electronic customer relationship management … · customer relationship management ... ecrm...

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Introduction Customer relationship management (CRM) is about identifying a company’s best customers and maximising the value from them by satisfying and retaining them. As a business philosophy CRM is seen to be firmly rooted in the concept of rela- tionship marketing, which is aimed at improving long-run profitability by shifting from transaction based marketing to customer retention through effective management of customer relationships (Christopher et al., ). Recently it has been acknowledged that company relationships with customers can be greatly improved by employing information technology (Karimi et al., ; Ryals and Payne, ) which can facilitate and enhance customer relationships in various ways but mainly enables companies to attain customisation, which is the essence of a customer-centric organisation (Stefanou et al., ). In this context CRM has emerged as the ideal vehicle for implementing relationship marketing within companies, with some practitioners sug- gesting that CRM provides a platform for the operational manifestation of relationship market- ing (Plakoyiannaki and Tzokas, ). For many organisations the most obvious way to implement CRM is through the use of software applications in the form of electronic customer relationship management (eCRM) technology. This type of CRM software provides the function- ality that enables a firm to make the customer the focal point of all organisational decisions (Nemati et al., ) and innovations in such technology and the Internet are just some of several factors that now make relationships through one-to-one initiatives a reality (Chen and Popovich, ). The Internet has allowed new patterns of interme- diation to emerge, allowing firms to adopt CRM to focus on effective customer relationship man- agement as well as harnessing the application of on-line technologies to facilitate customer supplier relationships (Wright et al., ). The objective of this paper is to present a coherent view of eCRM technologies. It promotes the value of eCRM by exploring the opportunities created for companies and the net benefits they have realised in practice such as enhanced customer interactions and relationships, possibilities for per- sonalisation and the creation of a competitive advantage in the marketplace. The discussion also acknowledges the formidable challenges which eCRM adoption and implementation pose for companies in the areas of customer relationships, managing on-line channels and data integration issues. Exploring eCRM eCRM describes the broad range of technologies used to support a company’s CRM strategy. It can be seen to arise from the consolidation of tradi- tional CRM with the e-business applications mar- ketplace. Bradway and Purchia () see eCRM as the intersection between two important indus- ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT (eCRM): OPPORTUNITIES AND CHALLENGES IN A DIGITAL WORLD Electronic customer relationship management (eCRM) is seen to arise from the consolidation of traditional CRM with the e-business applications marketplace and has created a flurry of activity among companies. eCRM is the proverbial double-edged sword, presenting both opportunities and challenges for companies considering its adoption and implementation. This paper explores the marketing opportunities eCRM creates for companies such as enhanced customer interactions and relationships as well as personalisation options, all of which are potential sources of competitive advantage. It also explores the challenges confronting companies implementing eCRM such as managing an on-line channel, data integration issues and information technology (IT) architecture challenges. Directions for future research are also suggested. Aileen Kennedy

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Page 1: ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT … · Customer relationship management ... eCRM adoption and implementation pose for ... December the largest bank in Italy, Banca

IntroductionCustomer relationship management (CRM) isabout identifying a company’s best customers andmaximising the value from them by satisfying andretaining them. As a business philosophy CRM isseen to be firmly rooted in the concept of rela-tionship marketing, which is aimed at improvinglong-run profitability by shifting from transactionbased marketing to customer retention througheffective management of customer relationships(Christopher et al., ). Recently it has beenacknowledged that company relationships withcustomers can be greatly improved by employinginformation technology (Karimi et al., ; Ryalsand Payne, ) which can facilitate and enhancecustomer relationships in various ways but mainlyenables companies to attain customisation, whichis the essence of a customer-centric organisation(Stefanou et al., ).

In this context CRM has emerged as the idealvehicle for implementing relationship marketingwithin companies, with some practitioners sug-gesting that CRM provides a platform for theoperational manifestation of relationship market-ing (Plakoyiannaki and Tzokas, ). For manyorganisations the most obvious way to implementCRM is through the use of software applicationsin the form of electronic customer relationshipmanagement (eCRM) technology.

This type of CRM software provides the function-ality that enables a firm to make the customer the

focal point of all organisational decisions (Nematiet al., ) and innovations in such technologyand the Internet are just some of several factorsthat now make relationships through one-to-oneinitiatives a reality (Chen and Popovich, ).The Internet has allowed new patterns of interme-diation to emerge, allowing firms to adopt CRMto focus on effective customer relationship man-agement as well as harnessing the application ofon-line technologies to facilitate customer supplierrelationships (Wright et al., ).

