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JTB_Journal of Technology and Business.

October 2007

The Improvement of Customer Satisfaction by Adopting CRM


Technology

Yann-Haur Huang
Faculty, Northwest Polytechnic University, Fremont, CA

Chien-Ting Chen
Faculty, Fortune Institute of Technology College, Kaohsiung, Taiwan, R.O.C.

ABSTRACT

Companies suffer as high as 60-70% failure rates in implementing CRM


systems because of the integration problems. The present study suggests several
factors to guide companies toward a successful CRM implementation. These
factors include the establishment of a CRM committee, end-user involvement,
end-user education, the establishment of a proper reward system, the adoption of
module-by-module installations, maintaining in-house CRM engineers, utilizing
web-based infrastructure, detailed system specification, and less CRM
customizations.
If the major goal of implementing a CRM system is to "improve customer
satisfaction," the management of a business should emphasize three factors: the
establishing a CRM committee, obtaining end user-involvement and adopting
web-based infrastructure. Thus, companies should first clarify what their goals of
CRM implementation are in order to ensure a successful adoption of a CRM and
enterprise system.

Keywords: Customer Relationship Management, Customer Satisfaction,


E-commerce Technology, CRM Implementation

INTRODUCTION

The term “e-commerce (electronic commerce)” is regarded as the exchange of


“real products for real money through online channels” (Rayport, 1999). Before the
emergence of the Internet, the most prevalent kind of e-commerce technology was
electronic data interchange (EDI). Since EDI relied and was implemented on
private data networks, it made integrations among companies’ IT architectures
difficult. With the advances of Internet in the 1990s, information exchange among
companies had migrated to the Internet (Kalakota, Robinson, and Tapscott, 1999).
Further, more and more companies are planning to migrate their business processes
to the “e-corporation” and adopt e-commerce technologies such as CRM (Customer
Relationship Management), ERP (Enterprise Resource Planning), and other
enterprise systems to improve services to their customers and suppliers while

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reducing their operational costs (Parker 2002).


However, executives who plan to adopt such e-commerce technologies as ERP,
CRM, or SCM (Supply Chain Management) to smooth their business operations
often face two questions: (1) what are the major e-commerce technologies? and (2)
how do these technologies help their companies?
For instance, Cliffe (1999) suggests that approximately 65% of executives
believe that having an enterprise system (i.e., ERP or CRM) would probably hurt
their businesses because of the implementation problems. Gitomer (2001) points
out that the most important factor affecting the success of CRM implementations is
top management’s participation. Further, Fitzgerald and Brown (2001) suggest that
the implementation of CRM needs to be managed by “executive committees” rather
than a single executive. Although researchers have proposed that CEO involvement
is critical to CRM implementation, they haven’t provided a recommended way for
management to help the CRM implementation. Thus, the purpose of this article is
to identify some success factors contributing to CRM implementation. The results
from the present study could provide some recommended ways for executives to
participate and support their CRM implementation projects.
Also, a number of papers suggest that the integration between CRM and other
enterprise systems, such as ERP, is not an easy task. Fitzgerald and Brown (2001)
suggest that the major challenge of CRM implementation is the integration between
legacy systems and varieties of platforms such as ERP. Rasmussen (1999) and
Rivers and Dart (1999) indicate that companies suffer as high as 60-70% failure
rates in implementing CRM systems because of the integration problems.
Furthermore, Petrissans (1999) points out that “only 7% of the companies [that had
implemented CRM systems] had integrated their CRM application with an ERP
application” (p. 14).
The specific objectives of the present study are to (1) examine what factors
affect the success in CRM implementation and (2) understand the collaboration
issues of CRM, ERP, and other back-office applications. This leads to the main
research question of the present study:

What factors explain the degree of success in the implementation of CRM


systems and the degree of success in their integration with other enterprise
systems?

LITERATURE REVIEW

The Emergence of E-commerce Technologies

With the emergence of the Internet, companies have changed their ways of
conducting business. They adopt new technologies to compete with rivals,
strengthen their existing competitive advantage, reduce operating costs, and
increase value-added activities. Teece (1986) suggests that there are two ways to
determine whether a firm can profit from adopting innovation technologies:
imitable and complementary assets. Complementary assets are the assets that
companies could utilize to gain competitive advantage over their competitors. Thus,

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companies need to adopt innovative technologies to complement their traditional


business operations in order to survive in the new information and Internet era.
Rayport (1995) argues that business is operated in both the physical and the
virtual world. Traditional businesses that solely operate in the physical world
cannot survive in today’s competitive business environment. Executives must lead
their companies toward conducting business in both marketplace (i.e., the physical
world) and marketspace (i.e., the virtual world) (Rayport, 1995). Poirier and Bauer
(2002) predicted that by 2005, customer expenditures on marketplace and
marketspace would reach 67/33 equilibrium. These authors predicted that
approximately 67% of companies’ revenue would be generated from customers’
spending in the physical world, while 33% of this revenue would come from
customers’ spending in the virtual world. Thus, it appears that in order to operate
business over the marketspace, companies will need to embrace e-commerce
technologies as their “complementary asset” to gain competitive advantages.
To adopt E-commerce technologies and software packages, companies first
need to have a well-established I.T. infrastructure (i.e., computers and
telecommunication). Before the emergence of the Internet, the most prevalent kind
of e-commerce was electronic data interchange (EDI). EDI allows manufactures,
suppliers, and customers to exchange orders and inventory information along the
supply-chain stream. Since EDI relied and was implemented on private data
networks which made the integrations among companies’ IT architectures difficult,
with the advent of the Internet in the 1990s, information exchanges among
companies had migrated to the adoption of Internet technology (Kalakota,
Robinson, and Tapscott, 1999).

Overview of the Enterprise System

The term “enterprise system” is regarded as the “commercial software


packages that enable the integration of transactions-oriented data and business
processes throughout an organization and the entire inter-organizational supply
chain” (Markus and Tanis, 2002, p. 177). Therefore, in the present study an
enterprise system is defined as follows:

“An enterprise system is a large scale software package that provides the
functions of planning and operational scheduling, finance and accounting
controlling, sales force automation, customer relationship management,
manufacturing and production management, logistic handling, and other business
operations, to cover and support overall activities, processes, and strategies for an
organization.”

