New York University A Thesis On

Artificial Intelligence in CRM increases ROI

By Abayomi M. Onibudo Advisor: Dr Tracy Emerick Director of Graduate Programs: Professor Anthony R. Davidson, Ph.D.

A final paper in The Information Technologies Master's Program In Management and Systems submitted in partial fulfillment of the requirements for the Degree of Master of Science in Management and Systems at New York University

_____________________________ Faculty Advisor Dr Tracy Emerick

Table of Contents
New York University...................................................................................................... 1 A Thesis On.................................................................................................................... 1 1 Artificial Intelligence in CRM increases ROI................................................................ 1 Table of Contents................................................................................................................ 2 Dedication........................................................................................................................... 4 Acknowledgements.............................................................................................................5 Declaration..........................................................................................................................6 Abstract............................................................................................................................... 7 List of Abbreviations and/or Glossary................................................................................8 1 Chapter 1........................................................................................................................... 9 1.1 Introduction ..............................................................................................................9 1.2 Background (Customer Relationship Management)................................................. 9 1.3 Research Objectives and Its Limitations................................................................. 11 1.4 Literature Survey..................................................................................................... 14 1.5 Data Collection........................................................................................................ 17 1.6 Methodology............................................................................................................ 17 2 Chapter 2........................................................................................................................ 18 The Need for Customer Loyalty and CRM.......................................................................18 Introduction....................................................................................................................... 18 2.1 The Need for CRM ................................................................................................. 19 2.2 The Role of Marketing in CRM...............................................................................23 2.3 The Market Intelligent Enterprise............................................................................ 24 2.4 The Need for AI in MIE.......................................................................................... 27 3 Chapter 3......................................................................................................................... 30 Categories of CRM Systems............................................................................................. 30 Introduction....................................................................................................................... 30 3.1 CRM in Customer Service....................................................................................... 30 3.2 CRM in Sales........................................................................................................... 33 3.3 CRM in Marketing.................................................................................................. 35 3.4 CRM in Knowledge Management........................................................................... 37 3.5 CRM in Mobility..................................................................................................... 39 4 Chapter 4 ....................................................................................................................... 42 Artificial Intelligence........................................................................................................ 42 4.1 Introduction..............................................................................................................42 4.2 Background to AI.................................................................................................... 42 4.3 Current Applications of Artificial Intelligence........................................................ 45 4.4 AI in Business.......................................................................................................... 48 5 Chapter 5 ....................................................................................................................... 62 Conclusion........................................................................................................................ 62 5.1 Recommendations....................................................................................................62 5.2 Thesis Conclusion.................................................................................................... 65 5.3 Summary.................................................................................................................. 65 5.4 Scope for future Research........................................................................................ 67 2

5.5 Originality................................................................................................................ 68 5.6 Contribution to Body of Knowledge....................................................................... 68 References and Bibliography............................................................................................ 70 Appendix A....................................................................................................................... 75 ...........................................................................................................................................76 Appendix B....................................................................................................................... 78 Graphical representation of Oracle E-Business Suite....................................................... 78 ...........................................................................................................................................78 ..........................................................................................................................................79 Appendix C ...................................................................................................................... 80 Picture of a Glowing Biological Neuron.......................................................................... 80 Appendix D ...................................................................................................................... 82 Representation of Artificial Neural Network.................................................................... 82

Dedication
To my father and mother, Ahmed and Ebunola Onibudo.

Acknowledgements

I like to give all thanks and glory to God for the opportunity to undertake this course regardless of the economic and academic requirements. I will also like to thank my parents for their continual support in helping cope with the demands of the course. The successful completion of this thesis involved a lot of valuable contributions from a number of people to whom I am truly grateful. I am very grateful to Dr Tracy Emerick for the intellectual stimulation, suggestions, guidance and support given to me throughout this project.

Declaration

I grant powers of discretion to the Department, SCPS, and NYU to allow this thesis to be copied in part or in whole without further reference to me. This permission covers only copies made for study purposes or for inclusion in Department, SCPS, and NYU research publications, subject to normal conditions of acknowledgement.

Abstract
The foregoing masters thesis is concerned with enhancing information technology to increase Return of Investment (ROI) of Customer Relation Management (CRM) software. The project investigates the use of technology in CRM to acquire, store and analyze customer information for achieving customer loyalty and higher customer retention. It further demonstrates the means by which CRM software and tools available on the market are used to foster and manage customer relationships. The paper touches on the subject of Artificial Intelligence (AI) which enhances the use of information technology in businesses that seems to be growing and extending into the CRM space. The use of AI in business is then explored in the CRM domain for buttressing ROI. The paper also gives background information on the concept of CRM with tutorial material on AI and uses case studies of AI in business as tools for further exploration. This includes discussions on how CRM software coupled with AI is used to ensure that customer information within organizations is better utilized in realizing higher ROI. In addition, the paper discusses the role of the AI in CRM with regards to the evolving Mobile platform.

List of Abbreviations and/or Glossary

AI.Artificial Intelligence ANN.Artificial Neural Network BIS..Business Information System CRMCustomer Relationship Management CSF..Critical Success Factors ERP Enterprise Resource Planning GPSGlobal Positioning Satellite KMKnowledge Management MIE..Market Intelligent Enterprise MISManagement Information Systems NN....Neural Network SCM...Supply Chain Management SMESmall-to-Medium size Enterprise ROI.Return on Investment WAP.Wireless Application Protocol

1 Chapter 1
1.1 Introduction

This research project explores the idea of applying Artificial Intelligence (AI) techniques to the field of Customer Relationship Management (CRM) technology. The paper begins with background information on the concept of CRM with insight into mobile-commerce with drawing qualifications for AI. The paper ends with a brief tutorial on AI followed by an outline of case studies on AI applications in business to illustrate that AI can increase ROI in CRM.

1.2 Background (Customer Relationship Management)

The global economy appears to be in a revolutionary state as power shifts from organizations to consumers. The pace of this revolution seems to be increasing, as customers continue to evolve from online e-customers to mobile-customers, who demand products and services on the go. Customers can now request products and services from various locations such as airports, coffee shops, parks and university campuses while on the move. Also, the dynamics of the market place for most organizations seem, to be ever changing as customers become less loyal. This suggests that merely satisfying customer needs is not enough for organizations to earn customer loyalty. Organizations must therefore, provide products and services that exceed customer expectations, which is because market demand and supply appears to be more influenced by customer wants and not needs. The quality of service that customers must receive during each transaction with an organization must be exceptional for organizations to be worthy of loyalty and referral. 9

The customer revolution requires organizations to become customer-centric businesses that focus on each customer transaction. This implies that each customer transaction is to be treated as an opportunity to gather more customer information. Many organizations attempt to become customer-centric and promise to offer exceptional services, but most often the change is in the slogan only and not in the quality of service offered. The reason for this is that the leadership in most businesses do not know how to become customer focused. Organizations need to realize that the profit of tomorrow is the reward for superior service offered today to sustained customers and their loyalty. The technological aspect of CRM can even be more of a challenge, particularly if the right technology is not chosen. Organizations wishing to adopt CRM must ensure the CRM software and tools will support all facets of their customer interfaces. The CRM software should contain cutting-edge technological developments such as Artificial Intelligence.

CRM can best be described as an organizational commitment to creating life long customer loyalty. CRM goes beyond the acquisition and implementation of technology. It is a comprehensive process-oriented approach that provides seamless coordination between sales, customer service, marketing, field support and the customers. CRM integrates people, processes and technology to maximize on each transaction with customers, including e-customers, mobile-customers and distribution channel members. The goal of CRM is to achieve optimal profitability and high customer retention rates. This implies that CRM is more than the acquisition of technology, but a process of interacting with the customer in an effort to align operational resources to meet customer

10

expectation. Therefore, it is important that companies understand CRM originates from the main customer related departments (marketing, sales and services) and should extend to other departments. The CRM process involves generating value through the use of technology to share customer information among employees, departments and often with third parties. However, the CRM process is far from complete without the participation of the customer.

In order to achieve customer loyalty, it seems that organizations will need not only satisfy the needs of the customers, but also exceed their expectations. This implies an

understanding of the goals of establishing customer loyalty i.e. reaching increased levels of profits and higher customer retention. This supports the assertion by Peter Drucker, that the purpose of a business is to create customers i.e. revenue generating customers, retaining those customers and increasing the depth of their relationship with the business. (Kristin L. Anderson and Carol J. Kerr, 2001). The notion behind this according to Fredrick Reichhold and Earl Sasser, (2001), is that most customers are only profitable in the second year of doing business with the organization. Ultimately, the services

provided by the organization must make the customer want to come back for more. This requires a carefully planned long term service strategy.

1.3 Research Objectives and Its Limitations

1.3.1 Thesis Objectives
Applying AI solutions to bring about higher Return on investment or ROI.

11

Evaluating the possible uses of AI enabled CRM and its incorporation into upcoming mobile-commerce or m-commerce.

These topics are suitable for all readers interested in the application of Artificial Intelligence to Customer Relation Management particularly company sales and marketing managers/directors.

1.3.2 Limitations
This study is limited to improving the technological aspect of customer relationship management. Specifically, how to incorporate AI into CRM to enhance all facets of customer interfaces. This limitation might be justified by the fact that CRM implementation entails the integration of people, processes and technology.

1.3.3 The Hypothesis

I. = The use of AI artificial intelligence in CRM solutions increases ROI.

This thesis aims to discover if the hypothesis is true or not. If the hypothesis is true, the logical suggestion would be that CRM software needs to develop with AI capabilities to enhance all facets of customer interaction including e-commerce and m-commerce. This should result in a reduction in the overall cost of adopting and running a CRM program. In effect, AI powered CRM should become a reality that is readily available for large organizations and organizations in the Small-to-Medium size Enterprise (SME) space. If

12

the hypothesis is false, then the conclusion is that CRM practitioners may not need to focus their attention on AI.

