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Classifying and selecting e-CRM applications:

an analysis-based proposal

Dotun Adebanjo
E-Business Division, University of Liverpool Management School,
University of Liverpool, Liverpool, UK

Keywords that there was a lack of measurement tools to


Computer software, Background facilitate evaluation of CRM implementation.
Consumer behaviour,
Relationship marketing, Internet Customer relationship management (CRM) is In addition to these strategic reasons, there
one of the fastest growing management are other reasons regarding the selection and
Abstract approaches being adopted across many configuration of the e-CRM tools (Rheault
The application of technology to organisations. Ovum (Bradshaw and Brash, and Sheridan, 2002). These latter reasons
customer relationship management
2001), an independent research and form the basis for the study that this paper
(CRM) initiatives (e-CRM) is one of
the fastest growing technological consulting company, define CRM as: presents.
developments. However, there is A management approach that enables
sufficient evidence to show that organisations to identify, attract and increase
many CRM initiatives do not retention of profitable customers, by
achieve the desired result. One of
Research context
managing relationships with them.
the reasons for this is the lack
In an analysis of CRM failures, Trembly
of clarity that surrounds the The implementation of CRM impacts on a
classification and selection (2002) noted that many organisations foster a
number of functions within an organisation false expectation that simply buying a piece
considerations of CRM
applications. Identifies and including sales, IT, operations, marketing of software will lead to CRM benefits. With
and finance. Bradshaw and Brash also
discusses key factors that need to the availability of hundreds of commercial
be considered when electronic asserted that implementing CRM is certain to software applications, the selection of the
CRM solutions are to be
involve the deployment of new technologies. appropriate application can pose a major
implemented. Among other
The deployment of such technologies gives
findings, proposes perspectives challenge. This difficulty is facilitated by the
an insight into the rate of growth of CRM
from which e-CRM implementation fact that CRM means different things to
may be viewed in addition to applications (e-CRM). A study by AMR different people with a scope ranging from
identifying three integration Research predicted that the CRM software
dimensions applicable to e-CRM direct e-mails to mass customisation to call
market would be worth more than $16 billion
solutions. Concludes that, while centres (Winer, 2001). Brickle (2002) wrote:
by 2003 (Ness et al., 2001), while another study
e-CRM applications could enhance The CRM market is still immature and
by IDC forecast that the world-wide market
the delivery of a CRM strategy, seems to include everything from contact
such applications should be chosen
for CRM products and services would be management and call centre systems to
carefully to fit in with organisational
worth $125 billion by 2004 (Winer, 2001). fully integrated enterprise-wide solutions.
culture, process and legacy IT
However, the deployment of CRM Investing in the technologies can be
systems. The financial and human
resource cost as well as the applications has not always delivered the expensive, so companies must have a clear
amount of time required for understanding of the requirements and the
result that organisations expect. Earley
implementation of a CRM benefits . . .
(2002) noted that 75 to 85 per cent of CRM
application should also be key
implementations fail. Bain's 2001 survey of
factors in the selection of e-CRM April and Harreld (2002) found that most
applications. management tools ranked CRM in the bottom large companies tend to have five to ten CRM
three for satisfaction out of 25 popular applications running concurrently. They also
The author would like to management tools (Rigby et al., 2002), while found that these applications tend to be
thank the RDF committee of Kehoe (2002) found that up to 20 per cent of diverse in functionality and therefore create
the University of Liverpool business executives claim that CRM the need for integration. Bradshaw and
for supporting this project. initiatives had damaged customer Brash (2001) further noted that CRM
relationships. applications must not only integrate
The inability of CRM applications to functionally at the front office but also
deliver the expected benefits has been the integrate with back office functions such as
subject of many studies. Reasons identified manufacturing and billing.
include failure to develop a CRM strategy Consequently the selection of CRM
(Cann, 1998; Rigby et al., 2002) and lack of applications needs to be strategic and based
robust implementation approaches (Rheault on relevant criteria for implementation to
Management Decision and Sheridan, 2002). Abbott (2001) also noted stand a chance of success. These criteria will
41/6 [2003] 570-577
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[ 570 ]
Dotun Adebanjo include functionality, company strategy, This range of considerations implied that
Classifying and selecting legacy back office systems and application different research tools and approaches
e-CRM applications:
an analysis-based proposal architecture. There is currently no rigorous needed to be applied if the project was to
approach to classifying CRM applications on provide comprehensive analysis of the range
Management Decision
41/6 [2003] 570-577 such a wide-ranging basis. Current of issues to be addressed. The application of a
classification of CRM applications identifies singular or limited research tool to all three
three groupings (Karimi et al., 2001): aspects of applications classification would
1 Operational CRM products ± for have resulted in non-robust findings as each
improving customer service, online is best analysed by different tools. The
marketing, automating salesforce, etc. research tools used during the project are