The objective of this paper is to present a coherentview of eCRM technologies. It promotes the valueof eCRM by exploring the opportunities createdfor companies and the net benefits they haverealised in practice such as enhanced customerinteractions and relationships, possibilities for per-sonalisation and the creation of a competitiveadvantage in the marketplace. The discussion alsoacknowledges the formidable challenges whicheCRM adoption and implementation pose forcompanies in the areas of customer relationships,managing on-line channels and data integrationissues.

Exploring eCRM eCRM describes the broad range of technologiesused to support a company’s CRM strategy. It canbe seen to arise from the consolidation of tradi-tional CRM with the e-business applications mar-ketplace. Bradway and Purchia () see eCRMas the intersection between two important indus-

ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT(eCRM): OPPORTUNITIES ANDCHALLENGES IN A DIGITAL WORLD

Electronic customer relationship management (eCRM) is seen to arise fromthe consolidation of traditional CRM with the e-business applications marketplace and has created a flurry of activity among companies. eCRM isthe proverbial double-edged sword, presenting both opportunities and challenges for companies considering its adoption and implementation. Thispaper explores the marketing opportunities eCRM creates for companiessuch as enhanced customer interactions and relationships as well as personalisation options, all of which are potential sources of competitiveadvantage. It also explores the challenges confronting companies implementing eCRM such as managing an on-line channel, data integrationissues and information technology (IT) architecture challenges. Directions forfuture research are also suggested.

Aileen Kennedy

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try initiatives, the booming Internet market andthe shifting focus to customer-centric strategies.

eCRM is sometimes referred to as web-enabled orweb-based CRM and emerging from this vieweCRM has been defined by Forrester Research() as ‘a web centric approach to synchronisingcustomer relationships across communicationchannels, business functions and audiences’. Lee-Kelley et al. (, p. ) highlight the relative lackof literature in this domain and suggest as a work-ing definition that eCRM refers to ‘the marketingactivities, tools and techniques delivered via theInternet which includes email, world wide web,chat rooms, e-forums, etc., with a specific aim tolocate, build and improve long term customer rela-tionships to enhance their individual potential’.

Typically electronic and interactive media such asthe Internet and email are seen as playing the mostsignificant role in operationalising CRM as theysupport effective customised information betweenthe organisation and customers. However, eCRMcan also include other e-technologies and new e-channels including mobile telephony, customercall and contact centres and voice response sys-tems. The use of these technologies and channelsmeans that companies are managing customerinteractions with either no human contact at all,or involving reduced levels of human intermedia-tion on the supplier side (Anon, ).

The emergence of mobile commerce has led tothe introduction of new products, new ways ofselling products to customers and new learningcurves for companies in terms of how to manageinteractions with customers (Wright et al., ).For example, financial organisations acrossEurope are now beginning to take advantage ofmobile marketing services and in particularmobile banking, based on wireless applicationprotocol (WAP) technology, as a powerful newmarketing tool to build long lasting and mutuallyrewarding relationships with new and existingcustomers (Rilvari, ). Most major banks areusing mobile CRM in some form as a new chan-nel for customer acquisition, as SMS text messag-ing is still in a growth mode in new market seg-ments, and also to project a new image for thecompany. Mobile operators such as Vodafone andhealth care providers such as VHI have also usedSMS text messaging to enhance customer rela-

tionships. Mobile channels, especially SMS, areseen as immediate, automated, reliable, personaland customised options providing an efficientway to reach customers directly (Sinisalo et al.,) and to manage customer relationships. InDecember the largest bank in Italy, BancaIntesa, announced it would introduce a compre-hensive mobile banking service. Alongside SMSand WAP functions, multimedia messaging is alsoavailable for banking transactions for the firsttime in the world. The service is initially availableto the bank’s , on-line banking customers(Rilvari, ). Other sectors exploring mobileCRM include retailing. This implies that eCRMusing mobile marketing may indeed offer aneffective way to reach, and build relationshipswith, demanding customers in rapidly changingmarkets (Sinisalo et al., ).

Another e-technology offering companies opportu-nities for managing customer interactions is voiceresponse systems. In eircom, Ireland’s largesttelecommunications company and former incum-bent, introduced the user friendly eircom VoiceRecognition (e-VR) ‘’ system which uses thelatest voice recognition technology, giving over onemillion eircom customers instant access to fault,billing, account and payment enquiries. The systemhandles over , calls per week. This has meantthat many services are now available /, whichincreases customers’ choice of when they can con-duct business with eircom. The specific goals of theproject included driving costs out of the call centre,increasing customer service quality and also differen-tiating the eircom brand in a fiercely competitivemarketplace. This introduction demonstrates inno-vation in the management of business informationand knowledge within eircom and has shown thepositive impact that speech technology can have onbusiness efficiency and customer service.