In order to prove or disprove this hypothesis a mathematical model will be used based on the Complex Interrelationship model for ROI introduced by SAP. The concept considers that under CRM there are a number of complex interrelationships i.e.; there are causal relationships between the individual processes that relate to a goal. SAP describes this in a service-level example as if all relevant customer data is entered when an order is received, better after-sales support can be provided more quickly, because this data does not need to be entered again. According to SAP, this shows that for an effective data entry made per order, there is a considerable effect on the subsequent process of support to that order. Subsequently, ROI may be calculated as either cleaned or uncleaned. ROI cleaned can be described as the value of ROI when forecast values are considered while ROI uncleaned excludes such forecast values. Forecast values are regarded as measures which may be introduced in an effort to increase customer loyalty. These values may have an effect on the product or services. For example, SAP illustrates that subsequent intensive evaluation and documentation of consulting meetings may cause a particular product to be modified.

For the sake of simplicity, the thesis uses the ROI (cleaned) to determine ROI. SAP suggests two possible ways to calculate ROI (SAPInfo, 2003) II. = ROIcleaned = (Ce-Cz) * 100 /Icrm III. = ROIuncleaned = (Rz+Ce-Cz )*100 /(Icrm-Iu)

13

ROI = Profitability of the investment project Rz = Additional revenue Ce = Costs saved Cz = additional costs Icrm = CRM investment Iu =- Total investment For the hypothesis to be true the equation ROIcleaned = (Ce-Cz)*100/Icrm must exist such that Icrm decreases or (Ce-Cz) increases.

1.4 Literature Survey

1.4.1 Purpose
The survey intends to provide CRM practitioners with a view on academic research in the AI application to CRM domain, and to provide references to potentially relevant literature.

14

1.4.2 Method
This represents the literature survey in which the study is based on Customer Relationship Management. The usual academic sources were searched: online databases (such as texts, journals, publications, CRM Consulting companys websites, CRM vendors websites, online practitioners forum (CRM-Forum) and internet search sites such as Yahoo and Google. Where possible, hyperlinks to material have been provided. The study investigates the role of people, process and technology in the process of managing customer relationships from the topic areas of Management, Marketing and Information Systems. The study goes further on to explore the different categories of software that are available on the market.

Furthermore, the various software tools are aligned per category of CRM software in order to illustrate how they can be used for different aspects of Customer Relationship Management. Also, various modules of a sample CRM system and how they fall into these different categories will be described. Finally, the paper extends to contribute to the topic of CRM by investigating the possible roles of artificial intelligence and adaptive technology in CRM. This is achieved by reading, and reviewing the relevant AI methods used by various industries. The appropriate journals, newspapers, business papers,

frequently asked questions (FAQ) sites and university sites were all obtained via internet and literature.

15

1.4.3 Survey Result

In light of the survey, CRM appears to have been created by marketing and information technology professionals as a result of the convergence of technology and marketing. Also, it seems that the human and procedural aspects appear to be somewhat optimized for the CRM process. However, the technological aspect has room for improvement particularly in AI application. It appears that AI in the field of CRM is still in the discovery stage and some research proposals have been made and are currently undergoing study by CRM practitioners.

Academic research in this area seems to be fragmented and not based on sound theory. Furthermore, some academics tend to see CRM technology to be primarily based on relational database systems comprising of customer data. This is considered suitable for pattern analysis technology, which appears to be an area of interest to practitioners and a source of possible commercial funding. This also appears to be creating a number of CRM related topics stemming from marketing and management to be included in AI curriculum.

Research organizations (Gartner, Capgemini, and Accenture) have taken a slightly different approach with their focus on short-term industrial trends (financial metrics), vendor product assessments and case studies. A dominant theme in this research is Return on Investment. The main topic of research appears to surround how the costs and benefits can be captured to justify projects and consulting fees.

16

1.5 Data Collection

Data collection was limited to information gathered from online CRM forums, news articles, press releases, vendor white papers and academic papers. The data collected included case studies exemplifying AI applications in businesses.

1.6 Methodology

The papers research was mainly based on literature study and observation through review of the relevant CRM and Artificial Intelligence methods used in business, using books and the Internet to find the appropriate Portals, Online Discussions, journals, frequently asked questions (FAQ) sites and university sites. This required extensive reading about CRM and undertaking an online Netg course on fundamentals of CRM sponsored by Capgemini. Furthermore, a comparative analysis of the literatures was made to identify relevant information for the thesis body. Further contributions made to the paper were largely insightful, based on knowledge gained from the authors professional experience as an Information Technology consultant and undergraduate level knowledge in Computer Engineering.

17

Chapter 2 The Need for Customer Loyalty and CRM

Introduction

This chapter discusses the background and nature of CRM and how it came into existence. The chapter starts with the evolution and transformation of the customer. It

also discusses the history of customer relationship management and the existing types of relationships. This is necessary because, it is important to understand that CRM is more than an implementation of technology. CRM should be regarded as a new culture requiring attention to customers interactions. Through CRM, organizations should be able to maximize the effectiveness of each interaction to achieve their goals of customer retention and higher profitability. It is therefore important for organizations to understand that the technology of CRM is merely a tool that enables customer interaction. This chapter will discuss how to develop customer loyalty as thought by the National Education Training Group (Netg, 2002), and personal opinion based on observations and knowledge of the topic.

18

2.1 The Need for CRM

Todays customers bring new challenges to organizations in varying ways such as rapid customer growth, low retention rates, competition, globalization and information overload. These new challenges coupled with emergence of the Internet as a technology platform enabling electronic commerce, service and marketing led to the growing importance of CRM. The marketplaces have become electronic markets enabling competing enterprises to have a mouse-click distance apart from the customers points of view. The result to businesses is the realization of CRM as a business strategy aimed at anticipating, understanding, and responding to the needs of its current and potential customers. As stated earlier, CRM seems to be a new culture defining how an organization regards each customers transaction as an opportunity for gathering information that will be used to better serve the needs of the customer. This involves sharing customer information that has been created from across the enterprise including a consolidation of internally and externally acquired customer-related data. The consolidated data repository is then analyzed and distributed to various departments of the company for use during customer interaction. The end goal for organization is to achieve optimal profitability and increased customer retention rate.

According to Dataquest (2000) there are two major segments of CRM: maintenancerelated services and professional services. In maintenance-related services CRM efforts are geared towards the maintenance and support of hardware and software. The report further indicated that under professional services there are six main sub-segments: 1) Business and IT consulting; 2) Software application development, integration and

19

deployment services; 3) education and training; 4) IT infrastructure management services; 5) transaction processing services; and 6) business management services.

2.1.1 The Importance of Creating Loyal Customers

The ultimate goal for establishing Customer Relationship Management for an organization is usually to maximize the profit potential of its customer base through optimised operational effectiveness and high customer retention rates. This implies

success in different organizational activities such as in marketing, sales and services. It appears that there is a general trend of increase in consumer spending over time. For instance, in the automobile service industry, the average annual revenue per customer triples between the first and fifth year. Organizations can study and use marketing data as a basis for developing customer loyalty and achieve higher revenue and profits. Also, revenue and profits could also be increased by offering a variety of products and services through cross-selling and up-selling.

Furthermore, it appears organizations can benefit from loyal customers since such customers comment on good services and as general marketing principles suggest, a potential customer is more likely to purchase goods or services based on referrals. This seems to be true as recommendations appear to be valued more than advertisement. This also supports the notion presented by marketing researchers that word-of-mouth advertising accounts for around fifty percent of consumer purchases. Also, positive

20

comments about an organizations products or services help reduce the cost of advertising. However, it is important to realize that a negative complaint by a customer is more likely to be talked about than a positive experience. Hence, organizations should attempt to create positive and memorable customer experiences that help build customer loyalty.

2.1.2 Steps for Creating Loyal Customers

Customer loyalty is achieved slowly and requires time to develop but, todays markets are fast paced and organizations are eager to see return on investments fairly quickly. Thus organizations must try to achieve customer loyalty in a timely fashion by establishing a number of strategies for creating and maintaining customer loyalty. According to the National Education Training Group, this consists of the following;

a. Developing dedicated Employees. b. Making service more memorable. c. Building Relationship with the Customer.

2.1.2.1 Developing Dedicated Employees

In developing dedicated employees, organizations need to view and regard their employees as stakeholders, whose participation is vital to the success of the business. It is also in the organizations interest to select the most qualified people available since it reduces the cost of training. Employees should also have genuine interest in their work and a clear picture of the direction and nature of the business as it aids in the presentation of the right attitude to customers. These points are crucial because employees are the 21

point of contact between the organization and the customers. Therefore, in the pursuit for customer satisfaction organizations also have to ensure ongoing employee satisfaction and appraisal. Organizations need to establish proper training programs that will equip the employees with the skills they need in order to be competent and empowered in their roles. Managers in organizations should encourage and acknowledge employee

achievements, as this elicits the feeling of being appreciated, which is arguably as important as regular work compensation.

2.1.2.2 Making Customer Service Memorable.

The process of creating customer loyalty is not a science or a step by step process in which an organization can easily execute. The manner in which customer loyalty is created will differ across organizations. This will be a natural occurrence, where by

organizations attempt to step into the shoes of the customers to identify their true needs. Hence, organizations need to identify the difference in the level of service offered and the level of service expected. This will help in determining whether a service is regarded as poor, good and/or memorable. If the level of service is regarded below expectation then the service is poor. Likewise if the service is just in line with or above expectation then it is regarded as good. These suggest that organizations have to work closely with its customers to identify scenarios which provide services that exceed their expectations.