2 Analytical CRM products ± for building described below.
data warehouses, improving relationships,
analysing data, etc. Systems application experimentation
3 Collaborative CRM products ± for building A commercially available CRM software
online communities, developing business- package was purchased for experimentation
to-business customer exchanges, purposes. Software purchase was executed
personalising services, etc. on a generic basis ± as would be done by a
potential industrial user ± an off-the-shelf
While all CRM applications including e-mail
CRM package that has sold successfully in a
interfaces, databases, call centres, Internet
number of countries. Systems application
marketing and customer contact can be
experimentation would involve trial
classified using the above taxonomy, the
installation of the software in order to
value proposition to an organisation faced
identify the architecture and functional
with a choice of hundreds of different
characteristics delivered. The experimental
products, each claiming to be unique, is approach was to try and configure the
predictably low. Reasons for this include the application to a number of business models
fact that some applications (e.g. call centre including that of a financial organisation and
software) can be classified into more than a retail organisation. The configuration
one category. Furthermore there is no primarily addressed two issues ± process
organisational function alignment with the configurability and presentation
above taxonomy. configurability. This research approach
In addressing these issues the study would be vital in the determination of the
presented in this paper was based on the complexity, time and functional features of
following research questions: e-CRM applications.
. What are the key characteristics that can
be used to differentiate CRM software
applications?
Functional trials and analysis
Functional trials of different CRM software
. What alternative classification
were carried out to complement the
approaches can be applied to these
applications experimentation. The purpose of
applications?
this was to understand the characteristics and
functional capabilities and characteristics of
other commercial e-CRM applications. In total
Research methodology ten different software applications were
The project involved analysis of three key assessed including applications developed by
aspects of CRM applications classification: leading ERP organisations such as SAP. The
1 Functionality ± identifying and classifying approach to this was twofold. In the first
the range of services that commercially instance, trials were carried out using online
available CRM applications can deliver. vendor promotion prototypes offered by
The features of the application need to be vendor Web sites. The second approach was
aligned with the operational processes of assessment of software applications presented
the implementing organisation. at vendor exhibitions.
2 Architecture ± the software configuration
options that enable functionality. The Technical specification analysis
software architecture should enable An analysis of the technical specifications of
integration with legacy infrastructure commercially available CRM software was
such as databases. carried out. The technical specifications
3 Value identification ± the software included an analysis of key factors such as
category selection decisions that must be software integration, operating systems,
made and the implications for commercial suitability for use in different organisations
value and operational effectiveness. and functions and database compatibility.
[ 571 ]
Dotun Adebanjo In total, 15 software applications were application configured in different ways
Classifying and selecting analysed including products from leading (team projects, automatic task allocation,
e-CRM applications: administrator/team manager control). To
an analysis-based proposal organisations such as Microsoft, Sage and
SAP. make effective use of such functions, the
Management Decision
41/6 [2003] 570-577 administrator must understand the
Literature review culture of teamwork and workflow
A review of current literature on CRM processes within the groups and configure
software and their characteristics was the application accordingly. In many
carried out to identify and assess any instances, this combination of
current methods of classification and competencies is not available to the
functionality for commercially available organisation or application selection is
applications. In addition the literature delegated to just one department, usually
review analysed the technical architecture the IT department.
applicable to e-business software in general. . Resource management. The resource
This approach enabled the identification of implications of purchasing and
integration and architecture options implementing CRM solutions can be
applicable to CRM software. significant from both fiscal and human
perspectives. Solution selection can be
very dependent on the cost of the
Findings application and the product purchased
may not be the most relevant. In addition,
The primary findings of the survey present the human resources required for
new perspectives for technical and software selection, installation, staff
operational segmentation and function-based training and implementation can be
analysis of e-CRM software applications. In under-estimated. Most software vendors,
addition, factors that impact on such for example, market e-CRM applications
classification and the ability of organisations by charging a price for the application and
to identify highest value-adding CRM then charging for each user licence
solutions were indicated and are described as purchased. For basic off-the-shelf
follows: applications with limited functionality
. Clockspeed development. The rate of (such as application experimented with),
evolution of software applications is very software and user licences can cost as
high with the applications becoming more little as £1,000 for the whole package. On
multifunctional in nature. An important the other hand, software that is specially
implication of this is that categorisation developed for an organisation can cost
into strict functional silos becomes less millions of pounds with user licences
robust. For example, many call centre costing thousands of pounds each.
applications are packaged with . Sector/IT alignment. Some solution
functionalities that could make them vendors (e.g. SAP) develop applications
eligible for classification either as that are generic in nature and are intended
collaborative or as operational software. to achieve seamless integration with
Furthermore the vendor ecosystem of legacy or incumbent IT infrastructure
CRM software is very dynamic with many (ERP, supply chain management, etc.).