There are three areas involved in the e-commerce enterprise systems which is
also named enterprise computing technologies (ETC): (1) Enterprise Resource
Planning (ERP), (2) Customer Relationship Management (CRM), and (3) Supply
Chain Management (SCM) (see Figure 1 and Appendix).
In Figure 1, an ERP system basically covers a company’s overall business
activities and operations. It involves several functional departments such as the

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Accounting/Finance department, the Human Resources department, Marketing


department, Manufacturing department, Logistics department and other entities
such as customers, international divisions, and suppliers. Internally, an ERP system
controls and streamlines a company’s operations. Externally, an ERP system serves
as the interface between a company and its customers and suppliers. Therefore,
when dealing with complicated and changing environments (i.e., customers and
suppliers), companies need to adopt a well-designed system, which is extremely
important to the interface between the external environments (i.e., customer and
suppliers) and the internal business operations. It is critical for companies to gain a
competitive advantage by using e-commerce technologies. Therefore, companies
need to adopt CRM to improve their customers’ satisfaction and at the same time
utilize other enterprise systems such as ERP or SCM to smooth their logistic
processes and operations and to fulfill the tasks from CRM system. Fitzgerald and
Brown (2001) distinguish the difference between ERP and CRM in the following:

ERP is primarily about processes, systems and efficiency in squeezing costs out of
every stage of the business process whether it occurs inside or outside the
organization. CRM, on the other hand, is ultimately about the effectiveness, quality,
profitability, persistence and longevity of the relationship with the customer” (p. 3).

To sum up, an enterprise system basically contains the following


sub-components or modules: accounting and finance module (which also includes
HR functions), customer- relationship management module,
manufacturing-resource-planning module, and supply- chain-management module.
Many enterprise system vendors, such as Oracle, SAP, and PeopleSoft, regard the
Enterprise Computing Technologies (ECT, see p. 8) as the ERP system while other
vendors concentrate on a more specific area such as Siebel on the CRM system.

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Figure 1. Three areas involved in the e-commerce enterprise systems

The Adoption of Technological Innovations

Companies adopt innovative technologies in order to gain ‘competitive


advantages’. Thong (1999) explains that adopting computer-based innovative
technologies could “provide an opportunity for business to improve their efficiency
and effectiveness, and even to gain competitive advantage” (p. 188). Siruivasan,
Lilien and Rangaswamy (2002) state that e-business technologies such as CRM or
ERP could be regarded as “radical technologies that have been transforming
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business models and processes, resulting in the disruption of old industries and the
creation of new ones” (p. 47). Therefore, the adoption of radical technology such as
CRM or ERP helps companies gain competitive advantages. In the highly
competitive business environment, firms often did not adopt a radical technology to
strengthen their competitive advantages, thereby eventually failing to survive in the
marketplace. On the other hand, companies tend to be more successful if they adopt
a radical technology and align their business processes on the basis of such
innovation (Utterback, 1994; Sirnivasan, Lilien & Rangaswamy, 2002).
However, the adoption of an innovative technology is not an easy task.
Without thorough planning and concentration at all levels of the company, “a rapid
pace of technological change creates uncertainty that can be competency
destroying” (Weiss and Heide, 1993, p. 221). Thus, the adoption of e-business
technologies, CRM for example, requires many changes and resources, such as the
change of companies’ business model, the alignment of business process in all parts,
a decentralized leadership style, a sound initial planning and analysis, the design of
encouraging compensation for employees, and participations from all levels within
the organization to adopt an innovative technology. These required resources,
allocated to the changes, may all be regarded as the complementary assets.
Complementary assets, either visible or invisible, may mean human resources or
available budgets that help companies to gain competitive advantages via adopting
e-business technologies. Both Rogers (1995) and Tripsas (1998) suggest that
complementary assets have positive effects on the success in adopting innovative
technologies.
Srinivasan, Lilien and Rangaswamy (2002) suggest that firms can adopt
e-business innovative technologies such as CRM by “taking specific actions such as
focusing on the future, by having top management advocate new technologies, and
by becoming more of an adhocracy culture and less hierarchy culture” (p. 47).
Pierce and Delbecq (1977) propose that the adoption of innovative technology
could be explained with a three-stage process: initiation, adoption, and
implementation. First, the initiation stage deals with information collection, system
analysis, and system planning regarding the adoption of the innovative technology.
Second, the adoption stage is concerned with the degree of acceptance (e.g.,
employees as well as company) in adopting the technology. Firms need to develop
a reward system to encourage employees’ participation in adopting the new
technology. Also, firms need to align their business processes, models, and
strategies with the innovative technology. Third, the implementation stage involves
the process of implementing the innovative technology in the organization. It not
only requires not only changes and resources to support the adoption of innovative
technologies, but also top management support and a change of leadership style.
Kimberly and Evanisko (1981) identified three characteristics for adopting an
innovative technology: characteristics of organizational leaders, characteristics of
organizations, and characteristics of environmental context. Tornatzky and
Fleischer (1990) also proposed a similar model for firms to adopt innovative
technologies. These authors indicate that three factors would affect the adoption of
innovative technology: organizational context such as leadership style and culture,
technological context such as the integration and complexity of the technology, and

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environmental context such as external support and resource (e.g. vendor support).

In order to make the change (i.e., the adoption of an innovative technology)


program effective, firms must involve the entire organization from top to bottom.
Organizations that plan to adopt the CRM technology will need to establish CRM
committees (or teams) to handle, monitor and support the change processes. Day
(1999) argues that “the management team candidly assesses the company’s
progress in creating the culture, capabilities, structure, and strategy of an
organization” (p. 16). The CRM committee should involve top executives and key
participants (e.g., IT and marketing staffs) in the decision-making process. Ribbers
and Schoo (2002) indicate that the establishment of a CRM committee/team should
“cover all of the following roles: program manager, steering committee, program
sponsor, user representative, coordinator across projects, coordinator with external
suppliers, coordinator for an efficient implementation process and independent
quality assurance” (p. 48).
However, as Day (1999) explains “their [top executives’] roles are supportive,
not dominant” (p. 13). Day suggests that in order to show executives’ support on
the change program (e.g., the adoption of the innovative technology), they (i.e., the
top executives) need to “demonstrate leadership commitment,” and this effort
should “not be left to a part-time task force.” The establishment of a CRM
committee helps the realization of “localness and decentralization” (Galbreath and
Rogers, 1999). The term “localness and decentralization” means that executives
move the decision-making processes down to the local, end-user and customer
levels. Localness enables managers and end users to focus on problem
identification. Thus, it is critical to involve executives in the CRM committee (or
the project team) to deliver their support on the adoption of the CRM technology
because “top management created a sense of urgency to energize the [change]
program” (Day, 1999. p. 13).

