integration/management)


1. There is a high rate of customer data is stored in our different company's systems.
2. In our company, high percentage of systems that have information on customers are
integrated.
3. What is the average time taken to update information among different information
systems that share customer information in your company?

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 Less than 12 hours
 12 hours
 24 hours
 36 hours
 More than 36 hours

4. What is the average number of information systems that have to consult someone in the
company for customer queries?

 1
 2
 3
 4
 More than 4

Section III: Skilful, motivated, and trained staff Customer service

1. There is a significant percentage of staff in our company that is aware of objectives and
benefits of CRM.
2. There is appropriate percentage of staff in our company has attended seminars to learn
significance of CRM.
3. Our company has qualified employees and resources needed to succeed in CRM.
4. Our company has existence of training programs that designed to help employees to
develop skills needed to manage customer relationships effectively.

Section IV: Organizational culture

1. Our company’s business objectives are oriented to customer satisfaction.


2. Our company closely assesses its level of commitment in serving customer needs.
3. Our company’s competitive advantage based on understanding customer needs.
4. Our company’s business strategies are driven by objective of increasing value for
customers.
5. Our company frequently measures customer satisfaction.
6. Our company pays great attention to after-sales service.
7. Our company offers personalized products and services for key customers.

Section V: Customer data (quality/share)

1. Our company uses customer data in forecasting potential purchasing power.


Segmentation of the company's customers become easy due to CRM implementation.
2. Integrity of customer information sources is high in our company
3. Our company maintains high rate of existence of a customer retention plan.
4. High ratio of customer satisfaction with the company is managed through CRM

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5. Our company has low ratio of complaints related to the products or services sold.
6. Our company maintain high percentage of annual acquisition by customers.
Part B: Respondent’s Profile

Respondent’s Name:
Gender:
Age:
Education:
Company Name:
Department:
Designation:
Company provided e-mail:

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Electronic copy available at: https://ssrn.com/abstract=3510622

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