vendors merging organisations and some Others develop ``best-of-breed''
going out of business in alignment with applications (e.g. Siebel systems) for
well publicised difficulties in the particular market sectors or individual
technology sector in recent years. organisations (financial, retail, tourism,
. Technical competencies. Significant etc.). There is often a need to make a
technical competencies are required by choice between these options, particularly
organisations that intend to select the best where the organisation has considerable
solutions for their business. These IT infrastructure in place. However, the
technical competencies are choice made has implications, some of
multifunctional and will involve IT, which are not always appreciated at
operational and cultural knowledge. the point of decision. Some of these
During the installation of experimental implications are presented in the specific
software and the trial of online software, findings that follow.
the importance of understanding
technical issues such as server/client E-CRM implementation perspectives
configuration, business process mapping The study identified three perspectives from
and team development and management which the implementation of e-CRM
were important. For example, e-CRM solutions can be viewed ± complexity,
users can be grouped into teams and the timeframe and configurability, and analysed
[ 572 ]
Dotun Adebanjo these perspectives in the context of the organisation. The requirement for high
Classifying and selecting different types of applications available: cost manpower implies that these are
e-CRM applications: typically the most expensive type of e-CRM
an analysis-based proposal Complexity
applications (with costs sometimes in the
Management Decision Figure 1 views implementation complexity
41/6 [2003] 570-577 million pounds range) to develop. Where
with respect to the cost of purchase of e-CRM
these have to be integrated with legacy
applications. Generally, basic stand-alone
systems, implementation manpower
applications are cheapest to buy (with costs
requirements and complexity associated
as low as £1,000) and implementation can
with interface management of two or more
be relatively straightforward if the key
applications may be high.
integration requirements are with a
database only. The basic application Timeframe
experimented with was installed in less than When considering the amount of time
an hour without the need for external required to implement (i.e. install or deploy)
consultants. Modular implementation of e-CRM applications, the study indicated that,
CRM applications developed by legacy relatively speaking, the implementation
system vendors (e.g. ERP) is seamless as timeframe of stand-alone applications and
there is little or no requirement for full ERP deployment is shortest. The
middleware or significant amounts of implementation of the basic application
integration manpower. Modular applications experimented with consisted of less than an
cost more than basic applications and would hour of installation time and two days of
require external expertise to integrate with configuration. Although full ERP deployment
the legacy ERP systems. However, the may involve lack of functional clarity, the
compatibility of the module with the legacy implementation of all the applications is
ERP system means only a limited amount of carried out at the same time. Consequently,
expensive external expertise will be an organisation could choose to set up a
required. ``Best of breed'' and bespoke CRM central database and install several modular
applications are typically more expensive as applications such as CRM, supply chain
a result of the service and integration management, purchasing and finance all at
considerations. ``Best of breed'' applications the same time. This could be accomplished in
typically come in standard packages that a few months. In contrast, modular
can then be configured for the requirements implementation of ERP-based CRM
of the organisation. Configuration would applications is carried out over a period of
typically involve making some changes to time with the organisation adding new
the application's functionality to make it modules as required. Consequently, the
more suitable for the organisation. The deployment could take place over years
integration of such applications is with the need for some external expertise
increasingly becoming more manageable as each time a new module is installed. The
vendors develop software with open systems difference in implementation cost between
architecture or that can be integrated using full ERP deployment and modular
middleware. deployment is not completely visible. In some
Bespoke CRM applications involve specific cases full deployment can be more expensive
development of the software for an as many applications are being implemented
at once with a higher possibility of
Figure 1 deployment challenges (Figure 2).