Regarding the reward system, a well-designed incentive and reward package is


able to encourage employees to fully participate in the adoption and
implementation of the CRM technology. Day (1999) argues that “the best intentions
of a market-driven change program will be thwarted if the compensation plan
comes from another era” (p. 20). As for initial planning, since CRM coordinates
every level of integration between CRM and other back-office applications such as
SCM or ERP, it is important that firms acquire the necessary technological
resources, conduct a solid analysis, and ensure that the organization is ready for the
implementation of the CRM system. Without a thorough plan before the adoption
of the new technology, an incomplete system specification could lead to failures
in implementing enterprise systems such as CRM or ERP (Bowersox, Daugherty,
Droge, Germain, & Rogers, 1992).
Furthermore, the company culture plays a significant role in affecting the
success in adopting CRM technology. A company’s culture is the set of shared
values and beliefs that guides employees to realize how an organization functions
and provides norms for actions in the organization (Farley and Webster, 1993;
Moorman 1995). Corporate culture plays a significant role. Moorman (1995)

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suggests that firms could develop a “clan culture” to help the adoption of
innovative technologies. A clan culture emphasizes employees’ participations and
teamwork. A clan culture could improve the mutual understanding among
employees through participative processes. Thus, firms need to advocate that
employees participate in the decision-making process in order to ensure why and
how to adopt innovative technologies such as CRM. By establishing a CRM
committee, an organization could encourage employees to participate in the change
process. Eduard (2001) emphasizes the importance of “building an e-business team
[committee]” and argues that “the number-one rule for preparing the
implementation plan is ‘involve the involved,’ that is, involving key staff from
impacted departments” (p. 15). Day (1999) indicates the importance of involving
employees in the change process and further emphasizes that “the real challenge
was to turn a short-term survival program into a long-term transformation that fully
engaged employees” (p. 12).
Now, in terms of the success of a system implementation, it could be divided
into two parts: the implementation process (project success), and the results
(product success) (Miles and Snow, 1992; Sage, 1995). Levitt (1960) suggests that
customer satisfaction is the ultimate goal for every business. Therefore, the
adoption of e-business technology such as CRM could optimize the information
flow while streamlining business operations. This value-added business process
results in better customer satisfaction. Ribbers and Schoo (1992) measured the
success of implementing an enterprise system such as CRM or ERP by using two
indicators: level of use of the new system and procedures, and level of contribution
of the program deliverable to the company. The level of use of the new system and
procedure was defined by whether customers and end users were satisfied with the
new system (e.g., customer satisfaction). The level of contribution of the program
deliverable to the company was defined by two items: whether the new system
increases “efficiency” in handling the firms’ routine business activities (i.e.,
variability), and whether the new system helps integrate different systems and
platforms (i.e., integration).
System efficiency is regarded as one of the indirect operational perceived
benefits and is also considered the measurement of successful technology adoption
(Iacovou, Benbasat, and Dexter, 1995). In addition to the measurement of CRM
success using system efficiency, Jutla and Bodorik (2001) suggest that three
customer metrics-- customer retention rate, customer satisfaction, and customer
profitability-- could be used to measure CRM performance.

Enterprise Resource Planning (ERP): a realization of the enterprise system

Companies conducting businesses in this new century face the challenge of


globalization. Intense global competitions have become the norm rather than the
exception. The increase of consumer requirements, such as more customized
manufacturing, product varieties, shorter product development, and quicker and
more reliable logistic systems, has pushed companies to find a new way of doing
business. In order to meet these challenges, companies around the world must adopt
e-commerce technologies to support their business activities in both domestic and

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global environments.
In the 1990s, many firms implemented the so-called “integrated systems,”
namely Enterprise Resource Planning (ERP) systems or enterprise systems. An
enterprise system such as ERP is designed to integrate a variety of business
activities and processes among different functional departments within the same
entity and to collaborate or communicate with companies’ vendors and customers.
A well-designed enterprise system is able to provide a seamless integration of the
information flowing through a company’s functional departments, such as financial
and accounting information, market and customer relationship information,
human-resources information, manufacturing process information, and supply chain
information

Mabert, Soni, and Venkataramanan (2001) point out that “ERP systems are
complex, and implementing one can be a difficult, time-consuming, and expensive
project for a company. The Implementation can take many years to complete and
may cost tens of millions of dollars for a medium-size company and $300 to $500
million for large international corporations” (p. 69). They point out that the cost of
implementing an ERP system would range between 1.5 percent and 6 percent of a
company’s annual revenues, depending on the nature and the size of the company.
Thus, although an ERP system may help the company reduce its operating costs
and increase customers’ satisfaction, it may also be a burden if the system is not
properly implemented or not well integrated with other systems, or if it doesn’t
support the company’s business strategies. It is generally estimated that
approximately 65% of executives believe ERP systems would probably hurt their
business because of implementation problems. Therefore, in order to ensure the
success of the ERP implementation project, the management needs to (1) evaluate
how the ERP system may support its business operations and future strategies and
(2) fully participate and support the implementation project.

Step-by-step implementations of ERP systems have been proposed. For example,


Laughlin (1999) suggests ten strategies for companies to implement an ERP system
successfully. These include: clearly defined vision, changed management effort,
aggressive schedule and timelines, strong sponsorship, target communications,
focused issue resolution, limited scope, early success, appropriate project staffing,
and solid project management. Also, much literature suggests that when evaluating
and implementing an ERP project, executives need to plan small, with step-by-step
methods first, before going to a full scale of ERP implementation. For example,
Piturro (1999) argues that for companies purchasing the ERP systems, they need to
start with a small scale and implement the most common or critical components of
the ERP systems.
Since the costs of purchasing and implementing a full scale ERP system are
extremely high, executives face the dilemma of deciding which ERP
components/modules are the best or at least necessary to realize their first step of
embracing e-commerce technologies. In early 90s, the most popular components
companies adopted in their first step of enterprise systems implementations were
often the accounts payable, accounts receivable, or human resources. But now,

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CRM has become one of the most popular software packages companies are
planning to purchase. The difference between ERP and CRM is that ERP covers
most of the CRM functions and can be implemented without a distinct CRM. On
the other hand, for a company to more effectively streamline its business, it is
recommended that CRM should integrate with existing back-office applications
which ERP could help integrate between these two systems.

The Introduction of Customer Relationship Management (CRM)

CRM is not only an e-business technology; it is also a marketing philosophy.