22

2.1.2.3 Building Relationships with the Customer

After acquiring dedicated employees that are able to deliver memorable services, an organization can start to build long standing relationships with its customers. However, this requires commitment to meeting customers needs and obtaining customers feedback concerning services rendered by conducting regular surveys and data analysis in order to improve consumer-provider services. According to a research report by leading non-profit organization (Gartner), organizations can measure and evaluate their progress by monitoring customer behaviour patterns. These patterns include: 1. The percentage of lost customers. 2. Revenue obtained from loyal customers over a period of time. 3. The ratio of sustained customers to lost customers. 4. Benefits (quality, time and money) received by loyal customers.

2.2 The Role of Marketing in CRM

According to Philip Kotler (2002), a renowned professor of marketing, the marketing concept suggests that the key to achieving organizational goals depends on how well an organization can determine the needs and wants of its target market. This is closely followed by the ability to satisfy those needs and desires more efficiently than its competitors. The emphasis here is that the main factor that should drive an organization's effort is satisfying the customer's needs and wants. Therefore, an organization needs to become a market intelligent enterprise that is able to identify and anticipate the needs and wants of customers accurately. That is, marketing within the organization becomes a

23

customized process which facilitates the development of relationships with customers. The establishment of relationships with customers will facilitate feedback which can be used to measure the organizations success at meeting customers needs. As described by The National Educational Training group, there are four main tiers of marketing which help facilitate the development of customer relationships. Each tier enables specific focus on a customer segment:

Mass Marketing Target Marketing Customer Marketing One-to-one marketing

2.3 The Market Intelligent Enterprise

In an effort to gain a competitive advantage, a market intelligent enterprise or MIE is a company that focuses on reaching out to the most profitable. Becoming an MIE involves establishing specific strategic and marketing goals to foster the development of one-toone marketing relationships with individual customers. This implies that an MIEs goals are driven by the needs and desires of customers. Therefore an MIE anticipates the needs and desires of its customers and plan to meet customers expectation more efficiently.

24

There are four main goals of a Market Intelligent Enterprise:

1. Utilizing Customer Information. 2. Focusing on each transaction. 3. Utilizing Information throughout the enterprise. 4. Managing customer communication channels.

2.3.1 Utilizing Customer Information

A market intelligent enterprise moves beyond just acquiring customer information during the negotiation stage of the first transaction to continual acquisition of information about the customer in all future transactions. The list of sources for such information includes surveys, solicitation calls, and history of past purchases from external data sources. External data sources include credit agencies, demographic statistics, marketing companies and motor vehicle registries. These together with information gathered from every transaction with the customer enables the organization become better informed about changes in customers needs and desires. In effect, the organization is able to provide the best suited products and services which ensure customer satisfaction. As a

result, the organization is able to convert high profit short-term customers into lifelong loyal customers.

25

2.3.2 Focusing on Each Transaction

The market intelligent enterprise must, focus on each individual transaction with its customers. Also, every transaction will need to be analyzed in detail to maximize

effectiveness in exceeding the customers expectation in future transactions. This type of interaction helps in achieving customer retention and higher profitability. Customer transactions should be viewed as an opportunity for success or failure since, the outcome of the transaction determines whether a customer chooses to stay with the company or leaves for a competitor. Interaction with the customer allows the organization to, gather more customer information, sell more products and services as well as further strengthen the relationship with the customer.

2.3.3 Utilizing Information Throughout the Enterprise

Todays market requires that, customers are not only acquired and served satisfactorily by the sales and service departments respectively but, by all departments. Therefore, information about the customer must be consistent across all departments. This implies that an MIEs customer information needs to be consistent and accessible to all departments of the organization, i.e. from marketing, sales to customer services and quality assurance departments. Organizations must invest in relevant technology such as databases and networks, to facilitate and support customer information storage and retrieval from all departments of the organization. The technology should enable the organization to function as, a customer- centric one. In effect, the organization will utilize

26

software and tools that aid CRM in doing so, they will sell products and services to customers more accurately and profitably.

2.3.4 Managing Customer Communication Channels

The varying number of media of communication such as email, telephone, faxes, and postal mail can often result in difficulty in managing customer contact for a large customer base. It is important for a market intelligent enterprise to be able to manage the variety of customer communication media and make it available throughout the company. As part of a CRM requirement, an MIE needs to be able to acquire communication technology that can integrate with its database management systems to enable managing information received from all communication media.

2.4 The Need for AI in MIE

There are a number of implications of becoming an MIE on ROI particularly with regards to evaluating the performance of the organization. This implies that technology

implementations should be tied to specific business benefits and the delivery of measurable ROI. Some of these benefits include how well customer information is utilized and how accurately customers expectations are met. According to Ellen Reid Smith and Reid Smith, (2003), CRM benefits appear in many areas of a company. ROI should be used in auditing all customer actions and assign a revenue value using purchase data or customer research. Ellen Reid Smith and Reid Smith suggest the following few customer actions that may be audited:

27

 Signed-up for email or program Participated in program/promotion Visited website Opened and/or read email Responded to trial offer (include rate of conversion) Intends to buy more/less in future Cross purchases Referred a friend/colleague or provided leads Bought direct versus through retailer Provided personal data that enhanced marketing Contacted customer service more/less Increased advertising response rate Moved from mail to email statement/newsletter Bought from partners (include commission or value of partner support) Defected (decrease or increase) Perceived value of brand/company

As such this collection will involve gathering large amounts of customer data to be stored into a database. The data will need to be analyzed in order to identify the crucial information which may be considered for fulfilling the goals of an MIE. Traditionally this type of analyses is done by a human user who may be subject to committing errors due to the repetitive and tedious nature of the task. A more efficient and error free approach may be the application of AI. Through AI, the analysis process should yield 28

any results faster than a human analyst. Users/employees may now focus more on making courtesy follow up calls to connect with their customers and build a better idea of what clients are looking for. AI can help in realizing the goals of organization seeking to become a market intelligent enterprise more effectively.

29

3 Chapter 3 Categories of CRM Systems Introduction

In order to understand the function of CRM software and how AI may be utilized in CRM, it is important to identify and describe the different types of CRM software. Since there is quite a large number of available CRM software on the market, the chapter divides them into different categories. Each of these categories will be described and analyzed, in order to establish their suitability for AI. This chapter discusses the actual usage of generic technology in the CRM and highlights the need for AI and possible role in Customer Relationship Management.

3.1 CRM in Customer Service

There seems to be a little irony surrounding the business of service and support. It appears that support organizations, both internal and external tend to have the perception that they are resource-hungry cost centers and not worthy of budget considerations on revenue-driven business functions. Yet for customers, support professionals represent the face of the business and often dictate the perception the company has in the public eye. And for employees relying on technology to do their jobs, the help desk can be the last line of defense against downtime, frustration and lost productivity.

30

In the 1980s, individual marketing became the focus of relationships with customers through one-to-one marketing. One-to-one customer service based on one-to-one

marketing was launched about a decade later with emphasis on individualized servicing of the customer. The emergence of the Internet has equipped companies with electronic services used to deliver higher levels of customer service and support through the Web. This form of electronic service or e-service fits very well with the goals of CRM programs. E-service allows customers to access presales or post sales information across various points within the supply chain such as online custom design and order tracking till delivery. An example of the New York State DMVs online services The New York State DMV provides online services such as ordering custom plates, replacing drivers licenses and renewing vehicle registrations. With the cyber office averaging 19,000 visitors a day, it was critical to answer more customer questions online. Today 97% of web visitors find immediate responses via online services. (Bob Thompson, 2001)

As a result of such examples it appears that customers are beginning to expect higher quality of services from organizations in various industries. This new expectations

coupled with advances in Web technologies such as Java, .Net and XML which enable the level of security required for e-business has led CRM vendors to offer various eservice options. E-service is now made available to supplement the telephone support normally offered via a call center. This shows that customers are driving the process of customer service. The e-service functionality offered by CRM technologies integrates customer self-service, interactive support, consistent levels of service and a view of customer information.

31

The service department can also benefit from AI application in CRM by enabling automatic alerts to key customer-facing individuals to take appropriate actions when customer buying or service requests patterns in the knowledge components of CRM change. Like expert systems, CRM systems should enable intelligent mapping of people against the available information sources to foster better customer services. Through systems recommendation, CRM software should extend to ensure that the right information is available to the right people at the right time and presented in a form that is customary to each person. Artificially intelligent features may also be incorporated to aid more natural language searches for a service/product finding tools for both service representatives and customers. Access to this information may enable a reduction in the number of on-site service calls which will save both the customer and company time and money. Ultimately, a CRM system should be able to help the company discover

problems and reveal solutions in a way that makes it easier and quicker to resolve issues. The use of artificial intelligence in these manners should bring about higher returns on investments.

32

3.2 CRM in Sales

In todays world, electronic business or e-business is becoming a regular buzz word used in the business environment. Information Technology or IT is the part of e-business that has been available since the late 1960s. The recent explosion of the Internet has

facilitated the development of relationships with customers through e-commerce. IT helps the marketing department create demand for products, sales, which satisfy the demands of customers, and service follow-ups with post-sale customer care.

Organizations hoping to implement CRM through e-business should realize the need to leverage customer-facing business processes with technology. The organization must be ready and willing to revamp business by performing Business Process Re-engineering. Today, most global organizations have significant e-business functions that help optimize business processes. In CRM, using e-business enables the interfacing with customers as well as linking suppliers, distributors, resellers, and retailers who make up the entire supply chain. Furthermore, CRM focus implies using Web-related technologies that enable the exchange products and purchase information to expedite the transaction process within the supply chain. This also fosters interdependencies, which force supply chain members to mutually consider strategies, knowledge base and business structures/processes.