Since the on-line world and e-technologies havebecome such an integral part of day-to-day busi-ness and as they appeal to such a mass global uni-verse of consumers, businesses are constantlysearching for innovative yet cost-effective ways toreach remote customers, moving eCRM from a‘nice to have’ methodology to a ‘must have’ meth-

Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World

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Kainos, ‘Kainos/eircom’, www.kainos.com.

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odology (Parekh, ). This paper now exploresthe opportunities and challenges facing companiesengaging with eCRM technologies.

eCRM – OpportunitieseCRM is not here to change marketing but toenhance it by presenting opportunities to companiesto improve their effectiveness and to deliver customervalue (Scullin et al., ). It can reduce the costsinvolved in communicating to customers, optimisework flows as a result of integration with other enter-prise systems, facilitate better market segmentationand enable enhanced customer interactions, relation-ship and personalisation opportunities (Adebanjo,). The goal of eCRM systems is to improve cus-tomer service, retain valuable customers and to aid inproviding analytical capabilities (Fjermestad andRomano, ) within an organisation.

CRM applications take full advantage of technol-ogy innovations with their ability to collect andanalyse data on customer patterns, interpret cus-tomer behaviour, develop predictive models,respond with timely and effective customisedcommunications and deliver product and servicevalue to individual customers. Using technologyto optimise interactions with customers’ compa-nies can create a -degree view of customers tolearn from past interactions to optimise futureones (Chen and Popovich, ). It is also theinfrastructure that enables the delineation of, andincreases in, customer value and the correct meansby which to motivate valuable customers to stayloyal (Fjermestad and Romano, ).

Industries that tend to be more eCRM ready areaware of distinct contact with customers, are verycompetitive and are constantly seeking differentia-tion (Ragins and Greco, ). eCRM can be usedas an approach to relationship management withmultiple stakeholders including customers,employees, channel partners and suppliers. Specificopportunities of eCRM highlighted here includeenhanced customer interactions and relationships,managing customer touch points, personalisationoptions and leveraging eCRM capabilities as apotential source of competitive advantage.

Enhanced Customer Interactions and RelationshipsKalakota and Robinson () suggest that eCRMinvolves three phases, all of which are designed to

manage the customer life cycle and maximise cus-tomer lifetime value: acquiring new customers;enhancing the profitability of existing customersand retaining profitable customers for life. All ofthese phases are dependent on the quality of cus-tomer information and insight available to theorganisation. By collecting information on-linethe company has data that is already in a formatto be pulled into its analytical processes withoutthe steps of data entry necessary when collectinginformation through traditional channels. Stream-lining of the data collection process enhancesinformation quality and timeliness. The companycan also capture more information through theon-line channel leading to better use of decisionanalytics to predict customer behavior, resulting inmore targeted and customised relationship strate-gies. Through CRM the value of the relationshipescalates for both parties: customers receive prod-ucts and services more closely related to theirneeds and lifestyles and the organisation cultivatesa base of high-value, low-risk customers.

Compaq is a good illustration of a company max-imising efficiency through eCRM technologyapplications. Recognising it could learn from itsrival Dell, Compaq responded to the challenge ofeCRM by developing and employing electronicchannels to fulfil customer orders through itsreseller partners. Within the call centre agentsnow have a ‘Centre Web’ button on the screenwhich allows them to send a caller’s informationdirectly to a reseller’s own website. Within six sec-onds a transfer of data has taken place with thereseller partner receiving a data set on the newlead. Partners can track the volume of leads theyacquire and how well they are performing againstcustomer requirements. The overall goal is toimprove customer satisfaction (O’Rourke, ).

The core of the knowledge base in CRM systemsconsists of individual information items anddynamic knowledge bases which when properlydesigned and implemented can remove many ofthe administrative demands within organisationsand present better information to customers at alower cost (Ahn et al., ). Well defined seg-mentation will also lead to cost effective market-ing efforts and increased profits. Coupled withother technology at the back end such as customerdatabases, warehousing and data mining, valueadding and personalised products or services can

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be offered which in turn create an edge over com-peting companies (Ab Hamid, ).