Wells, Fuerst, and Choobineh (1999) state that “a one-to-one marketing paradigm
has emerged that suggests organizations will be more successful if they concentrate
on obtaining and maintaining a share of each customer rather than a share of the
entire market, with IT [CRM] being the enabling factor” (p54). The concept of
Customer Relationship Management (CRM) arose in the early 90’s. It is considered
a module or a sub-system of the enterprise system (or ERP) and is mainly focused
on the improvement of marketing channel efficiency and the integration with
suppliers and customers to increase customer satisfaction and retention, product
sales, and revenue. Research by International Data Corporation (IDC,1999)
indicates that “over 65% of the companies surveyed were aware of CRM
technology and methods and 28% have CRM projects under study. The average
investment in a CRM project is US$3.1 million and the financial returns are an
immediate increase of 8% in turnover, with a mid-term objective of 16% within two
years. The average payback period is 28 months” (p. 5). Fitzgerald and Brown
(2001) indicate that approximately 40% of companies’ executives considered CRM
a high priority in planning their business strategies. However, the literature also
demonstrates that many people don’t really understand the concept of CRM. “We
believe that many organizations who say they have a CRM strategy have merely
renamed call centers, helpdesks, sales force automation systems with a more
fashionable handle” (Fitzgerald and Brown, 2001). Thus, executives should treat
CRM not only as a technology but also as a business reengineering process.
With the advances in technological innovations and the emergence of Internet,
CRM today provides the capabilities of predicting customer behaviors, building
value-added activities, strengthening brand images and improving customer support
activities. Sue and Morin (2001) define CRM as “a technology-enabled business
strategy whereby companies leverage increased customer knowledge to build
profitable relationships, based on optimizing value delivered to and realized from
their customers” (p. 2). There are several advantages of implementing CRM. For
example CRM could help companies to reduce costs, improve customer services
and productivity, explore new markets, analyze competitors, and provide
twenty-four-hours sales support, to compete in new business environments. It is
believed that the rule of thumb of a marketing strategy is that “20 percent of the
customers generate 80 percent of the profits”. Thus, companies deploying CRM
systems could provide customized products or services to their valued and
profit-generating customers.

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. The choice of a CRM system is also critical. Vendors’ capabilities and supports
such as availability, technical support, and staff-training program, are the most
crucial factors when selecting a CRM system. Bose (2002) suggests firms should
work with vendors to supply additional external technical support. They further
state that “selecting experienced vendors to assist in the project will help to ensure
project success by reducing common problems and prioritizing tasks” (p. 92).
Selecting right vendors and partners could not only ensure the quality of CRM
service but also extend CRM scalability and flexibility (Eduard, 2001). There are
two alternatives for companies who consider implementing a CRM system:
installing CRM and hosting CRM. The installed CRM is a traditional manner of
software implementation wherein companies purchase the software package from a
CRM vendor and implement the CRM software on the company site. The hosted
CRM is provided by an application service provider (ASP). The term
“pay-as-you-go ASP mode” is that companies “subscribe” to the CRM services
from the ASP, where the cost is determined by the number of CRM users who login
into the system hosted by the ASPs. The contract for subscribing to a CRM system
is usually defined by the number of hours consumed by the users and is normally
signed with a term of three to four years. Gitomer (2001) points out “the
pay-as-you-go ASP model [i.e. the hosted CRM] makes financial sense for
companies with limited resources but rapid-growth models because it allows them
to use advanced applications for a predictable fixed cost” (p. 5). The authors
suggest that companies which need to integrate their legacy systems and have large
IT departments would be better off choosing the installed CRM over the hosted
CRM.
Olson (2001) argues that when making the decision to purchase a CRM
package, companies need to evaluate not only the issue of the “installed CRM
versus hosted CRM” but also the issue of “best of breed CRM package”-- Siebel,
for example-- versus the CRM package from the integrated software vendors” such
as SAP, PeopleSoft, or Oracle. Even though most ERP and CRM vendors provide
the integrations and linkages among multiple applications, companies with limited
budgets and resources may not be able to justify purchasing such a high-cost
integrated suite/software.
Thus, executives often face the dilemma of making a decision on choosing the
CRM packages between “the installed CRM vs. the hosted CRM from ASP” and
“the best of breed CRM packages vs. the integrated packaged software suites.”
Sundra (2000) argues “the Internet only ASP model is fraught with
troublesome issues from all perspectives. Many concerns about data availability or
data loss, data security, and the longevity and stability of ASP vendors have been a
major inhibitor to customer acceptance” (p. 1). Sundra proposed a “hybrid
Client/Server plus ASP (CLASP)” model to solve the ASP problems. In the CLASP
model, companies subscribe CRM from ASP vendors for customer interface
applications, and other sensitive/confidential data with extreme security issues and
operational applications (i.e., ERP and SCM) are implemented under the intranet
and client/server environments.
Krause (2002) provides several guidelines for making the CRM purchase

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decision. The authors of the present study suggest: (1) if companies’ top priority is
to unify a large ordering system, they should consider the major ERP vendors. If
companies have specialized needs, they should go with a best-of-breed software
vendor. (2) Executives should evaluate the right implementation scale to realize a
return on investment (ROI). (3) Companies need to search for the best possible
integration solutions so that the newly purchased applications could collaborate
with companies’ existing systems. (4) When evaluating a CRM package, executives
should attend conferences, collect CRM customers’ feedbacks, and know the pros
and cons on different vendors.

Even though a CRM system provides many advantages to firms, implementing


a CRM system is not an easy task. When implementing a CRM system, executives
also face the challenge of identifying the factors for a successful CRM
implementation. Both Rasmusson (1999) and Rivers and Dart (1999) argue that
companies suffer as high as 60-70% failure rate in implementing CRM systems.
Fitzgerald and Brown (2001) suggest that the implementation of CRM needs to be
managed by committee of executives rather than a single executive. Gitomer (2001)
points out three factors that affect the success in implementing a CRM system:
obtaining the commitment of top management to participate and fully support,
establishing cross-functional communications and cooperation from all levels of the
organization, and analyzing customer data thoroughly to understand what
customers’ needs and to satisfy them. Eberhardt (2000) also delineates six steps to
the CRM implementations: (1) assessing companies’ CRM needs, (2) treating CRM
as more than just a technology initiative, (3) satisfying customer needs, (4)
analyzing the return from CRM, (5) integrating all distribution channels, and (6)
establishing the right CRM infrastructure. Therefore, before companies jump into
the decision of purchasing and implementing CRM technology, they should first
evaluate the characteristics of their own corporate cultures, organizational changes,
and organizational structures before adopting proper CRM strategies.
There are other factors that might affect the success of CRM implementation.
During the CRM implementation stage, the management needs to ensure its
employees that users of the new system are not able to change the old system once
the new system is up and running. Ribbers and Schoo (2002) emphasize that
“enterprise wide implementation of integrated software [e.g., CRM or ERP]
requires strict adherence to a no-change policy in the rollout phase” (p. 51). Also,
customers and end users should participate and design how CRM should function.
By participating in the design of CRM functions, customers and users have a better
idea of how CRM could support them. Bose (2002) points out that “a key concept
in this phase of development is that the customer [e.g. end users] chooses the type
of interaction; firms do not demand that the customer fit into their IT framework”
(p. 92).
During the CRM implementing process, the company needs to work with
vendors to come out with a well-planned training program. The CRM training
program is designed not only for customers and end users but also for the IT
engineers. “A solid training program will go a long way in helping employees to
understand not only the goal of CRM, but also to understand how the system will

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help to better serve the customer [and end users]” (Bose, 2002. p. 94).