The adoption of e-business as a method of implementing CRM will depend on the nature of business of each individual organization. The nature of business of an organization

33

will reveal how the benefits of e-business will be of value to the business. E-business benefits include: Enhanced customer service Market expansion Cost reduction Customer retention/loyalty Streamlining of the sales cycle

However, it seems that most e-business systems are only able to present customers information of purchase histories passively. This is because they appear to be unable to identify new dynamics in customers information that will prompt cross-market and wallet share opportunities.

Incorporating AI into sales will allow CRM systems to prompt the organization to recognize new dynamics in customer information that may bring about cross-market and wallet share increases. For example, by being able to view customers preferences, past problems, buying history, the system can automatically search and find more appropriate cross-market products. The demand and supply patterns can also be analyzed and used to determine ways to improve sales volume by identifying and packaging product/services together in a manner that yields better value to the customers. Todays CRM systems enable organizations to search for customer information on demand. This implies that most CRM systems will yield vital customer information only per request of the user. AI will allow urgent sales information based on new and existing transaction data to be

34

automatically pushed or made available to sales representatives to enable additionally required follow ups and recommendations.

3.3 CRM in Marketing

In an organization the role of the marketing department is to create demand for a product, while sales department satisfies the demand, and service or support department follow up with after-sales customer services. The dynamics of marketing and sales can often be elusive and counterintuitive. It seems to be easier to determine the reason why customers refuse to purchase a product or service than the reason why consumers purchase products. A memorable customer experience following that of an initial poor service can often strengthen the relationship with the customer. However, market conditions change fast and there are no definite techniques that guarantee success. The emergence of the Internet has changed and improved the effectiveness of marketing a great deal. Today, CRM vendors offer Web based marketing automation functionality as part of CRM technology. Market automation or e-marketing can be defined as an expanding set of

automation tools to help companies identify their most profitable potential customers.

In order to be truly valuable, an e-marketing system must be integrated with a knowledge management subsystem that enables the organization learn from its customers. The knowledge base will entail market and customer information from different sources that will enable e-marketing functions. This helps generate customer loyalty through

35

customized services.

Also, e-marketing allow organizations manage leads through Such subsystems may be developed and already

different distribution channels.

integrated in the CRM software or may need to be purchased from a third party. The most valuable feature of e-marketing is the ability to enable organizations better understand the behavior of customers. This benefit is not realized without analyzing large amounts of customer information that takes a lot of time. This suggests that the effectiveness of ebusiness will be enhanced if the time required enables better understanding of customer information. Artificial Intelligence can again play a big role to help reduce time taken.

The use of AI in e-marketing can save money and minimize the technical costs of creating and maintaining a marketing information system. This can be achieved by automating the processes of categorizing, tagging, hypertext linking and presenting marketing information to the right customers. The result could lead to higher customer acquisition effectiveness. Furthermore, through data classification techniques of artificial neural networks, it will be easier and faster to perform data processing for identifying market segments, and different types of customers. This will also make marketing efforts more effective by allowing the organization to focus on the most profitable customers. With AI adaptive learning capabilities in behavior patterns analysis, CRM systems will be able to detect new needs of the customers based on changes in customer behaviors, demographics, age groups, and economics. This will enable organizations extend their offers quickly to meet changing needs or wants of the customers more accurately. In addition, time series, an application of AI involving prediction based on historical data patterns may also be incorporated into CRM to enable better market forecasting.

36

3.4 CRM in Knowledge Management

In definition, Knowledge management is an audit of intellectual assets that highlight unique sources, critical functions and potential bottlenecks which hinder knowledge flow to the point of use. It protects intellectual assets from decay, seeks opportunities to enhance decisions, services and products through adding intelligence, increasing value and providing flexibility.
(CRMToday,

2003). In the domain of CRM, knowledge

management technology adds features to CRM software to enable organizations learn from each customer transaction. The knowledge gained from CRM systems can then be made available to employees. The result is that customer-facing employees are, able to make better decisions during a customer service session. The acquired knowledge may also be vital in fulfilling customer e-service. Kristin L. Anderson & Carol J. Kerr ( 2001), suggest that the effectiveness of knowledge management in CRM has led to improvements in customer retention rates and reduced costs in customer services.

Furthermore, it seems in an effort to gain higher ROI, CRM practitioners seek to minimize the operational cost in servicing customers but may do so ineffectively. It is important to note that Knowledge Management tools do not play any role in knowledge management or knowledge utilization. It is only when these tools are applied by trained employees to capture and share information that the tools become useful to the

37

organization. In this context, a tool is one aspect of technology that is typically used to achieve a particular goal or set of goals. Benefits of knowledge management tools include:

* Speed * Flexibility of usage * Open data model * Accuracy * Multiple hardware platforms and operating system environments.

However, with traditional software algorithms these benefits are only just realized and therefore can be improved with Artificial Intelligent algorithms. This is true because AI algorithms are based on methods and techniques used by biological entities such as biological neurons of the brain. The heart of AI in knowledge management is the aggregation of knowledge, customer information, user experience and expertise to provide better customer interactions, either during a self-service or a call to call-center. This will allow traditional knowledge management to be enhanced with specific customer information such as time spent, time of day, days of the week and/or time of year can be used to substantiate different sets of new customer segmentation. This will be

beneficial to all categories above. In service, AI in CRM will foster savings in resources by preventing users from focusing on tedious manual maintenance tasks by, automating the creation and administration of information portals. Through pattern recognition

features of Artificial Intelligence, it should be possible for a CRM system to learn and

38

organize information for appropriate audiences within the organization, during and after each customer interaction.

3.5 CRM in Mobility

A relatively new platform for CRM is that enabled by Handheld PC, Data assistance and Smart Phone devices, now available for use by organizations on-the-move sales and marketing executives. The primary areas of application is the communication of data between marketing and sales personnel from anywhere at anytime. This is beneficial to organizations because it contributes positively by improving cost performance. The devices are also useful in inventory management, and route accounting. The CRM feature normally requires a thin-client software application running on the mobiledevices operating system e.g. WinCE and Palm OS. Another area gaining popularity is Mobile-commerce or m-commerce which is enabled Wireless Application Protocol or WAP cell-phones and mobile-telecom service providers. Unlike e-commerce which is enabled by desktop computers that are used at home or in the office, m-commerce gives customers the flexibility of purchasing products and services any where wireless.

Traditional CRM methods used in e-commerce via desktop computers may be applicable to m-commerce. A number of content and/or service providers now offer limited

products and services through Wireless Application Protocol or WAP. However, these services are mainly in small content entertainment such as games, ring-tones, weather,

39

directory services and text messaging via SMS for cell-phones.

Also, most of the

products and services are yet to foster the use of CRM technology in capturing customer information to the levels currently attainable by e-commerce. This seems to be due to

the fact that first generation GSM technology has bandwidth limitation of about 9.6 kilobits per second or KBS when compared with dial-up or broadband internet of 56kbs and higher. This bandwidth limitation coupled with the limited User Interfaces of most cell-phones and wireless devices has not made m-commerce practical. This in turn has not permitted real value offers of CRM in the mobile arena. Ripping the full potential of m-commerce will depend on how soon third generation GSM or 3G mobile technology becomes commonly available. This will enable wireless communications at even higher bandwidth than dial-up at rates similar to broadband.

The bandwidth limitations of current Mobile-commerce, have not allowed the full potential of wireless devices to be used as an avenue for aiding customer transaction. This leaves little room for CRM and AI in managing customer experiences in mobility. This is true because organizations are currently not able to create or manage customer loyalty in m-commerce like they do in e-commerce. However, the eventual arrival of Third Generation or 3G mobile technology will make this possible as m-commerce becomes as practical as e-commerce. 3G will enable broadband connectivity, which will allow richer multi-media content to be delivered at rates similar to that of desktop computers. This coupled with new types of cell-phones, wireless personal data devices with multi-media enabled User Interfaces, will make m-commerce more practical. Nevertheless, first generation GSM may still serve as the basic platform for developing

40

AI enabled mCRM technology for future 3G m-commerce. AI applications in Global Positioning Satellites or GPS guided missile technology enable missiles to be delivered accurately to their target location. Similarly, current mobile technology, can allow organizations identify an m-customers location via GPS coordinates of cell-phones. The convergence of current mobile technology and upcoming 3G technology requires a rethink of our current markets and how CRM is perceived in order to take advantage of the full potential of 3G.

41

Chapter 4 Artificial Intelligence

4.1 Introduction

In this Chapter, the history and current use of AI is briefly discussed as a tutorial of the subject area. The goal of the chapter is to give examples of how AI is used in businesses of various industries. The latter part of the chapter outlines case studies of AI applications in CRM that illustrate the hypothesis.

4.2 Background to AI

In order to see the potential benefits of AI application to CRM, it is important to understand the meaning of artificial intelligence. Artificial intelligence can be defined as The branch of computer science that is concerned with the automation of intelligent behavior (Luger & Stubblefield, 1993). Artificial Intelligence or AI is a concept in computer science, which involves the implementation of computerized neural networks that simulate pattern recognition and decision making of biological neural networks. Today, the technology is used to analyze data and identify targets and diseases in scientific and biological imaging applications (missile technology and cellular technology respectively). Similarly, the same techniques can be applied to data in the field of knowledge management particularly that pertaining to CRM. In particular, AI could be used to improve the effectiveness of each CRM category i.e. service, marketing, and sales

42

and knowledge management. This will be useful to most medium-sized to large-sized organizations software systems containing, substantial amounts of information. Thus, the study reveals the role for AI applications in CRM Systems to better aid organizational efficiency in developing and managing customer loyalty in a manner that leads to higher CRM ROI.

4.2.1 Machines Acting Humanly: The Turing test

The Turing Test is based on machine intelligence and machine operation in a human like manner. These types of machines are usually made up of computer hardware and

software. This raises the question as to whether machines can behave intelligently, e.g. being capable of participating in games i.e. the Imitation Game. The theory leads to the prediction that with the aid of AI components (knowledge, reasoning, language, understanding and learning) by year 2000, a machine might have a 30% chance of fooling a lay person for five minutes. At the time, the Turing theory was found to be unreproducible, unconstructive and un-amendable for mathematical analysis. The

emergence of sophisticated computer games, training aids such as flight simulators and medical surgical equipments has proven these machines to be very capable of behaving and operating intelligently.

