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Understanding Customer Relationship Management Emerald

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  Business Process Management Journal Understanding customer relationship management (CRM): People, process andtechnology Injazz J. Chen and Karen Popovich  Article information: To cite this document:Injazz J. Chen and Karen Popovich, (2003), Understanding customer relationship management (CRM) ,Business Process Management Journal, Vol. 9 Iss 5 pp. 672 - 688 Permanent link to this document: Downloaded on: 06 October 2014, At: 12:13 (PT)References: this document contains references to 49 other documents.To copy this document: permissions@emeraldinsight.comThe fulltext of this document has been downloaded 52147 times since 2006* Users who downloaded this article also downloaded: Christopher Bull, (2003), Strategic issues in customer relationship management (CRM) implementation ,Business Process Management Journal, Vol. 9 Iss 5 pp. 592-602Yurong Xu, David C. Yen, Binshan Lin, David C. Chou, (2002), Adopting customer relationshipmanagement technology , Industrial Management & Data Systems, Vol. 102 Iss 8 pp. 442-452E.W.T. Ngai, (2005), Customer relationship management research (1992#2002): An academic literaturereview and classification , Marketing Intelligence & Planning, Vol. 23 Iss 6 pp. 582-605 Access to this document was granted through an Emerald subscription provided by 499871 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald forAuthors service information about how to choose which publication to write for and submission guidelinesare available for all. Please visit for more information.  About Emerald Emerald is a global publisher linking research and practice to the benefit of society. The companymanages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well asproviding an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committeeon Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archivepreservation. *Related content and download information correct at time of download.    D  o  w  n   l  o  a   d  e   d   b  y   G   L   Y   N   D   W   R   U   N   I   V   E   R   S   I   T   Y   A   t   1   2  :   1   3   0   6   O  c   t  o   b  e  r   2   0   1   4   (   P   T   )  Understanding customerrelationship management(CRM) People, process and technology Injazz J. Chen and Karen Popovich  Department of Operations Management and Business Statistics,College of Business Administration, Cleveland State University,Cleveland, Ohio, USA Keywords   Customer relations, Business process re-engineering, Relationship marketing, Integration Abstract   Customer relationship management (CRM) is a combination of people, processes and technology that seeks to understand a company’s customers. It is an integrated approach tomanaging relationships by focusing on customer retention andrelationship development. CRM hasevolved from advances in information technology and organizational changes in customer-centric processes. Companies that successfully implement CRM will reap the rewards in customer loyaltyand long run profitability. However, successful implementation is elusive to many companies,mostly because they do not understand that CRM requires company-wide, cross-functional,customer-focused business process re-engineering. Although a large portion of CRM is technology,viewing CRM as a technology-only solution is likely to fail. Managing a successful CRM implementation requires an integrated and balanced approach to technology, process, and people. 1. Introduction In the mid-twentieth century, mass production techniques and mass marketingchanged the competitive landscape by increasing product availability forconsumers. However, the purchasing process that allowed the shopkeeper andcustomer to spend quality time getting to know each other was alsofundamentally changed. Customers lost their uniqueness, as they became an“account number” and shopkeepers lost track of their customers’ individualneeds as the market became full of product and service options. Manycompanies today are racing to re-establish their connections to new as well asexisting customers to boost long-term customer loyalty. Some companies arecompeting effectively and winning this race through the implementation of relationship marketing principles using strategic and technology-basedcustomer relationship management (CRM) applications.CRM technology applications link front office (e.g. sales, marketing andcustomer service) and back office (e.g. financial, operations, logistics andhuman resources) functions with the company’s customer “touch points”(Fickel, 1999). A company’s touch points can include the Internet, e-mail, sales,direct mail, telemarketing operations, call centers, advertising, fax, pagers, The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at BPMJ9,5 672 Business Process Management JournalVol. 9 No. 5, 2003pp. 672-688 q MCB UP Limited1463-7154DOI 10.1108/14637150310496758    D  o  w  n   l  o  a   d  e   d   b  y   G   L   Y   N   D   W   R   U   N   I   V   E   R   S   I   T   Y   A   t   1   2  :   1   3   0   6   O  c   t  o   b  e  r   2   0   1   4   (   P   T   )  stores, and kiosks. Often, these touch points are controlled by separateinformation systems. CRM integrates touch points around a common view of the customer (Eckerson and Watson, 2000). Figure 1 demonstrates therelationship between customer touch points with front and back officeoperations.In some organizations, CRM is simply a technology solution that extendsseparate databases and sales force automation tools to bridge sales andmarketing functions in order to improve targeting efforts. Other organizationsconsider CRM as a tool specifically designed for one-to-one (Peppers andRogers, 1999) customer communications, a sole responsibility of sales/service,call centers, or marketing departments. We believe that CRM is not merelytechnology applications for marketing, sales and service, but rather, when fullyand successfully implemented, a cross-functional, customer-driven,technology-integrated business process management strategy that maximizesrelationships and encompasses the entire organization (Goldenberg, 2000). ACRM business strategy leverages marketing, operations, sales, customerservice, human resources, R&D and finance, as well as information technologyand the Internet to maximize profitability of customer interactions. Forcustomers, CRM offers customization, simplicity, and convenience forcompleting transactions, regardless of the channel used for interaction(Gulati and Garino, 2000).CRM initiatives have resulted in increased competitiveness for manycompanies as witnessed by higher revenues and lower operational costs.Managing customer relationships effectively and efficiently boosts customersatisfaction and retention rates (Reichheld, 1996a, b; Jackson, 1994; Levine,1993). CRM applications help organizations assess customer loyalty andprofitability on measures such as repeat purchases, dollars spent, andlongevity. CRM applications help answer questions such as “What products orservicesareimportanttoourcustomers?Howshouldwecommunicatewithourcustomers? What are my customer’s favorite colors or what is my customer’ssize?” In particular, customers benefit from the belief that they are saving timeand money as well as receiving better information and special treatment(Kassanoff, 2000). Furthermore, regardless of the channel or method used tocontact the company, whether it is the Internet, call centers, salesrepresentatives, or resellers, customers receive the same consistent andefficient service (Creighton, 2000). Table I provides a brief overview of some of the benefits that CRM offers by sharing customer data throughout theorganization and implementing innovative technology.With much success, software vendors such as Oracle, SAP, PeopleSoft,Clarify, SAS, and Siebel are racing to bring off-the-shelf CRM applications toorganizations. Many of these are the vendors responsible for developingenterprise resource planning (ERP) systems. AMR Research estimates that theCRM market will top $16.8 billion by 2003 (Tiazkun, 1999). UnderstandingCRM 673    D  o  w  n   l  o  a   d  e   d   b  y   G   L   Y   N   D   W   R   U   N   I   V   E   R   S   I   T   Y   A   t   1   2  :   1   3   0   6   O  c   t  o   b  e  r   2   0   1   4   (   P   T   )  Figure 1. CRM applications,supported by ERP/datawarehouse, link frontand back office functions BPMJ9,5 674    D  o  w  n   l  o  a   d  e   d   b  y   G   L   Y   N   D   W   R   U   N   I   V   E   R   S   I   T   Y   A   t   1   2  :   1   3   0   6   O  c   t  o   b  e  r   2   0   1   4   (   P   T   )
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