Conclusion from the Literature

Petrissans (1999) identified ”four main factors as obstacles or inhibitors in


deploying a CRM project: changes in business processes, the overall budget size,
the integration between different operational divisions, and the integration of
historical data [i.e., legacy system] into the new system” (p. 12). Although major
ERP vendors such as SAP, PeopleSoft, and Oracle provide CRM modules and
components coupled with their enterprise systems, the CRM functions from the
major ERP vendors are still in the early stage of development and still need
improvement when compared with other best-of-breed CRM products (Siebel CRM
systems, for example). However, this raises another issue: if a firm doesn’t
purchase CRM and other enterprise systems from the same vendor, will it face the
difficulty of integrating its enterprise systems to support its business processes?
Therefore, in the next five years or so, enterprise system vendors and the
companies that plan to implement CRM technologies need to find out the success
factors that would affect the CRM implementation and its integration and
collaboration with ERP systems.
To sum up, research from the literature suggests nine factors: (1) ‘the
establishment of a CRM committee, (2) system analysis and planning, (3) vendor
services, (4) user involvements, (5) reward systems, (6) CRM functionality, (7)
training programs, (8) step-by-step implementation, and (9) web-based
infrastructure, all of which might affect the success of CRM implementation to the
improvement of customer satisfaction. Beside the measurement on the overall CRM
success, customer satisfaction could be used as a gauge of CRM success.

RESEARCH DESIGN

An Overview

Since CRM and enterprise systems are relatively new topics and not much
research and have covered these areas, especially on the field of the integration of
CRM and other enterprise systems, the present study proposes a two-step research
methodology in order to answer the following research question:

What are the factors that explain the degree of success in the implementation of
CRM systems and the degree of success in their integration with other enterprise
systems?

Based on the findings of related studies, the present study employed a


quantitative analysis using survey and statistical methods to identify possible
cause-and-effect relationships and to provide some answers to the research question.
A survey questionnaire was created based on the findings from the literature review
and in-depth CRM interviews. Sample and population, and statistical methods were
also defined.

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A web-based survey for data collection was used, taking six months (to
complete the data collection for the quantitative analysis. Data was entered into the
SPSS statistical software for analysis.

Quantitative Analysis

A perusal of the literature provided important insights into CRM. While most
empirical results from the present study correspond to the findings of previous
studies, a few of them contradict findings in the literature.

The Survey Design

The survey design is based on two considerations: the literature review and
specific needs of the present study.
The survey was cross-sectional, that is, the information was collected from
November 2003 to December 2003. Since the population of this the present study
consists of the companies nationwide which had undertaken a CRM
implementation project, the costs and time for data collection could be significant.
Therefore, to facilitate the process, the authors of the present study adopted a
web-based questionnaire for data collection. Cooper and Schindler (2001) suggest
that “the ease of use [the web-based questionnaire] is not the only influence
pushing the popularity of web-based instruments [the survey questionnaire]. Cost is
a major factor to adopt a web-based questionnaire” (p. 318).
The survey questionnaire was uploaded to the web site. Roughly ten people
were asked to fill out the questionnaire for the pilot test through the web.
Modification of the questionnaire was made according to the results from pilot
study. After the revision of the questionnaire, an invitation letter as well as the
hyper link to the web site of the final version questionnaire were e-mailed to the
sample respondents, asking for their participation in filling out the questionnaire
through the web.

Population and Sample

The population of this research survey is defined as “companies which are


located in the US and have undertaken a CRM implementation project.”
First, a sample list was randomly drawn from several CRM related web sites.
These CRM related web sites include: CRM Forum, CRM Today, America CRM
Directory, Capterra, CRM Community and any other major CRM vendor’s web
sites such as SAP, People Soft, or Oracle which provide their CRM customers’ lists.
The listed CRM-related web sites listed above include the member lists on CRM
vendors, CRM consultants, and companies which have undertaken CRM projects in
the US. The above listed web sites provide approximately 400 to 500 companies
which had completed the CRM implementation project and were expected to
provide approximately 700 to 800 participants to fill out the survey question.
Second, after obtaining the sample list mentioned above, the authors contacted
each company to determine the appropriate person to whom to send the email

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survey. By examining companies’ organization structures and information through


their web sites, the authors had been able to decide to whom it would be
appropriate to send the survey to. In the demographic information of the survey
instrument, the authors asked the participants for their experience on CRM and
other back-office applications. Those who worked for companies which had
completed a CRM project were on managerial level and had been involved in the
CRM project and thus were qualified to fill out the survey. The authors believe that
this randomly selected sample is satisfactory for the purpose of this study and
represents the true characteristics of the population.
After the sample had been assembled as identified above, the survey was
e-mailed to the director or supervisor of the IT department and other CRM
impacted functional departments of the selected companies.
Third, in order to increase the response rate, the authors conducted a follow-up
procedure one week after the initial email survey to encourage the participations to
fill out the survey. The follow-up procedure included sending faxes, making phone
calls, and/or visiting companies’ offices in the Bay Area.

Instrumentation for Data Collection

The authors adopted a web-based survey to collect questionnaire data from the
sample participants. Zoomerang web site (http://www.zoomerang.com) provided
and hosted a web-based and online questionnaire to collect research data for its
members. King, Speas, and Canter (2000) from PC Magazine rank the Zoomerang
as one of the most reliable web sites to provide a user-friendly online questionnaire
for collecting survey information.
The authors divided this section into three phases. In the first phase, the
authors uploaded the survey questionnaire to the Zoomerang web site and e-mailed
out a brief introductory message along with the Zoomerang web site address to
approximately ten people from the sample participants to fill out the survey
questionnaire online. The first phase was regarded as the pilot study in which the
authors tried to discover the problems or flaws in the questionnaire design and the
web-based data collection tools. The authors made some modifications of the
questionnaire and then uploaded the modified questionnaire to the Zoomerang for
the next phase. In the second phase, the authors emailed 500 email messages to the
sample participants.
While the conventional methods (e.g., postal mail) usually take two to three
weeks to get responses from the questionnaire participants, the online survey
method takes less than a week (Ilieva, Baron, and Healey, 2002). Therefore, in the
third phase, the authors proceeded with a follow-up e-mail, one week after the
initial survey was emailed out, to increase the response rate.
The data collection, as such, took six months to complete.

Hypotheses and Variables in the Study


(1) Hypothesis 1a
The 9 predictor variables (i.e., CRM committee, end-user involvement, end-user
education, reward system, module-by-module installations, in-house CRM

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engineers, web-based infrastructure, provide system specification, and less CRM


customizations) are most influential factors contributing to the success of CRM
implementation (i.e., as measured by the improvement of customer satisfaction).