43

4.2.2 Cognitive Revolution

The 1960s gave birth to the cognitive revolution which brought about, the transition from behavioural theory to the study of information-processing psychology. The theory involved how to go about validating internal activities of the human brain to a defined level of abstraction such as knowledge or biological circuitry or neuronal activity. One suggested method of validation termed the top-down approach involved predicting and testing behaviour of human subjects (Cognitive Science). The other is often regarded as the bottom-up method which involves direct identification of neurological data (Cognitive Neuroscience).

4.2.3 Laws of Thought

The laws of thought are concerned with the study of machines and their ability to prescribe a solution to a problem. This raises the question of what the correct

arguments/thought processes necessary for machines to be able to prescribe more accurately are? Solutions to this seemed to be framed around logic notations and rules of derivation of thought. These researches together with mathematics and philosophy

formed the basis for modern day Artificial Intelligence.

4.2.4 Rational Behaviour

This study is concerned with machine ability to do the right thing i.e. to do something that is expected to maximize goal achievement given available information. This does not require the machine to be capable of thinking or having any kind of reflexes. It could 44

be said to follow one of the philosophies of Aristotle, i.e. every art and every inquiry and similar action and pursuit is carried out to aim at some good.

4.2.5 Rational Agents

The study of agents is geared towards the design of rational agents which are seen as entities that perceive and act. Agents can be abstractly described as functions made from percept histories into actions whereby for any given class of environment and task the agent with the best performance is preferred

4.3 Current Applications of Artificial Intelligence

4.3.1 Expert System

Expert systems research seems to be concerned with using technology to make expertise available to decision makers and technicians who need solutions to problems. This implies the need for in-depth knowledge of specific subjects that can aid the system in serving those that need the solutions. Expert systems seem to also incorporate intuition and way of reason that are usually common in the human experts they are cloned after. They are built such that they are capable of assisting supervisors and managers with situation assessment and long-range planning. Today, expert systems can be developed with a range of shell software that has been specifically designed to enable quick development. They are also supported by a range

45

of programming languages including AI languages such as LISP and Prolog, as well as traditional languages like FORTRAN, C++, and Java.

4.3.2 Artificial Neural Network

Artificial Neural networks are modeled after their biological counterparts see Appendix C and D. The single cell of a biological neuron consists of the cell body, or soma, the dendrites and the axon. The dendrites receive signals from the axons of other neurons. The small space between the axon of one neuron and the dendrite of another is the synapse. The dendrites conduct impulses toward the soma and the axon conducts impulses away from the soma. The soma and axon seem to enable the neuron to function by integrating the input received through its synapses on its dendrites then generating an action potential. An Artificial Neural Network or (ANN) can be termed as an

information processing technique based on the structure of biological nervous systems consisting of the brain and spinal column used to process information. The key element of this technique is the novel structure of the information processing system. A Neural Network contains a large number of highly interconnected processing nodes (neurons) working together to solve problems. ANNs determine success or failure of an input dataset based on a preset success/failure threshold and success and failure pattern history. An ANN is configured for a specific application such as pattern recognition or data classification through a learning process.

Learning in biological systems involves adjustments to the synaptic connections that exist between the neurons. Artificial Neural Networks (ANN) is currently a popular research

46

area in medicine. Researchers in the fields of medical information technology believe that ANN will receive extensive application to biomedical systems in the next few years. At the moment, the research is mostly on modeling parts of the human body and recognizing diseases from various scans (e.g. cardiograms, CAT scans, and ultrasonic scans).

A Neural Network is per design, and is aided by learning to recognize patterns. Learning is achieved through repeated minor modifications to selected neuron weights or threshold of some importance. The network typically is programmed to have randomized weights assigned to each neuron. This sets a basis for the neurons to be knowledge free and requiring training before they can be useful for their application. Once trained, the neural network will then be able to find the desired output to a given set of input; however, there is no guarantee that the desired output will be produced. An ANN seems to learn by either a supervised or an unsupervised learning process. The pattern recognition

technique seems to be one of the most popular in forecasting time series on financial data. ANN is particularly useful because, it can easily recognize patterns that have too many variables for humans to see. Also, it has several advantages over conventional statistical models e.g. they handle noisy data better and do not have to fulfill any statistical assumptions.

47

4.4 AI in Business

The application of AI in CRM has the potential of increasing ROI by enhancing operational effectiveness and lowering operational costs. Although the concepts of AI in CRM has been identified by vendors and practitioners, the application of AI to CRM appears to still be undergoing research and its benefits are yet to become a reality for organizations. This section uses case studies to highlight some specific applications of AI that may be applied to CRM.

4.4.1 Case Study: Radicas Obert, the Artificial Marketing Campaigner

A sample application of AI in marketing is that of Obert, a product by Radica's. Obert, a 100% Java based application employs Automated Collaboration Filtering (ACF) technology and multi-strategy manipulation program. According to Radica, this is achieved through a unique A.I. technology, incorporated into the core "brain" of the application. It could act like an intelligent e-salesman that can automatically identify a customer's unique preference and provide one-to-one recommendations to stimulate the customer's purchase according to information like comments about the product, shopping history, browsing records and personal information provided by the customer.

BUPA, one of the largest health insurers of the world, adopted Radicas Obert in an effort to increase its brand awareness and sales turnover during the SARS period. The initial trial of Obert resulted in a big jump in the demand for SARS updates. This result persuaded BUPA to provide more timely information about SARS cases and also market 48

its medical health plans. Through the use of Obert, Radica was able to help BUPA to deploy a customized Anti-SARS campaign in less than a week. The solution provided daily news update and accumulated statistical figures about SARS cases. Orbert enabled BUPA to direct respondents to a dedicated section of BUPA health gallery Web site containing news and information about the progress in the fight against SARS. The campaign helped BUPA to experience more than 1.5 million hits at the special SARS Web site in May alone. According to BUPA, the company had an estimated 15 percent growth in sales for the months of April and May compared to the same period a year earlier.

The above shows that Obert an Artificial Intelligence solution was able to contribute to BUPAs success in two different ways. The company saved on time to deploy the technology for production use. Secondly, improved operational effectiveness reduced marketing costs through up-selling and cross-selling which enabled BUPA to enjoy a 15% increase in revenue.

Also, time can be associated with cost savings since cost is a factor of time i.e. Labor cost = Rate X Time or consulting charges = Rate X Time Therefore, from above, an evaluation of equation II = ROIcleaned=(Ce-Cz)*100 /Icrm of chapter 1, it can be seen that Ce (saved cost) increases per AI introduction, assuming Cz and Icrm remain the same.

49

4.4.2 Case Study: BrainMaker, the Intelligent Direct Mailer

Another example of the use of AI in business is taken from California Scientifics success stories. California Scientifics flagship software BrainMaker a neural network is used by Microsoft to maximize returns on direct mail. Each year, Microsoft the worlds largest software company sends out about 40 million pieces of direct mail to its 8.5 million registered customers. The direct mails are used to try to convince customers to upgrade their existing Microsoft software or to buy other related products. Before BrainMaker was implemented, Microsoft previously sent direct mail to all registered customer. This previous effort was not effective. The key was to send the direct mails to only those individuals who are most likely to respond. Jim Minervino Microsofts spokesman stated that, "Prior to using BrainMaker, an average mailing would get a response rate of 4.9%. By using BrainMaker, our response rate has increased to 8.2%. The result is a huge dollar difference that brings in the same amount of revenue for 35% less cost!"

The use of BrainMaker neural network for Microsofts direct mail success required the configuration of neural network variables. Initially, the network was trained with about 25 variables taken from seven or eight campaigns with high and low price point products. The neural network model was trained for about seven hours until it stopped making progress. This was followed by a process of elimination whereby variables that exhibited little or no impact were eliminated. This process was repeated as a model based on nine inputs. Jim Minervino stated other training considerations: "During training I used 'modify size' and I used 'prune neurons' as training completes, I used 'add neurons', and

50

we performed an experiment with 'recurrent operations' although in the net model we ended up using the default."

The article also indicated that the output was a quantitative score from zero to one indicating whether an individual should receive or should not receive a second mailing. Minervino found a score average of .45 to be the threshold for determining whether a customer was responsive or non-responsive. The results of using the model showed repeated and consistent savings with an average mailing having a 35% cost savings.

The above case study for BrainMaker indicates a positive impact on ROI when considering equation II = ROIcleaned = (Ce-Cz) * 100 /Icrm introduced in Chapter 1. Again it can be seen that from the case study saved cost (Ce) increases per AI introduction to marketing aspect of CRM assuming Cz and Icrm remain the same.

4.4.3 Case Study: Brightwares eServicePerformer

The rise of the Internet has brought about a means of service to hundreds of thousands of potential customers through e-mail. This new type of service avenue also created room for exhaustive service requests resulting in logjams and problems for service administrators. An example of this problem is in the Computer Worlds article by Deckmyn (1999). The article described an e-mail service problem that occurred in 1997 when the Toronto Dominion Bank Financial Group started experiencing floods of emails, over 2,000 service request per month from its customers. After shopping around for solutions, the bank opted for Brightwares (now Firepond) AI-based solution called 51

eServicePerformer.

According to Brightware, eServicePerformer handled e-mail by

automatically understanding the content of messages, classifying them for appropriate handling, and dynamically composing replies to questions in incoming messages. This implied that Toronto Dominion Banks workers would only need to review, approve and send the completed e-mail response.