The approach to well defined segmentation facili-tated by eCRM technology can be seen in the caseof KPN Mobile N.V., a leading European mobiletelecommunications network operator andprovider of mobile voice and data services withover million customers. As a result of high cus-tomer churn and low sales within the saturatedmobile market, KPN turned its attention to itshigh-value customers and launched a CRMImplementation for Very Important Customers(CIVIC) programme. These customers were pri-oritised when calling the contact centre androuted immediately to a dedicated CIVIC teammember. All details of the customer’s history areshown on the agent’s monitor including contactdetails, mobile call and service behaviour as well asongoing campaigns and individual privileges to beoffered. As a result of this initiative customer satis-faction ratings reached % and more and morecontracts were being renewed. Success of the pro-gramme at KPN is measured using the followingkey performance indicators: reduction of cus-tomer churn, increased customer lifetime valueand reduction of operational costs.

Another company which has recently adoptedeCRM technology is the engineering division ofESB International (ESBIEFM). The companyrecognised that it required a better understandingof customers and their expectations in order tofocus the organisation’s resources where they aremost required. The business requirement for read-ily available real-time accurate information wasidentified as a priority. It was recognised andacknowledged that customer information and dataacquired by customer-facing personnel and accountmanagers should not reside with that person alonebut should be a shared organizational asset avail-able to relevant personnel within ESBIEFM andembedded within the company. ESBIEFM definedits eCRM needs as the development of a systematicapproach to the management of its customers,aligned to objective metrics to monitor client satis-faction, delivering and exceeding specified levels of

service provision and building and maintainingclient relationships. The company selected an off-the-shelf software package to assist it in embeddingaspects of best marketing practice as well as reduc-ing development costs. The company chose abrowser application as opposed to a stand-alonesystem so that it could be easily accessed by cus-tomer facing staff via laptops and other mobiledevices worldwide (Kennedy et al., ).

Within ESBIEFM customer profiles have beendeveloped and updated within the eCRM systemand the company has been able to drill down intoworkflow processes in terms of managing projectsfrom the first initial enquiry or contact through todeveloping the business proposal, winning thebusiness, and through to signing the contract,follow-up and prospecting for repeat business.Approximately customer profiles are currentlyon the system, which enables all customer issues tobe tracked and monitored in order to determineand improve resolution timeframes with the aim offurther improving customer service. Metricsemerging from the eCRM system focus on issuessuch as the success rates in winning business andmeasuring repeat business with customers. Thesystem also allows tracking of issues with clients toensure satisfaction. There are difficulties inherentin the process of defining metrics to be used giventhe diverse range of clients involved both domesti-cally and internationally but these are under con-stant review (Kennedy et al., ).

It is obvious from these case examples that theInternet and other electronic channels now offerimportant new dimensions to customer interac-tion. With the advent of eCRM customer rela-tionships have become more dynamic and interac-tive, allowing companies to use information tocommunicate better with customers. The Internetoffers the possibility of implementing effectivecustomer management operations through the useof IT applications. Now a company can track cus-tomer behaviour and use this data to maximisecustomer profitability and loyalty throughout theentire life cycle (Gurau et al., ).

Managing Customer Touch PointsCustomers are moving between traditional and on-line channels with greater frequency when dealingwith organisations. eCRM systems support multi-channel touch points with the company and a key

Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World

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Graham Technology, ‘Powering Process. PoweringProfitability’, ‘GT-X: An Eircom Case Study’,www.gtnet.com.

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challenge is providing a consistent experience forthe customer. Offering multiple interaction pathsscores convenience points for customers but thisbenefit quickly evaporates if the customers areforced to repeat themselves because one part of theorganisation is not synchronised with another.Customers accustomed to real time informationand responses must be catered for when they switchto an alternative channel. It shouldn’t in principlemake any difference whether a customer interactswith the company through the sales force, over theWeb or indirectly through a reseller. For this reasoneffective multi-channel management has emerged asa hallmark of a successful CRM strategy (Crosbyand Johnson, ) within organisations.

One of the greatest benefits of eCRM comes fromusing it to link every operation in a business thataffects the customer experience. Technology allowscompanies to capture customer feedback at more ofthe ‘touch points’ between a company and its cus-tomers across channels and functions, for examplemeetings with sales people, customer serviceenquiries, Internet purchases and customer surveysto improve relationships and value for individualcustomers. However, as mentioned, providing suchconsistent and timely customer service becomes acomplex process as customers increasingly makeenquiries through these multiple channels and touchpoints. The increased number of communicationchannels heightened customer expectations of DHL,which addressed this issue through eCRM technol-ogy. The technology employed enables agents, part-ners, managers and other users to maintain a singleview of all customer information, gain instant organ-isational knowledge and efficiently interact with cus-tomers across multiple communications channels.The ability to provide a single, enterprise-wide viewof the customer has led to vast improvements in cus-tomer service and allowed the company to improvethe bottom line at the same time.