Dependent Variable: Improved customer satisfaction


Independent Variables: Established CRM committee,
End user involvement
Providing training programs
Established reward system,
Module-by-module implementation
Maintaining in-house CRM engineers
Adopting web-based designs
Fewer CRM customizations
Providing system specifications
Statistical Method: Multiple regression analysis.

RESEARCH RESULTS AND DISCUSSION

(1) Return and Response for the survey


a. The Initial Phase of Data Collections

The authors began collecting data by sending out emails to the 300 respondents
identified on the “Population and Sample” section of this paper on January 22,
2004. In the following week, the authors had collected 27 responses and decided to
send out the follow-up and thank-you emails to the 300 respondents. With this
strategy, the s were able to collect an additional set of 11 responses. There were a
total of 38 responses out of the 300 respondents in the initial data collections phase.
The response rate of the initial data collection phase is 13%.
After examining the dataset from the initial data collection phase, the authors
believed that some modifications of the questionnaire design would reduce the
responding time for the respondents and therefore increase the response rate. The
modification of the questionnaire design, however, did not change how the
questions were asked. Instead, by asking the respondents to answer, “How many
employees are there in your company?” the authors obtained categorical answers to
the question (i.e., 0-100, 101~300, 301~500, etc.).

In the second phase of data collection, after the modifications of the survey
design, the authors sent emails to the 350 respondents on March 31, 2004. These
350 respondents were also identified in the “Population and Sample” section of this
article and were a different set of sample from “The Initial Phase of Data
Collection.” A week after the emails were sent out, the authors dispatched
follow-up and thank-you emails to increase the response rate. There were a total 51
responses out of the 350 respondents in the second phase of data collection. The
response rate for this phase is 15%.

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In the third phase of data collection, in addition to the 650 identified


respondents to fill out the questionnaire through the Zoomerang.com browser-based
survey, the authors utilized personal connections to collect data. Being involved
with ERP and CRM consulting business, the authors asked the assistants from the
CRM/ERP software vendors to send out questionnaires using emails with the
attached questionnaire survey (i.e. Microsoft Word document format) to their CRM
customers, and asked them to fill out the questionnaires. A total of 7 software
vendors (e.g., IBM, Siebel, SAP, and 21 E Corp.) agreed to send the questionnaires
to their customers and persuaded them to participate in the survey. In the end, the
authors were able to collect 39 responses via e-mail, with the help of CRM/ERP
vendors.
To sum up, the authors completed data collection with a total of 128
responses/cases (i.e., 38 responses from the first phase of data collection, 51
responses from the second phase, and 39 responses from the third phase) on June
2004. In order to ensure that there existed no differences in the datasets between the
first, second, and third phases of data collection, the authors conducted a
descriptive statistical analysis and compared the values of means and standard
deviations for the datasets respectively. The authors concluded that the mean and
standard deviation values from the datasets of the three phases are close and similar
and therefore could be consolidated for further analysis.

(2) Pre-Analysis Data Screening

The evaluation of missing data and outliers (i.e., extreme values) of the
collected datasets led to the elimination of 34 cases. There were a total of 94 valid
cases/responses for statistical analyses. The test of data normality, linearity, and
homoscedasticity were also conducted in order to satisfy the general assumptions
involved in multivariate statistical testing. Mertler and Vannatta (2001) suggest that
“if variables are normally distributed and linearly related, the shape of the
scatterplot will be elliptical” (p. 32) and “when the assumptions of linearity,
normality, and homoscedasticity are met, residuals will create an approximate
rectangular distribution with a concentration of scores along the center” (p. 55). By
examining the scatterplots (see Appendix B, Figure 1 and Figure 2), the result from
the collected dataset displays elliptical shapes, and the residual plot creates a
rectangle shape with scores concentrated in the center. Thus, the authors believe
that the collected dataset of the survey satisfied the general assumptions of
normality, linearity, and homoscedasticity in multivariate statistical testing.

(3) Statistical Summary

Table 1 summarizes the perspectives from the questionnaire participants as


measured by means and percentages.

Table 1. Summary of responses the questionnaire

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Agree
Mean satisfaction
(score
score
Factors (DVs and IVs) of 5,
Overall (1 to 7
6, 7)
scale)
%
The CRM system is generally regarded as a
4.6 51%
success in my organization
The CRM system improve our customers’
5.0 55%
satisfaction
The CRM system improves integration
4.3 40%
among our company’s different systems.
The CRM system improves the efficiency of
4.6 52%
business operations.
Our company established CRM committee
5.1 56%
to monitor CRM implementation process.
End users are involved in the CRM
5.2 62%
committee and the implementation process.
End users and engineers training programs
are clearly spell out in the contract with the 4.8 45%
vendor.
The reward system was established to
encourage the participation of CRM 3.3 10%
implementation.
The CRM system adopted
module-by-module implementation 5.1 56%
methods.
The company maintained in-house CRM
4.8 52%
engineers.
The company tried to minimize the
4.2 37%
customization of CRM system.
The CRM system adopted web-based
4.7 52%
infrastructure.
Detailed system specifications are analyzed
4.6 45%
and provided in the documentation.

(4) Hypotheses Testing, Statistical Findings, and Discussion


The Hypothesis below tries to identify the influential factors contributing to the
improvement of customer satisfaction after implementing the CRM system.

The nine predictor variables (i.e., CRM committee, end-user involvement, end-user
education, reward system, module-by-module installations, in-house CRM
engineers, web-based infrastructure, provide system specification, and less CRM
customizations) are the influential factors contributing to the success of CRM
implementation (i.e., as measured by the improvement of customer satisfaction).

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The statistical results:


 Table 2, 3, 4 represent the three primary parts of regression output:
(1) H8 General Model: Model Summary, (2) H8 General Model: ANOVA table,
and (3) H8 General Model: Coefficients table. Review of the tolerance statistics
presented in the coefficients table indicates that all IVs were tolerated in the model
(with tolerance statistics exceed .1). Thus, collinearity is not a serious problem with
these data.
 The model summary (see Table 2) and the ANOVA summary (see
Table 3) indicate that the overall model of the nine IVs predicts the success of
CRM implementation, Adjusted R2= .756, F(9, 84)=33.049, p<.005. Therefore, the
authors reject the null hypothesis and accepts alternative, Hypothesis 8.
 While using the standard regression approach, three factors (i.e.,
the establishment of CRM committee, end user involvement, and adopted web
based design) are significant in predicting the success of CRM implementation as
measured by the improvement of customer satisfaction.
 Based on the statistical results, the authors developed a multiple
regression function using the beta weights. The multiple regression function
suggests that the nine IVs are positively related to the success of CRM
implementation.