A description of how eServicePerformer works suggests the use of Artificial Neural Networks. eServicePerformer delivered a successful AI solution for the bank. At the time after implementation, the solution was handling up to 12,000 messages per month. According to the article, Steve Gesner, vice president of interactive services for the bank, confirmed that about 40% to 45% of e-mails are answered automatically using AI techniques.

Once again, from above an evaluation of equation II = ROIcleaned = (Ce-Cz) * 100

/Icrm introduced in Chapter 1, it can be seen that Ce (saved cost) increases per AI
introduction to service aspect of CRM assuming Cz and Icrm remain the same.

4.4.4 Case Study: Axedas DRM (The CRM Robot)

In an article titled The CRM Robots are coming for CRM Daily, Kimberly Hill (2002) writes that servicing machines and customers remotely is becoming the norm in CRM. She states that the promise of device relationship management is that machines can keep each other up and running with little need for human intervention or inconvenience. According to the article, DRM can be defined as software that lets businesses manage

52

and service computers and other types of equipment from a distant location. Axeda, one of the pioneer companies in the emerging DRM market announced in a press-release (2002) that Hitachi High-Technologies adopted Axeda DRM for use in Hitachi Series Plasma Etch System including its M700 and U700 series for 300mm wafer application.

Hideyuki Yamamoto, senior engineer of Hitachi High-Technologies - Kasado Works indicated that Axedas DRM is helping them reduce the high costs and low operational efficiency problems experienced within its semiconductor fabrication facilities. According to International SEMATECH, the cost of equipment downtime to a chip manufacturer can often exceed $100,000 an hour as stated in the article. Mr. Dale Calder, Axeda president and founder indicates that this type of costs is making equipment manufacturers respond quickly and efficiently in addressing fabrication problems regardless of time and geographical location.

Axeda claims that its Device Relationship Management System incorporates e-diagnostic features and functions that support emerging semiconductor industry guidelines and standards now being created by the International SEMATECH (ISMT), Selete and SEMI organizations. According to Axeda to DRM White paper (2002) the technology comprises of highly configurable artificial agents utilizing standard network and database technologies. Also, Axeda states that with its DRM semiconductor equipment manufacturers can now securely leverage the Internet to remotely monitor, manage, and service intelligent devices deployed at fabrication centers anywhere in the world-cost effectively and in real time.

53

Today with the aid of Axedas DRM, the Hitachi M700 and U700 series, two of the first systems in the industry to meet the 300mm etch demand, use minimal valuable cleanroom space while providing optimum productivity for the fab. The Hitachi M700 series meets or exceeds all I300I and SELETE standards for FOUP or open cassette interfaces. Designed to meet all Poly, Trench, Dielectric, Metal, Nitride and Low K Etch needs in the 300mm arena, the Hitachi M700 and U700 series provide two etch and two ash chambers and utilize the proven dual blade robot and Windows NT based operating software from the M600. This user-friendly software makes programming and data retrieval fast and simple through the use of an intuitive graphic interface. The article also asserts that the use of its DRM will lead to rapid gains in competitive advantage through increased operating efficiency and profitability with simultaneous improvements in customer satisfaction and retention.

In light of this, a review of equation II = ROIcleaned = (Ce-Cz) * 100 /Icrm introduced in Chapter 1 suggests that with DRM utilizing AI the value of Ce (saved cost) for after sales services assuming Cz and Icrm remain the same. Hence, a higher ROI is realized when AI is applied to CRM.

54

4.4.5 Case Study: iPhrases OneStep as Intelligent CRM tool

Another example of AI application to customer service is that of iPhrases OneStep. In the companys sales literature, iPhrase claims that its revolutionary product OneStep is based on AI and equips website search engines with CRM capabilities. According to a news article by Steve Ulfelder titled Mellon Gets Closer to Clients (2004) iPhrase, OneStep has been most beneficial to e-retailers by enabling increases in revenue from online shoppers by calling attention to products they may not find on their own. As stated in the article, OneStep consists of a search server, integration hooks and management tools. iPhrase claims that the technologys core is an adaptive learning engine that interprets users' natural-language queries to bring answers rather than a list of links.

Mellon Financial Corp. spent the year 2002 evaluating search engines for its customerfacing Web site, its intranet and the sites that the financial services company develops for corporate clients. Edward Cymbalak, a vice president and product manager in Mellon's corporate e-commerce services group, indicated that they found OneStep as the best solution for Mellon. This was because Mellon is empowered by a centralized IT group that standardizes technology components which are then used across all business units. Today, iPhrases OneStep is the standard technology used for searching internal websites and any customer facing websites at Mellon. Cymbalak further stated that integrating iPhrase was very simple and that Mellon had deployed it in six Websites so far, with another three in progress. So far Mellon is finding that the solution is providing an increase in customer service efficiency by providing answers to customers and service personals in a more quickly and accurate fashion.

55

Also, in an article iPhrase Technologies Recognized for Online Excellence for CRMToday (2004), Gateway, the third-largest PC manufacturer in the U.S. launched iPhrase OneStep to improve online customer support through faster and easier searches. According to the article the use of iPhrase OneStep by Gateway was inspired by its commitment to customer satisfaction. The implementation helps Gateways customers find the products, services and support they need in one fast and easy step. As a result, Gateway enjoyed an enhanced capability in e-services that reduced the volume of inbound calls to the Gateway customer support center which led to a significant increase in ROI.

A review of equation II = ROIcleaned = (Ce-Cz) * 100 /Icrm introduced in Chapter 1, suggest that the use of OneStep as an AI enabled CRM tool increases the value of Ce (saved cost) assuming Cz and Icrm remain the same. Therefore, a higher ROI is achieved when AI is applied to CRM.

4.4.6 Case Study: Trajectas Virdix for Customer Segmentation

Trajecta Inc. a provider of Customer Profitability Management (CPM) solutions claims that their software, Virdix, uses an AI-based decision optimization solution to aid strategic profit-based decision-making. According to Trajecta, a success story can be drawn from the results observed at Federal Express Corporation (FedEx). Initially at FedEx, the world's largest express transportation company, an internal study revealed that

56

picking up customers packages from their site cost significantly more than servicing customers who dropped off packages at FedEx (TRAJECTA, 2001). According to Trajecta, Virdix helped FedEx to identify why some customers made pick-up requests, and helped devise a strategy to convert such customers to drop-off customers. The solution resulted in a step-by-step process initiated by customer survey followed by the creation of predictive models based on the survey. This was completed through a process of elimination where only customers who were likely to drop off were selected. This involved data analysis based on data mining algorithms of Neural Networks (Trajecta White paper, 2001). This identified the exact customers who were less

reluctant to change from being pick-up request customers to drop-off customers based on segments of customers with similar behavior and attributes. Trajecta claimed that the solution scored and profiled a third of FedEx customers within three weeks after receiving the survey data. The models recommendations turned out to be highly predictive. This outcome of the project resulted in double-digit growth of FedExs revenue/expense ratios as well as double-digit ROI for FedEx.

Also, from above an evaluation of equation II = ROIcleaned=(Ce-Cz) * 100 /Icrm of chapter it can be seen that Ce (saved cost) increases per AI introduction to knowledge management aspect of CRM assuming Cz and Icrm remain the same.

57

4.4.7 Case Study: Wards Systems NeuroShell

In chapter 2, as an assertion from Netg it was noted that organizations need to hire and develop dedicated employees if they were to truly realize the benefits of CRM. Hence, hiring the right people is a key decision employers must make for their company to be successful in CRM. In a news release titled Neural Networks Assist in Job Performance: Hiring the Best Candidates at a Lower Cost (2002), Neill M. Carson & Associates uses a variety of NeuroShell neural network configurations in its employee selection products. Carson's "Pro" Series, used by Southwest Bank of Texas, assists in the initial hiring and placement of candidates. Initially test data pertaining to psychology (such as general intelligence, office/clerical skills, and a personality questionnaire) is gathered. This is then followed by the classification of the networks i.e. matching candidates to known patterns of performance. According to the report, Carson trains the networks to identify early terminators, and candidates with strong customer service skills or other attributes based on the customers needs. In an example cited in the article, neural networks identify candidates who are most likely to receive a larger number of serious customer complaints. The use of classification networks and clustering helps categorize performance into four main groups, ranging from "stellar" to "doubtful".

According to Carson, "The beauty of neural networks, from a psychological perspective, is that they allow local norms and patterns in prediction rather than relying on studies done elsewhere that may or may not apply to the local circumstance." Neural networks yield much better results with "local" data validation and prediction studies that would be otherwise time consuming and less effective by traditional methods.

58

Champion Technology, a Houston based oil field supply company, is beginning to use these combined neural networks to select more productive technical sales personnel. The article describes how a Kohonen network was used to divide a sample sales force into four major patterns, two of which accounted for 80% of the most effective sales personnel. The first patterns yielded results with positive psychological attributes indication high scores in the "traditional" sales patterns of sociability, empathy, conformity, and warmth characterize high performance. However, the report revealed a surprise in the second pattern which appeared as a "mirror image" of the first: not especially sociable, low empathy, strong individualism, and aloofness with people. A second analysis of the results indicated that the second pattern exemplified more technically oriented sales people, who probably achieved their high performance by being strong technical resources to customers. The less suitable candidates appeared in the third pattern, which fell almost in the middle between these groups. Further analysis suggested that the result of the third pattern could be considered the typical set of candidates that will be hired if an organization was to use traditional methods in its hiring process.

In the case study, it can be inferred that by improving the hiring process of customer serving employees in a manner that results in better suited customer facing employees then customer service effectively can be improved in terms of time and customer satisfaction. Therefore an evaluation of equation II = ROIcleaned=(Ce-Cz) * 100 /Icrm of chapter 1 indicates cost savings i.e. increased Ce (saved cost) when we use AI enabled hiring for CRM capabilities assuming Cz and Icrm remain the same.