To achieve similar types of benefits companiesneed to be able to integrate all their customerdatabases to meet the needs of the customer who

emails today and calls tomorrow. This will alsoallow companies to communicate with the cus-tomer more effectively and in the manner eachindividual customer prefers (Scullin et al., ),further enhancing the relationship.

Personalisation and e-LoyaltyWith new eCRM technologies it becomes possiblefor a company to tailor the whole customer experi-ence to the individual. Tailoring based on cus-tomer data, active personalisation, includes infor-mation content presented, the products offeredand also advertising from other organisations. Theexistence of direct-to-customer channels is the keyenabler for automated systems to be able to deliverhighly relevant content because of the amount ofdata that can be collected (links clicked in emails,items viewed but not purchased on-line, etc.)(Anon, ). For example, every Amazon cus-tomer gets personal recommendations for booksbased on Amazon’s personalisation technology.The personalised web pages of American Airlineshave provided a source of competitive advantage ina fiercely competitive marketplace, as has theHertz Rent a Car strategy with its unique servicefor preferred customers (Davids, ). Throughsuch personalised websites customers are empow-ered to customise the site to suit their preferencesand facilitate their navigation (Ab Hamid, ).

Internet-based CRM technology has allowedNestlé to personalise its interactions with individ-ual customers, cut the number of phone calls intoits call centres and provide employees with onecomputer system to tap for information acrossnumerous sales channels (Anon, ). Nestlé hasalso installed several web-based CRM systems tosupport customer loyalty and retention pro-grammes such as Netspresso, an initiative reward-ing frequent drinkers of the Nescafé brand. Lee-Kelley et al. () investigated whether the use ofon-line customer interaction information to deploytargeted personalised tools leads to loyalty on-line.The study found that eCRM could directlyimprove the loyalty levels of Internet customers.Salmen and Muir () also demonstrate, throughtheir study of Internet banking operations, thatelectronic customer care tools can be used to createcustomer e-loyalty in the banking field.

The knowledge management dimension of eCRMimplementation including data mining and person-

Irish Marketing Review Volume Number

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Graham Technology, ‘Powering Process. PoweringProfitability’, ‘GT-X: An Eircom Case Study’,www.gtnet.com.

DHL, http://www.dhl.com and http://www.ssaglobal.com/epiphany

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alisation has been shown in research to be a criticalsuccess factor for companies implementing eCRM(Chen & Chen, ). Weiss () also suggeststhat such personalisation and on-line interactivitycan be used to help build emotional connectionswith customers in ways that no other medium can.These relationships provide an opportunity for thecompany to realise economies of scope.

Leveraging eCRM as a Source of CompetitiveAdvantageWhen executed correctly eCRM implementationsare designed as a digital loyalty cycle that continu-ously improves to create lasting competitive advan-tage. When a company uses eCRM technology andredefines its business processes in customer acquisi-tion and retention, it strengthens its capabilities inkey areas that determine a customer’s purchasedecision including pricing, product quality, mar-keting, sales and customer service to create a virtu-ous digital loyalty cycle (Anon, ).

For companies at the forefront of CRM develop-ment, opportunities exist to reinforce their com-petitive advantage through the extension of thecustomer-centric strategic orientation to incorpo-rate innovative eCRM strategies and technologies.For example, eircom has adopted eCRM as astrategic imperative with net benefits for both thecompany and its customers. eircom’s on-line salesand service channel, www.eircom.ie, was firstdeveloped as a high-level static marketing site in but since then has been upgraded to a fullyintegrated enterprise-scale portal application,incorporating a personalisation platform and con-tent management system, which currently sup-ports over , e-customers. The implementa-tion of eCRM has dramatically reduced the costof communicating with customers and has led toreduced administrative and operational costs. On-line transactions are fully integrated with eircom’score provisioning and other enterprise applica-tions. eCRM has developed significant scalabilitybenefits to the organisation in comparison to tra-ditional call centre and sales force operations andthe on-line channel is perfectly placed to posi-tively meet any increased traffic.

With eCRM customer-centric companies can usecustomer information to better manage pricing andmarketing decisions in real time, and in the case ofeircom e-customers are incentivised by reducedprices for a number of products and services on-line. All channels access eircom’s core CRM appli-cation, making a -degree view of the customerpossible. Key performance metrics include cus-tomer usage and an on-line satisfaction barometer.E-customer feedback is critically evaluated andused to constantly improve the e-customer offer-ing. Strategic initiatives planned for the on-linechannel include the integration of a sophisticatedbilling analysis tool and ongoing usability analysis.eircom is also turning its focus to re-engineeringthe corporate extranet experience to deliver thebenefits of eCRM to its customer base.