Table 2. H1 General Model: Model Summary


St
d.
Er
ro
r
R of
th
S e
M q Adj Es
o u uste ti
d a dR m
e r Squ at
l R e are e Change Statistics
R

S
q
u
a
r F
e
C C
h h
a a Sig.
n n d d F
g g f f Cha
e e 1 2 nge
1 . . .5 . 3
.75 8 .00
8 7 9 7 3 9
6 4 0
8 8 6 8 .
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JTB_Journal of Technology and Business. October 2007

3 0 0 0
( 4
a 9
)
a Predictors: (Constant), provide system specification, less customization, define training program
in contract, establish reward system, end user involvement, maintain in-house engineer, adopt web
based design, establish CRM committee, module by module implementation.

Table 3. H1 General Model: ANOVA


Sum of Mean
Model Squares df Square F
1 Regression 105.661 9 11.740 33.049 .000(a)
Residual 8
29.839 .355
4
Total 9
135.500
3
a Predictors: (Constant), provide system specification, less customization, define training program in
contract, establish reward system, end user involvement, maintain in-house engineer, adopt web based
design, establish CRM committee, module by module implementation
b Dependent Variable: improve customer satisfaction

The Compact Model for Hypothesis 1

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JTB_Journal of Technology and Business. October 2007

Based on the statistical results above, the author further conducted a step-wise
regression analysis using SPSS statistical software to develop a “compact model”
for Hypothesis 8. The compact model for Hypothesis 8 helps (1) to
reduce/eliminate the collinearity among variables, and (2) to determine “the most
important factor” among the statistical significant variables for Hypothesis 8. Three
models (please see table 5) involved when conducting the step-wise regression
analysis for Hypothesis 8 in which all three models showed statistical significant
(please see table 6). Based on the H1 Compact Model: Model Summary on table 5,
Model 3 (i.e. dependent variable: improve customer satisfaction and the predicted
variables: adopt web based design, establish CRM committee, and end user

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involvement) serves as the compact model for Hypothesis 1.


The statistical results show consistency between the standard multiple
regression approach and the step-wise multiple regression approach when testing
Hypothesis 1. A step-wise multiple regression function is developed in the
following to represent the compact model for Hypothesis 1.

The Compact Model for H1:


Y (customer satisfaction) = 0.472X (adopt web based design) + 0.275X (establish CRM committee) +
0.222X (end user involvement)

Thus, if the goal of implementing a CRM system is to improve customer


satisfaction, organizations need to consider three factors: adopt web-based design,
establish CRM committee, and end user involvement, as the most important factors
when implementing a CRM project.

Table 5. H1 Compact Model: Model Summary


Std.
Adjusted Error of
R R the
Model R Square Square Estimate
1 .821(a) .673 .670 .693
2 .864(b) .747 .741 .614
3 .876(c) .768 .760 .591
a Predictors: (Constant), adopt web based design
b Predictors: (Constant), adopt web based design, establish CRM committee
c Predictors: (Constant), adopt web based design, establish CRM committee, end user involvement
d Dependent Variable: improve customer satisfaction

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Table 6. H1 Compact Model: ANOVA


Sum of Mean
Model Squares df Square F Sig.
1 Regression 91.257 1 91.257 189.761 .000(a)
Residual 44.243 92 .481
Total 135.500 93
2 Regression 101.205 2 50.603 134.272 .000(b)
Residual 34.295 91 .377
Total 135.500 93
3 Regression 104.055 3 34.685 99.275 .000(c)
Residual 31.445 90 .349
Total 135.500 93
a Predictors: (Constant), adopt web based design
b Predictors: (Constant), adopt web based design, establish CRM committee
c Predictors: (Constant), adopt web based design, establish CRM committee, end user involvement
d Dependent Variable: improve customer satisfaction

Table 7. H1 Compact Model: Coefficients


Unstandardized Standardized
Model Coefficients Coefficients t Sig.
Std.
B Error Beta
1 (Constant) 2.023 .194 10.452 .000
adopt web
.572 .042 .821 13.775 .000
based design
2 (Constant) 1.271 .225 5.643 .000
adopt web
.361 .055 .518 6.557 .000
based design
establish
CRM .357 .070 .406 5.138 .000
committee
3 (Constant) .867 .259 3.348 .001
adopt web
based .329 .054 .472 6.071 .000
design
establish
CRM .242 .078 .275 3.102 .003
committee
end user
.228 .080 .222 2.856 .005
involvement
a Dependent Variable: improve customer satisfaction

Discussion for Hypothesis 1


Three factors-- adopt web-based design, establish CRM committee, and end
user involvements-- were the most important factors when implementing a CRM
system. Thus, if the goal of implementing a CRM system is to “improve customer
satisfaction”, the management should (1) adopt a “web-based infrastructure” of a
CRM system, (2) establish CRM committee, and (3) involve end users to
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participate the implementation process.

Web-based Infrastructure:
The statistical findings suggest that beside the establishment of CRM
committee and end users’ involvement, if the goal of implementing CRM is to
improve customer satisfaction, the management should adopt a web-based
infrastructure for the CRM system. The adoption of a web-based infrastructure
accounts for the highest weight (0.362) in the regression model when the measured
variable is “the improvement of customer satisfaction.”
However, there is a difference between traditional CRM and web-based CRM
(also named E-CRM). A web-based CRM system adopts the TCP/IP Internet
protocol throughout the organization’s IT infrastructure. System applications are
also developed using web-based programming languages such as XML or Java.
Nadarajah (2004) suggests that organizations will gain benefits if the CRM
application exposes its functionalities by adopting web-based infrastructure and
will gain more benefits if everyone else (i.e., customers, vendors, suppliers, etc.)
exposes their systems via web-based infrastructure. King and Tang (2002) explain
that “the difference [between CRM and E-CRM/web-based CRM] lies in the nature
of e-CRM; it is real time, often via electronic touch points where CRM can occur
online or offline across any or all customer touch points…the new twist in e- CRM
is that the point of customer data capture is likely a web site rather than a store,
ordering system or call center.”
Traditionally, most CRM applications rely on the in-store and call centers
contacts to collect customer information and provide CRM services. However, the
ease of use and low costs of web-based CRM will dominate the CRM applications
(Feinberg, Kadam, Hokama, and Kim, 2002). Sterne (1996) revealed that, instead
of using traditional CRM, Sun Microsystems had saved the cost of $1.3 million
annually after adopting web-based CRM. Feinberg and Kadam (2002) point to “…
a positive relationship between the amount of e-CRM on a web site and customer
satisfaction with the web site…It is generally accepted that e-CRM is related to
customer satisfaction, profit and sales” (p. 432).
The adoption of a web-based IT infrastructure would allow companies to
better collaborate their front office and back office applications and, therefore, be
able to provide real time services to customers. The statistical findings in the
present study demonstrate that when the purpose of implementing CRM is to
improve customer satisfaction, the adoption of a web-based infrastructure account
for the highest weight in the regression model. Parvatiyar and Sheth (2000)
conclude that “[e-CRM is] the ongoing process of engaging in cooperative and
collaborative activities and programs with immediate end-user customers to create
or enhance mutual economic value at a reduced cost” (p. 9). Taylor and Hunter
(2002) explain that “the mechanism for the [CRM] transition to digital forms of
e-service is e-CRM software that directly links an end user with a marketer’s
human support resources and/or knowledge base…e-CRM suites provide the
mechanism by which companies hope to begin to more efficiently and efficaciously
provide such e-service at lower cost” (p. 453). Reichfeld and Schefter (2000) also
encourage organizations to adopt web-based CRM (i.e., E-CRM) strategies and