59

4.4.8 Case Study: AdaptiveInfos Adaptive News Browser

In the world of wireless Web, AdaptiveInfo proclaims a leadership position in providing state-of-the-art AI based personalization solutions for wireless business and consumer applications. The wireless web has the potential to empower users with access to any information at any time. However, this vision is severely limited by handheld devices with small screens and slow network connections. AdaptiveInfo assets that its software learns to prioritize information for each individual user, resulting in an intuitive and rewarding mobile experience. Applications of AdaptiveInfo's technology include personalized delivery of news, classified ads, restaurant listings, and catalogs of downloadable applications. The ability to learn preferences and personalize information delivery increases information usage on mobile devices by over 40%. According to AdaptiveInfo, its adaptive news browser communicates with an Adaptive Information Server to provide browser functionality, such as adaptive content personalization, news search and off-peak download capabilities. In an article of ComputerWorld Mobile AI , Matt Hamblen (2001) writes about how AdaptiveInfo provided wireless users of the Los Angeles Times Web site with personalization features, said Daniel Billsus, chief technology officer at AdaptiveInfo.com. As explained in the article, Daniel Billsus, chief technology officer at AdaptiveInfo the service for the Los Angeles Times, as service that allow wireless users log on for content, their preferences for certain article subjects are constantly noted and future menus of story choices are adapted to their previous choices. Billsus also stated an example that if a user picks horse-racing stories from the sports page, he will get horse-

60

racing stories pushed to him in the future. But there will always be a sampling of stories about other subjects, such as basketball or other sports, as well. Billsus also stated that users would always be able to find articles that editors deemed extremely important despite being outside of their preferences.

According to AdaptiveInfo, usage data showed that when stories are presented in "adaptive" order based on preferences, there is a 43% higher probability that the articles will be read. The Los Angeles Times system also requires no effort on the part of users, who are often required by other wireless Web sites to register on a wired connection and list preferences in a long survey, he said.

The implication of the above case study is that the AdaptiveInfos Adaptive News Browser technology enables consumers to save time and money by downloading content automatically, taking advantage of off-peak minutes. Also, it increases the effectiveness of the content provider such as LA Times in delivery content. As a result the case study supports the equation II = ROIcleaned=(Ce-Cz) * 100 /Icrm of chapter 1 i.e. the use of AI in CRM increases ROI through increased Ce (saved cost) assuming Cz and Icrm remain the same.

61

Chapter 5 Conclusion

5.1 Recommendations

The previous chapter has shown that the application of AI to business is having a positive effect on ROI. The general recommendation is that vendors and practitioners should incorporate similar techniques used in various AI applications in business for use in CRM. One of the strongest cases for AI is the ability to detect data patterns from customer information repository that would not be detectable with leaner solutions currently being used. The application of AI techniques and algorithms used in Virdix and Adaptive News Browser could be used in aiding double digit increase of ROI and up to 40% increases in effectiveness in the areas of customer profiling and market segmentation respectively. Also, ROI in CRM could be increased by the use of NeuroShells employee hiring screening technology if used in screening potential customer facing employees. Furthermore, customer satisfaction and experience can be

boosted by the use of iPhases OneStep AI software to enable quick, easy and more natural searches that yield desirable products and services by e-customers. This type of convenience and timeliness of service will also help improve customer retention rate as customers begin to find products and services that meet their needs quickly. In addition, ROI of CRM can be increased by incorporating features of the BrainMaker software so as to enable about 40%-50% increase in direct mail marketing effectiveness as experienced by Microsoft. Also CRM powered marketing campaigns timeliness and effectiveness

62

could be improved with better cross-selling capabilities through the use of AI enhanced CRM in a similar fashion to that of Obert used by BUPA. Technologies such as that of the eServicePerformer can be used to improve the timeliness of reviewing and filtering eservice information requests at 40% time reduction as experienced by Toronto Dominion Bank. This could possibly be extended to automatically filter and process data in large customer databases while simultaneously creating information for use in customer services.

However in order to be truly valuable, AI enabled CRM would need to extend beyond current research efforts in e-business. AI would need e-commerce and encompass

upcoming Third Generation or 3G mobile technology. A new idea may be to extend the use of AI applications with CRM to the m-commerce arena in order to enable CRM readiness for the 3G revolution. Artificial intelligent features of Adaptive News Browser and DRM technologies could be borrowed and applied to the m-commerce to aid sale of goods and services on the fly per the customers location. Another recommendation is a new approach to the way organizations perceives how to develop and manage relationships through 3G powered CRM or 3G-mCRM. The new type of customer relationship could be managed using an integration of AI into CRM applied to both traditional e-commerce and 3G powered m-commerce. Furthermore, this new perception would imply that organizations begin to view the customer in non-traditional ways i.e. as a mobile-customer or m-customer whose needs and desires may need to be served onthe-fly. The customer is seen not just as one who makes products and service demands from a store or through the Internet but also at anytime while on the go. 3G-mCRM

63

technology would enable customer relation management through traditional online services, one-to-one service as well as on-the-fly.

A practical example is on-the-fly mobile-marketing of traditional and online casinos as well as other local product and services. This type of service and products can be presented to a customer within the Las Vegas strips GPS coordinates. Similar artificial intelligent technology can be applied in various industries including banking, hospitality, entertainment, health and taxicab services with information dynamically presented to a customer in an unfamiliar city. Perhaps modified versions of OneStep intelligent

searching and AdaptiveInfos New Browser software to include GPS coordinate recognition could make this a reality. These types of technology driven services would be beneficial by providing an additional avenue for revenue generation and creating choice and awareness for the organization and the customer respectively. The end result would be a wallet-share increase as customers start having more avenues to spend more on the companys goods and services. Also, it improves the possibility of higher retention rate as customer become more loyal. Furthermore, traditional knowledge management could be enhanced with specific mobile customer information like such that adds location to time and can be used to substantiate different sets of new customer segments. The

information gathered may also be used in conjunction with the existing customer information repository. These enhancements should organizations to better identify ways to offer products through target market segmentation up-selling and cross-selling.

64

5.2 Thesis Conclusion

The case studies considered in this paper reveals that AI is enhancing different aspect of information technology in business particularly in areas (marketing, Service, Sales and knowledge) hat apply to CRM. Therefore, it can be concluded that this thesis strongly supports the hypothesis I to be true per SAP ROI equation II. The logical conclusion for CRM vendors and practitioners is that they need to focus their effort in the development of next generation CRM software with AI capabilities. Likewise, sales, marketing, and service managers and executives of organizations hoping to employ CRM should consider whether to wait for CRM software AI features currently been developed or adopt traditional CRM software. The difference in the traditional and AI based CRM Software might become a differentiator for gaining a competitive advantage.

5.3 Summary
The general objective of the study was to give an insight into how the technology aspect of CRM can be enhanced with AI to bring about higher Return on investment or ROI. Also, the papers intentions were to evaluate the possible uses of AI enabled CRM and its incorporation into upcoming m-commerce. More specifically, the paper intended to prove the hypothesis that the use of artificial intelligence in CRM solutions could positively affect CRM ROI. The paper revealed that generally, the development of customer relationships in any organization begins with setting organizational goals. Also, an organization must realize that there are two sets of customers, the employees and traditional customers. A company must ensure its employees are dedicated to servicing customers by providing them with relevant training, encouraging and rewarding them for 65

outstanding performances. The next step after employing dedicated employees is to become a market intelligent enterprise. In becoming market intelligent, the organization would need to strategize its marketing to be able to acquire the most profitable customers. This stage gives a lot of room for the integration of AI. This is made possible by the fact that market data can be analysed for patterns of customer behaviour in a manner consistent with AI pattern recognition. However, the MIE stage is an identified goal to be achieved by CRM. Therefore, incorporating AI to achieve MIE should fall under the development of CRM with MIE capabilities. However, the issue of being able to have AI capabilities and advantages with CRM is totally at the discretion of the CRM software vendors.

Finally, the finding of the thesis was that the result based on the examples and scenarios discussed strongly support the hypothesis i.e. AI in business software increases ROI. This is true because as discussed in section 6.6, it can be seen that there exists a number of methods in which AI appears to reduce costs in marketing, sales and knowledge management. This suggests AI would be the next logical feature of CRM Systems that could better aid organizational efficiency in achieving higher profits and increased customer retention rates. However, to be truly effective, AI application in CRM would need to encompass both e-commerce and m-commerce. Therefore, businesses, CRM vendors and

practitioners should work together to make the application of AI in CRM a reality not only in current e-commerce but also in upcoming 3G enabled m-commerce.

66

5.4 Scope for future Research

The research on AI application to CRM could be extended beyond the limitation of the paper i.e. online CRM forums, news articles, press releases and vendor white papers all used as data collected for case studies exemplifying AI applications in businesses. The new research could extend to include ongoing CRM vendor AI research and academic studies of the underlying technologies used by vendors AI case studies. However, this may also be limited due to copyright protection and intellectual secrecy as vendors often refuse to share information about their intellectual property. However, a look at first generation mobile technology may prompt some research topics around the following: How much customer information can be extracted from existing mobile devices, compared to traditional e-commerce? How easily can AI be applied to CRM in the m-commerce sector?

An area for future research interest could focus on the suitability of these 3G mcommerce for offering products and services through wireless devices. Perhaps this would give room to voice recognition technology with the aid of AIs pattern recognition algorithms. Another topic to consider here are the current challenges of Customer

Relationship Management practitioners in devising an effective means to measure ROI in 3G based wireless CRM solutions.

Finally, another area of interest is concerned with accounting for the value of relationships developed or sustained over a period of time i.e. how is and could a

67

monetary value placed on the number of relationships developed or sustained and how would accountants account for a Return on Investment? A research topic may be based on the question of what role AI has to play in the process of developing customer relationships. Organizations are investing large sums of money in CRM software due to the belief that it helps achieve higher profit margin from sustained customer loyalty.