Challenges of eCRMWith eCRM customers drive the interactiondeciding on the type and duration of contact per-missible. The ability to create intimacy with thecustomer is limited and building trust can be dif-ficult. When managing an on-line channel com-panies are faced with the fact that greater choicecreates fickleness among customers and with thecompetition only one click away there are nosecond chances to recover mistakes in theseremote channels (Fairhurst, ). Data integra-tion and IT architecture challenges also exist fororganisations adopting eCRM technologies.

Customer Interactions and RelationshipsThe use of an eCRM system enables traditionalphysical customer proximity to be substituted bydigital proximity. The need for customer reassur-ance in the purchase decision can be exacerbatedby new e-channels and needs to be addressed bythe creation of, for example, on-line communities,on-line shop assistants, customer testimonials andgeneral reassurance about buying strategies andpurchase choices for customers (Anon, ).Salmen and Muir () promote the value of cre-ating further contact possibilities between cus-tomers, in this case banking customers, within thecontext of virtual communities in which customerexperiences can be exchanged. The ability tocreate intimacy with the customer does not existon-line and due to the remoteness of these chan-nels building trust is more difficult, with the rela-tionship element of eCRM harder to buildbeyond a purely transactional one. In the absence

Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World

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Graham Technology, ‘Powering Process. PoweringProfitability’, ‘GT-X: An Eircom Case Study’,www.gtnet.com.

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of such trust it is harder to get customers to sharethe data which is essential to creating effectiveCRM strategies. Privacy policies and guaranteesbecome an essential element in building trust andconsequently effective eCRM initiatives for com-panies (Fairhurst, ).

Managing an On-Line Channel Fairhurst () sees eCRM as merely part of thebigger picture of enterprise–wide CRM, as CRMenabled by the use of new electronic and interac-tive media. The on-line channel is described byParekh () as merely one piece of the CRMpuzzle but one which will become increasinglyimportant for companies who must now learn tomanage relationships with e-customers as theseelectronic channels mature and the e-customerbase proliferates. eCRM is now a priority for themajority of companies as the impact of electronicinitiatives on sales and service requirements con-tinues in tandem with the increased levels ofinvestments in Internet-related delivery made bycompanies (Parekh, ). eCRM can then beseen to provide a structure for the possible strategicevolution of a technology-mediated relationshipmarketing business framework. Kalakota andRobinson () suggest that such a frameworkhas three primary goals: using existing relation-ships to grow revenues; using integrated informa-tion for excellent service; and introducing consis-tent replicable channel processes and procedures.This orientation positions eCRM as an integrationframework and a business strategy but not as aproduct in and of itself (Taylor and Hunter, ).

Companies cannot treat the Web as a single chan-nel that stands in isolation from others. This newchannel still needs traditional front and backoffice systems in place to make it function success-fully. Companies setting up such new channelsmust make every possible effort to integrate themtightly with existing business processes and/orchannels first. As interest has intensified in doingbusiness on the Internet many companies haveapproached this as a separate project to theirCRM strategy. Such an approach makes for aninconsistent and unsatisfactory customer experi-ence which will not make any business successful(Bradshaw & Brash, ). The ability to matcheCRM initiatives to an institution’s own businessmodel has emerged as a characteristic of successfulcompanies in the eCRM arena (Bradway and

Purchia, ). Bradshaw & Brash () in theirresearch of UK firms found that organisationsaddressed different customer facing processes(sales, marketing, services) and channels (callcentre and Web) as separate projects, giving littlechance of providing the customer with consis-tency. Companies were managing individualtransactions and interactions when they shouldhave been managing relationships.

Also the on-line channel must not be allowed tocannibalise other valuable customer contact pointsand should attract and retain only those customersbest served through this contact point. In otherscenarios traditional contact points may remainthe most appropriate (Butler, ). For example,eircom views www.eircom.ie, its on-line sales andservice channel, as a complementary rather than acompeting customer channel to traditional con-tact points, which continue to service a large pro-portion of the customer base. Similar patterns canbe seen within the provision of financial servicesand retailing in the marketplace, where a limitednumber of customer segments migrate to on-linedelivery options. An associated challenge for com-panies is trying to assess eCRM performance.Traditional eCRM has proved difficult to assess interms of company performance and return oninvestment (ROI); similarly companies need met-rics to track the efficacy of their eCRM initiatives.Some research (Nemati et al., ) has incorpo-rated specific benefits of eCRM such as ROIexpectations, user satisfaction levels and the cre-ation or absence of new sources of competitiveadvantage as survey research variables, but suchresearch to date has been limited.