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explain that “most of today's on-line consumers exhibit a clear proclivity toward
loyalty, and web technologies reinforce that inherent loyalty…This loyalty [and
customer satisfaction] effect enables them to compensate their employees more
generously, provide investors with superior cash flows, and reinvest more
aggressively to further enhance the value delivered to customers” (p. 110). Thus,
web-based CRM could shift some of the task of after-sale service to customers
through Internet and therefore would reduce the company’s costs as well as
improve customer satisfaction.

More Discussions
Three suggestions have come out of the present study’s statistical analyses.
It would beneficial for a company to follow these suggestions when planning to
implement a CRM system.

Suggestion 1: Establish the goal of company’s CRM strategy.

The findings of the present study provide valuable and detailed


information on the CRM implementation process. Managements could take the nine
independent variables into consideration and concentrate more on five factors(the
establishment of CRM committee, end-user involvements, the establishment of
reward system, maintaining in-house engineers, and less CRM customizations to
ensure “overall success of CRM implementation). Studies suggest that companies
would gain more benefits if they could identify their goals of CRM implementation.
For example, instead of spending resources to satisfy those nine factors identified in
the literature review, companies should concentrate on and allocate more of its
resources to the three factors (i.e., CRM committee, end-user involvement,
web-based infrastructure) identified in the present study if the goal of implementing
a CRM system is to improve customer satisfactions. Therefore, by identifying the
goal of the CRM system (i.e., the improvement of customer satisfactions),
companies would be better off being able to save resources.

Suggestions 2: Understand the e-commerce technologies adopted in the industry.

Different industries adopt different e-commerce technologies. A


service-based company where customer satisfaction is critical might consider
adopting e-CRM (i.e., web-based CRM) to satisfy its customers’ needs. Therefore,
in order to provide best services using up-to-date technologies to customers, most
service-based companies are required to routinely upgrade their CRM systems. If
companies customized most of their CRM functions to fit their existing business
operations, they will face the difficulties when it comes to the needs to upgrade
their existing CRM system. On the contrary, a manufacturing-based company might
consider the integration of different operational platforms as its primary goal when
evaluating a CRM system. It is obvious that module-by-module CRM installations
and detailed system specifications help to improve the integration between various
systems within the organization. However, a web-based CRM system would also
help a company to collaborate and integrate different operation platforms with its

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customers, business partners, vendors and suppliers by adopting a common IT


infrastructure, the TCP/IP protocol. In this case, the adoption of a web-based CRM
is deemed necessary to integrate different enterprise systems outside the company’s
business boundary.

Suggestion 3: Understand the culture of the organization before implementing a


CRM system.

The issue of human relations plays an important role in successful CRM


implementation. The statistical results on the present hypotheses indicate that
human factors affect six out of the identified nine factors when implementing a
CRM system. These six factors include the establishment of CRM committee,
end-user involvement, end-user education, the establishment of reward system,
module-by-module installation, and less CRM customizations. When a company
tries to avoid customizing its CRM system, adopting the module-by-module
implementations could help to minimize the impact from the changes of business
practices and to reduce users’ resistance to those changes. Thus, the key to a
successful CRM implementation lies not only in technologies issues but, perhaps
more importantly, in the human factors.

SCHOLARLY CONTRIBUTION OF THE PRESENT STUDY

Many companies have suffered from the process of CRM implementation.


Even though a few companies are able to implement their CRM system, they often
find difficulties of integrating/collaborating data between the CRM systems and
other enterprise systems, such as ERP or SCM.
This study suggests and identifies several factors which contribute to the
success of CRM implementation. When managers plan to purchase and prepare to
implement a CRM system, they need to first look at the factors identified in the
present study to ensure a smooth installation and to enjoy the benefits of a CRM
system. Data integration/collaboration between different enterprise systems affects
the productivity and effectiveness of business operations. The present study
suggests several factors to guide companies for a successful CRM implementation
and for the integration of this CRM with their existing enterprise system. These
factors include the establishment of CRM committee, end-user involvement, sound
end-user education, the establishment of proper reward system, the adoption of
module-by-module installations, maintaining in-house CRM engineers, the
utilization of web-based infrastructure, detailed system specification, and less CRM
customizations. These factors are all contributors to the success of CRM
implementation and system integration.
Companies adopt CRM technology to satisfy their different needs and
strategies. For some companies, the goal is to improve customer satisfaction and
provide better customer service. For other companies, their goals might be to
increase operational efficiency or to realize vertical integrations both internally and
externally. Based on different goals and strategies, management is encouraged to

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JTB_Journal of Technology and Business. October 2007

emphasize different factors of CRM implementation to achieve different goals.


Thus, if the major goal of implementing a CRM system is to “improve
customer satisfaction,” the management should emphasize three factors: the
establishment of CRM committee, end user involvement, and the adoption of
web-based infrastructure.

LIMITATIONS

The present study is characterized by a number of certain limitations. First, CRM


implementation strategies may differ depending on what industry in which the
organization is conducting its business. Service type companies, such as financial
institutions, do not require too much effort to integrate its system with vendors or
suppliers. However, a vertical integration of the CRM system with vendors,
suppliers, or customers may be necessary or critical for a manufacturing company’s
long-term strategy.
Second, CRM implementation strategies may also be different depending on
where and what country an organization is located in. It is believed that US
companies tend to accept the concept of avoiding customizing the CRM system and
trying to aligning their business operations with the system. However, companies in
Asia tend to maximize the customization of CRM package to fit their operations.
Third, CRM implementation strategies may differ depending on the size of a
business. Smaller companies often are bound by limited resources when planning to
adopt the CRM technology. Also, human factors in small companies may not be as
severe as those in larger companies when adopting a new technology such as CRM.

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