5.5 Originality

The originality of the thesis stems from recommending a radical approach to perceive and use CRM in general. The thesis suggests that AI technology should not only be

applicable to traditional e-commerce based CRM, but also extend to m-commerce as a new concept of 3G-mCRM particularly how organizations view the customers as mobilecustomers who desire products and services through their GPS enabled cell-phones. Likewise availability of information for assisting field sales individuals should be available on-the-fly. This implies corporate managers and directors wishing to adopt CRM technologies with AI need to be aware that success would depend on how extensible such a solution could be for the eventual m-commerce era.

5.6 Contribution to Body of Knowledge

The thesis has identified new entities and dynamics for the future market place which would be enabled by the introduction of 3G mobile technology. The customer will no longer be regarded as an e-customer of the Internet revolution but as an m-customer of the 3GSM revolution. Likewise, CRM need not be beneficial to just organizations in the

68

e-commerce domain alone but also in the domain of m-commerce as mCRM. Furthermore, AI research and development currently underway for e-commerce should encompass the evolving market place from e-commerce to m-commerce. One implication of m-commerce shall possibly be a rethink of CRM implementation processes of today.

Another implication of 3G m-commerce may also prompt changes by executive and senior managers in business models, marketing strategies, operation and competitive strategies for many organizations. Therefore, organizations seeking to implement CRM with AI shall have to consider the timing of their CRM adoption with that of the eventual evolutionary change from e-commerce to m-commerce. For instance, it may not be in

the best interest of an organization to begin adopting a CRM system that is about to become obsolete as business moves to m-commerce. This may become a little easier to understand by realizing that the customers preferred means of communication, interaction, delivery of products and services could be changed by 3G powered mcommerce.

For large organizations that already have significant CRM investments, sales and marketing managers and executives implementing mCRM may be a more gradual process that would depend on mCRM availability from vendors. Senior managers and executives in small to medium sized enterprises (SMEs) who primarily use Application Service Providers or ASPs such as salsforce.com and netsuite.com, mCRM reality depends on how soon it would be offered by ASPs.

69

References and Bibliography

Anderson, K.L. & Carol, J. (2001) Customer Relationship Management. New York, McGraw-Hill Trade. Axeda (2002) Hitachi High-Technologies - Kasado Works Licenses Axeda DRM [Internet], Axeda. Available from:<http://www.axeda.com/news/press-releases/hht.html> [Accessed June 17th,2004] Axeda (2002) Device Relationship Management for Enterprise Technology Leaders, Axeda White paper. Bickert, J. (1997) Cohorts II: a new approach to market segmentation Journal of Consumer Marketing [Internet] 14(4-5 (Fall-Winter)) pp. 362-380. Available from: <http://www.emeraldinsight.com/jcm.htm> [Accessed June 10th,2004] Birkhead, B. Behavioral Segmentation Systems: A Perspective [Internet], Macon Consulting Ltd. Available from: <http://www.crm-forum.com/library/macon/macon002/brandframe.html> [Accessed May 11th,2004] Brown, L. & Gravely, J. (2003) Special Edition Using Microsoft CRM, Book and CDROM ed., Indianapolis, Que. California Scientific Maximize Returns on Direct Mail with BrainMaker Neural Network Software [Internet], California Scientific. Available from: <http://www.calsci.com/Applications.html#Business%20Applications> [Accessed August 18th, 2004] Chablo, E. The Importance of Marketing Data Intelligence in Delivering Successful CRM [Internet], smartFOCUS ltd. Available from: <http://www.crmforum.com/library/ven/ven-017/ven-017_clean.htm> [Accessed September 10th, 2004]

70

CRMToday (May 2004) iPhrase Technologies Recognized for Online Excellence [Internet], CRMToday. Available from: <http://www.crm2day.com/news/crm/EpluZAZplyxoWeQona.php> [Accessed June 17th, 2004] Davenport, T.H. (2001) CRM Overview [Internet], ITToolbox. Available from:
<http://www.ittoolbox.com/help/crmoverview.asp#r2> [Accessed May 22nd, 2004]

Dewan, R., Jing, B., & Seidmann, A. (1999). One-to-one marketing on the Internet [Internet], AIS. Available from: <http://aisel.isworld.org/pdf.asp?Spath=/icis/1999/crp9908.pdf> Gentle, M. (2002) The CRM Project Management Handbook: Building Realistic Expectations and Managing Risk, Kogan Page Ltd. Gerald B., King N. & Natchek D. (2001) Oracle E-Business Suite Manufacturing & Supply Chain Management, Berkeley, McGraw-Hill Osborne Media. Goldenberg, B. J. (2002) CRM Automation, Upper Saddle River, Prentice Hall. Gunden, T.V. (2002) Customer Push Becomes ERP Shove [Internet], Integrated Solutions <http://www.integratedsolutionsmag.com/articles/2002_05/020509.htm> Haag S. (2001) Management Information Systems for the Information Age, 3rd ed., McGraw. Hamblen, M. (2001) Mobile AI [Internet], ComputerWorld. Available from: <http://www.computerworld.com/softwaretopics/software/story/0,10801,61539,00.htm> Henderson, P. (2002) How DRM Delivers Customer Satisfaction and Strategic ROI within Service and Support Operationsand Beyond, Axeda White paper.

71

Hill, K. (2002) The CRM Robots Are Coming [Internet], CRM Daily. Available from: <http://crm-daily.newsfactor.com/perl/story/18534.html> [Accessed April 2nd, 2004] Hymas, J. (2001) On Line Marketing: Segmentation and Targeted Customer Strategies for the Web [internet], Macon Consulting Ltd. Available from: <http://www.crmforum.com/library/macon/macon-008/brandframe.html> [Accessed July 3rd, 2004] James D., Russell S. & Seibert G. H. (2001) Oracle E-Business Suite Financials Handbook, 2nd ed., McGraw-Hill Osborne Media. Jiang, p. (2000) Segment-based mass customization: an exploration of a new conceptual marketing framework. Internet Research 10(3) pp. 215-226. Keller, G. & Teufel, T. (1998) SAP(R) R/3(R) Process Oriented Implementation: Iterative Process Prototyping, Addison-Wesley Pub Co. Kotler, P. (2002) Marketing Management, 11th ed., Prentice Hall. KPMG Consulting (2002) Customer Relationship Management: Delivering Value Through Sales, Marketing and Services [Internet], KPMG Consulting. Available from: <http://www.kpmgconsulting.com/library/pdfs/c2103_CRMWP.pdf> [Accessed April 19th, 2004] Meltzer, M. (2002) Segment your Customers Based on Profitability [Internet], Montgomery, A. L. (2000) Applying Quantitative Marketing Techniques to the Internet. Interfaces 30 (2) March-April, pp. 1-32. Available from: <http://pubsonline.informs.org/feature/pdfs/0092.2102.01.3102.90.pdf> [Accessed June 24th, 2004]

72

Pastore, M. (2000) Need for Customer Interaction to Lead CRM Industry [Internet], Click Z Network. Available from: <http://www.clickz.com/stats/big_picture/applications/article.php/541121> Quinn J. B. (1992) Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry, Free Press. Ramaswamy, P. B. & Katzenbach, J. R. (2002) Harvard Business Review on Customer Relationship Management, Boston, Harvard Business School Press. Rick, T. (2002) The Customer Revolution [Internet], PowerHomeBiz. Available from: <http://www.powerhomebiz.com/vol52/revolution.htm> [Accessed June 15th, 2004] SAP Info (2003) ROI calculations for CRM projects: [Internet], SAP. Available from: <http://www.sap.info/index.php4?ACTION=noframe&url=http://www.sap.info/public/en /article.php4/Article-289183f16b8b8c838a/en> [Accessed August 25th, 2004] Schoeller A. (2002) Customer Behavior Intelligence Suite [Internet], The Yankee Group. Available from: <http://www.crm2day.com/news/crm/EpllZyEZZpMyJDcjfT.php> [Accessed June 14th, 2004] Seybold P. B. (1998) The Customer Revolution, Addison-Wesley Pub Co. Sloman, A. & Logan, B. (1999) Building cognitively rich agents using the SIM_agent toolkit Association for Computing Machinery. Association for Computing Machinery, 42 (3) Mars, pp. 8. Stergiou C. & Siganos D. (1997) Neural Networks [Internet], Imperial College London. Available from: <http://www.doc.ic.ac.uk/~nd/surprise_96/journal/vol4/cs11/report.html> [Accessed June 12th, 2004]

73

Thompson B. (2003) Case study - Eservice strategy for success in the Information Age [Internet], CRMGuru.com. Available from: <http://www.crmguru.com> [Accessed May 19th, 2004] Ulfelderm, S. (2004) Mellon Gets Closer to Clients Through Search [Internet], ComputerWorld. Available from: <http://www.computerworld.com/softwaretopics/software/story/0,10801,95824,00.html?f rom=story%5Fkc> [Accessed August 30th, 2004] Wards Systems press release, Neural Networks Assist in Job Performance: Hiring the Best Candidates at a Lower Cost [Internet], Wards Systems. Available from: <http://www.wardsystems.com/news.asp?12> [Accessed August 29th, 2004]

74

Appendix A Graphical representation of the different Flavors of CRM Systems

75

76

Courtesy of Hewson Consulting Group

77

Appendix B Graphical representation of Oracle E-Business Suite

78

Courtesy of

David James, Simon Russell, Graham Seibert Oracle E-Business Suite Financials Handbook, Oracle Press.

79

Appendix C Picture of a Glowing Biological Neuron

80

(Nathan Botts ,1999) courtesy of San Diego State University.

81

Appendix D Representation of Artificial Neural Network

82

(Nathan Botts,1999) courtesy of San Diego State University.

83