Challenges of Data Integration and IT Architecture From a technology perspective an eCRM systemrepresents a mass of seams that need to be tightlystitched together, in essence a mass of integration.No single software application is able to fill thegap, nor is it likely to be filled internally. Toimplement eCRM companies will need a varietyof hardware/software applications and tools(Anon, ). This suggests significant resourceand cost implications, which companies mustincorporate into their overall strategic planning.

An eCRM system is also highly dependent onneighbouring systems to be effective, for example:

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traditional ‘front office’ CRM which has to be con-sistent with an eCRM system at both data andprocess levels; back office systems which supplyproduct availability and pricing information as wellas previous customer transaction details; an existingdata warehouse/mart consolidating customerrelated information; and finally Web content man-agement and authoring tools (Anon, ). All ofthese linkages need to be effective and operationalfor eCRM to successfully impact company activi-ties and will present a host of challenges as businessprocesses may have to be modified. This reinforcesthe need for companies to have well-developedbusiness processes and information and technologyinfrastructures on which to build and sustaineCRM competences (Fairhurst, ).

In the area of on-line retailing, BuyNow, Ireland’son-line shopping centre, has successfully dealt withthis data and systems integration challenge.BuyNow has developed its own order fulfilmentsystem (OFSNow) which allows partner retailersto view orders on their websites. Retailers receiveorders and then pick the items from the shop floor.As the orders are filled they are updated on thesystem so that the customer can view their orderstatus. Updates to the OFSNow system link to thewarehouse system operated by BuyNow Logisticsand to the BuyNow portal and call centre system,allowing customer queries to be efficiently andeffectively dealt with, increasing the level of cus-tomer service offered and enhancing customer rela-tionships (Kennedy and Coughlan, ).

Integrating data from multiple sources, both on-line and off-line channels, is a critical issue infacilitating successful and valuable eCRM analyt-ics (Nemati et al., ) but will represent a chal-lenge for even the most progressive of companiesinitially. Nemati et al. () suggest thatalthough on-line, off-line and external data inte-gration has its complexities, the value added is sig-nificant. Their research suggests that companiesintegrating data from various customer touchpoints achieve significant benefits with higher usersatisfaction and ROI rates than companies that donot deal with the data integration challenge.However, having access to and managing technol-ogy is only half the battle. Bradway and Purchia() see the ability to effectively integrateeCRM with other CRM initiatives which requirea great deal of technology integration, in addition

to process integration, as a core capability that willdistinguish best eCRM practice among compa-nies. Such integration represents a formidablechallenge for companies but if successfully man-aged can generate a source of competitive advan-tage in the marketplace.

A number of these issues are illustrated by theexperiences of eircom, which has designed andimplemented an eCRM solution integrating itssales, marketing and service delivery activities.Within eircom this eCRM business solution wasimplemented throughout seven contact centresnationwide. Sales and support staff now haveaccess to customer data, provisioning and billinginformation and a comprehensive marketing data-base. The information is stored in a number ofdisparate servers throughout eircom. The solutionwas enhanced with the implementation of an inte-grated customer information database (ICID).This enables eircom to have a single view of itscustomers across several key systems. The databaseholds the details of the customers, the individualsand the accounts that make up that customer andall the relationships the individuals have with boththe company and each other. ICID also providesthe central facility to capture communicationswith customers from the many different channelswithin eircom, including the contact centres andthe Web. It has transformed the way eircom inter-acts with its customers, bringing a customer-cen-tric approach to the company. The benefitsincluded consistent and higher quality customercare, faster time to market for new products andincreased sales and productivity. A product querycan now be fully answered in three minutes asopposed to ten under the old system. Reducedtraining time and costs is another benefit to thecompany, as staff can be trained on the newsystem in three days compared with the need forongoing training with the old system.

The result of this initiative was that eircom success-fully achieved full integration: electronic diary andorder management, recording of all customer his-tory details and consistent call handling. This inturn resulted in shorter call duration, lower costsper contact and more efficient and automated

Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World

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Kainos, ‘Kainos/eircom’, www.kainos.com.

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processes where the system performs all the tasks.Leveraging the customer base with eCRM canfacilitate cross-selling complementary products aswell as ‘selling up’ to higher quality substitutes(Ragins and Greco, ). In the case of eircom,call centre operators are now empowered to up-sellproducts and services as well as discount plans tocustomers with a high propensity to churn. Keyperformance indicators to assess improvementsincluded: average call processing time, revenue perdecision making contact, speed of answering calls,service levels and electronic enablement levels.

