According to Sue and Moran (as cited in Raman et al., 2006), CRM can be defined as a “Technology – enabled business management tool for developing and leveraging customer knowledge to nurture, maintain and strengthen profitable relationships” (2001, pp. 2). Broadly speaking business CRM software can be viewed as serving both an Operational and Analytical purpose.
The operational perspective focuses on how CRM can heighten customer support services, marketing functions and automate business transactions. The aspirational goals of adopting CRM within this area is to ultimately aid business functionality across these intertwined yet often complex business operations. In addition, conceptualizing customer value while lowering operating costs remain centric operational drivers in adopting CRM software.
Analytically, CRM software holds tremendous potential in aiding business decisions. Understanding and realising opportunities across the vast compiling and profiling of customer data sets would require significant human effort. CRM software however can efficiently aggregate all this information precisely and more importantly make it interpretable for employees. From this analysis of performance and possible inefficiencies can be unearthed across multiple business operations and value generating decisions made accordingly. Academically the strength in CRM has been widely recognised in its innovative potential to drastically enhance employee task efficiency and manage customer interactions (Li and Mao, 2012; Kim et al., 2015). However, for these capabilities of CRM to be truly realised a firm must strategically combine all physical, Informational, and organizational resources. Without appreciating the multiple facets of each a firm will never successfully implement CRM.
Successful CRM implementation is recognised as profitably delivering markets offerings to customers that “Provide value to customers at lower cost versus competitors, provide greater value at the same relative cost versus competition and provide more value at lower cost versus competition” (Raman et al., 2006, pp.40).The rewards are clearly advantageous for firms who can effectively implement CRM software. To achieve this though is easier said than done.
The content below will objectively demonstrate the lens academia have adopted in explaining efficient CRM implementation.Organizational Learning Capacity (OLC) Organizational capability learning holds a great premise over successful CRM implementation. Within the firm itself an infrastructure must exist that promotes and supports learning in harnessing and further developing positive relationships with customers.
This holds as a key success factor for proficient CRM implementation (Stein and Smith, 2009). According to (Garrido-Moreno and Padilla-Meléndez, 2011), “The shift from product-based approach to the greater profitable long-term customer relationship approach” means that learning about customers through every touch point has become increasingly crucial. Literature emphasizes that an ardent strategy of seeking new ways of achieving results, shared interpretations and rapid diffusion of information is paramount to promote sufficient OLC (Baker and Sinkula, 1999; Herhousen and Schogel, 2013). For this to materialize an adaptive OLC culture must exist which integrates all organization functions and stakeholders across all levels.
Another academic (Peltier et al.,2013) argues that OLC’s goal should be to transform all customer interactions and information into “knowledge”. This knowledge should then they believe be communicated across all organizational touchpoints. Subsequently only then can a firm begin to appreciate the cost saving measures CRM offers. Conversely, scholars do agree that implementing CRM software to analyse and apply customer information into greater value processes isn’t enough. Quite frankly this doesn’t always equate to enhanced loyalty or mutually advantageous customer relationships. Nonetheless, empirical evidence has shown that OLC is positively related in empowering CRM to create business efficiencies, customer value and loyalty. Empirical findings from (Akgün et al.
, 2014) demonstrated that OLC has a positive relationship with CRM. The sample was drawn from organizations operating with the banking sector in Turkey. The results showed a significant positive correlation between CRM and OLC. Of this the results indicated “CRM orientation is positively related to openness and experimentation culture””Tech based CRM is positively related with managerial commitment and knowledge sharing and integration”(Akgün et al., 2014, pp.537)The research concluded putting forward the argument of the complimentary nature between OLC and CRM implementation.
It stressed that the pair work in tandem in enabling customer knowledge gathered to be converted into mutually beneficial long-term customer relationships. This along with firm infrastructure that promotes a learning culture between employees and stakeholders is instrumental in CRM software being utilized. Comparatively (Raman et al., 2006) identifies OLC as a major variable in CRM implementation.
The paper mentions how OLC can enable the transformation of CRM from a technological tool to an advantage producing resource. It vocalizes that the learning orientation within the organization is critical. This transcends into how willingly employees are in continuously comprehending its business environment, acquiring new skills and use information. Alike to (Akgün et al., 2014) it remarked that CRM’s ability to accomplish goals is