Also, the introduction of the eircom VoiceRecognition (e-VR) ‘’ system means thatmany tasks can be completed within the auto-mated system, removing the need for agent inter-vention. However, other services continue to behandled by call centre agents, but through theaddition of speech enabled data collection and thepassing of this data directly to agents handlingtime is reduced, as is the cost per call. WithinESBIEFM the main priority for future CRMdevelopments is the integration of financial infor-mation with the eCRM system. It is planned tointegrate fully with the organisation’s accountingsystem to get real time financial information forpeople facing the customer (Kennedy et al., ).

Chen and Chen () have explored the key suc-cess factors of eCRM strategies in practice andsuggest that system integration dimensions con-sisting of sub-factors such as functional integra-tion, data integration, system compatibility, expe-rience comparability to offline CRM andintegration with other CRM channels were criticalfactors for companies. However, organisations arecontinually challenged when integrating Webtechnologies into their existing systems.Challenges can include scalability issues, manag-ing large click-stream databases and a general lackof organisational experience (Nemati et al., ).

Marketing and IT Alignment The IT function is an essential enabler of businessdevelopment within an organisation. However,

mismatched perceptions and expectations betweenthe Marketing and IT functions can often impactand delay eCRM strategies. Marketing users oftenfocus on the front end of applications and assessthe functionality of the eCRM system with limitedunderstanding of data and Web integration issues,while the IT function tends to assess its technicalquality. An additional concern is that eCRM pro-jects driven by a functional head, such asMarketing or IT, rarely produce an enterprise viewof customers and modelling applications to a singlefunctional view can often lead to failure. SuccessfuleCRM strategies necessitate improved levels ofintegration between functions to successfully har-ness the opportunities available. This is reinforcedin research by O’Leary et al. () which high-lights the need for collaboration betweenMarketing and IT teams to facilitate successfulintegration. Chen and Chen () highlight theneed for a holistic view of business models, systemarchitecture and integration of business and ITstrategies. An organisation’s success in eCRM willinvolve creatively using appropriate analytical tech-niques to exploit the data (Gurau et al., )while simultaneously increasing the interaction andalignment between Marketing and IT to maximiserelationship opportunities and to facilitate true per-sonalisation and customisation. Such alignment orre-alignment of functions must be addressed ifcompanies wish to pursue effective and successfule-service quality initiatives.

ConclusionAs e-technologies continue to develop into thefuture in tandem with the proliferation of an e-cus-tomer base, companies must attempt to harness theopportunities available to deliver sustainable com-petitive advantage in the digital world of eCRM.To inform such strategies there is an ongoing needto examine how companies are translating invest-ments in eCRM technologies into sustainable com-petitive advantage in the marketplace. The role ofeCRM in the development and management ofmulti-channel strategies is also an issue for furtherresearch. It can be difficult for companies to put inplace the correct metrics to evaluate eCRM strate-gies, and further research on gauging the effective-ness of eCRM through performance measurementswithin organisations would be useful. Though theliterature on self-service technologies is growingthere is an ongoing need to examine the responseof customers to a company’s eCRM strategies.

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Kainos, ‘Kainos/eircom’, www.kainos.com. Graham Technology, ‘Powering Process. Powering

Profitability’, ‘GT-X: An Eircom Case Study’,www.gtnet.com.

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Given the complexity of the issues involved indata integration and the significant role it plays inachieving eCRM’s goals (Nemati et al., ), italso appears an area ripe for further research. It issuggested that eCRM has the potential to alterbusiness processes significantly and as a resultinterdisciplinary approaches examining the impactof technology innovations on marketing areneeded. Though research is available on designconcepts for CRM systems (Ahn et al., ) deal-ing with data processing, mining and analyticaltechniques (Padmanabhan and Tuzhilin, ;Nemati et al., ), the focus within marketing/

business academe has been on the front end ofeCRM applications with limited investigation ofIT issues with a marketing-oriented focus. Thereis recognition in the academic literature of themarketing benefits and the IT challenges ofeCRM, but these appear almost separately. At themoment a knowledge gap exists between theadoption and implementation of eCRM in prac-tice and robust research-based insights and princi-ples. This paucity of academic research needs tobe addressed given the positioning of eCRM asthe latest paradigm of relationship marketing inthe e-world (Chen and Chen, ).

Electronic Customer Relationship Management (eCRM): Opportunities and Challenges in a Digital World

AuthorAileen Kennedy is a lecturer in services marketingin the Faculty of Business at the Dublin Instituteof Technology. Research interests include: servicesinternationalisation and entry modes; customerrelationship management (CRM); electronicCRM (eCRM); and citizen relationship marketing(CzRM). Currently involved in research projectsexploring CRM adoption and implementationwithin Irish SMEs; on-line retailing and e-government policies and practices.

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