Complexity-cost relationships of e-CRM applications The implementation of ``best of breed'' and
``bespoke'' applications is typically the most
expensive and can, in certain cases, take
longest to implement. A key reason for this is
that integrating one of these applications
with legacy systems requires the
development of new business rules and/or
the use of middleware. The business rules
would align the application with the
processes of the organisation and as such
may have to be newly developed. Middleware
is important to ensure that such applications
are compatible with legacy systems, such as
databases, with which they have to exchange
information on a routine basis. If an
organisation later decides to integrate
another application (e.g. install a call centre
operation), the legacy business rules and
[ 573 ]
Dotun Adebanjo middleware would have to be undone and E-CRM integration dimensions
Classifying and selecting new ones that integrate the new application From the findings presented in previous
e-CRM applications:
an analysis-based proposal developed. The more applications an sections, it is clear that e-CRM integration
organisation implements, the greater the has a number of dimensions. Successful
Management Decision
41/6 [2003] 570-577 complexity, cost and timeframe for e-CRM implementation implies that all
implementation. Implementation of such dimensions need to be managed to a lesser or
systems is very costly and would typically greater degree depending on the organisation
take years rather than months to deploy involved. This is because the emphasis
fully. placed on the different dimensions of
integration will vary from organisation to
Configurability
organisation, even though all dimensions
The study identified that the factors that
would be represented. For example, a travel
impact the configurability of e-CRM
agency installing a call centre solution is
applications include database compatibility,
likely to focus on the ability of the
process alignment, user definition (e.g. the
application to recognise customer details
ability of the user to specify information
(technical), and automatically mail tickets or
displayed and format of display) and the
highlight outstanding payments (functional)
presentation template (i.e. the layout of
as well as be user-friendly (cultural). In
the page viewable by the user). Basic stand-
contrast, an organisation that is setting up an
alone applications are typically the least
e-mail marketing facility is more likely to be
configurable followed by modular ERP
interested in linking the application with the
systems. ``Best of breed'' and bespoke
e-mail database (technical) and perhaps, to a
applications are usually most configurable as
lesser extent, the ability to send personalised
these can be modified or built to exact user
offerings (functional). The key dimensions of
definition, presentation preferences and
e-CRM integration are described below:
process alignment. Figure 3 illustrates the . Technical integration. E-CRM applications
changing configurability of applications. need to be compatible with existing
The basic application used in the research technology and, furthermore, comprise an
enabled the configuration of data open architecture that would facilitate
presentation (e.g. renaming of fields and the integration with other e-business
number and type of fields to display) and applications that may be introduced in
the format of presentation (e.g. field sizes, future. Compatibility should ideally be
colour) but not the configuration of workflow across the architecture (database,
(e.g. set up an automated facility to manage a business logic and presentation layers).
sales process). Modular ERP systems . Functional integration. The ability of
typically can be reconfigured within some e-CRM applications to replicate or
limits (e.g. some toolbars and automated improve current business processes is a
processes are standard features of the key factor in successful implementation.
module). Best of breed and bespoke Generally speaking, the more configurable
applications can be configured fully to fit the application, the closer it can be
in with the organisation processes and tailored to the requirements of the
presentation preferences of the user. organisation. Functional integration
analysis needs to consider the ``fit'' that
Figure 2 the application would have on other
Implementation timeframe analysis processes/functions within the
organisation. Where this ``fit'' is
uncomfortable, then the organisation
faces the option of changing its processes
around to fit in with the technology. This
creates the risk of turbulence and its
associated operational inefficiencies.
. Cultural integration. Effective deployment
of new applications will be impacted by
the organisational acceptance of any
implied new working practices. It is
vital that such impacts are taken into
consideration during the planning stages
of the projects and, where desirable,
necessary actions (e.g. training,
awareness) factored into the project as
a whole.
[ 574 ]
Dotun Adebanjo Re-assessing the collaborative-analytical- The ability to manage this combination of
Classifying and selecting operational CRM classification factors impacts on the success of the task of
e-CRM applications: balancing the various considerations
an analysis-based proposal While classifying CRM applications as
collaborative, analytical or operational involved in selection of e-CRM solutions.
Management Decision
41/6 [2003] 570-577 provides some discrimination, in practice, While functional attributes and application
such discrimination is limited. In assessing cost are the most common factors
the prototypes and promotional literature of organisations consider when selecting
the e-CRM applications reviewed during this solutions, the study identified the
study, the suitability of different types of importance of other factors such as forward-
organisational functions to implement and backward-architecture compatibility,
particular types of applications was configurability, cultural alignment and
considered. A key finding was that most implementation timeframe. The relative
organisations and functions are likely to use importance of any of these factors will
more than one CRM application or, depend on the organisation involved. For
otherwise, use one application that has example, an online retailer that relies
multiple capabilities. significantly on e-marketing may consider
Using the collaborative-analytical- the implementation timeframe to be critical.
operational classification as a reference point, On the other hand, a travel agency whose
the interface options and the suitable collaborative/operational front office system
organisational function alignments were must be linked to the booking/reservation
identified and are presented in Table I. systems of a number of airlines may consider
The Table shows the inadequacy of the architecture compatibility to be of critical
collaborative-analytical-operational taxonomy importance. However, all of the factors
as the singular basis for the classification and mentioned need to be considered to some
selection of e-CRM applications. For example, extent as they will have varying impacts on
it is possible to have two separate applications the successful selection and implementation
in use by a range of departments with neither of the e-CRM application.
application fitting exclusively into the above Smart selection and speedy/efficient
classification. implementation of e-CRM solutions require a
combination of skills and competencies
that are multi-dimensional (technical,
Discussion operational, cultural, organisational, etc.) and
may require a team-based approach. While
The study identified generic challenges that
this may present few difficulties for medium
organisations face in the selection and
and large organisations, smaller
implementation of e-CRM applications. Some
organisations may be disadvantaged, although
of the challenges, such as the dynamic
their application requirements are likely to be
ecosystem of vendors and their applications,
less complex. Irrespective of the type of
cannot be controlled or impacted upon by
organisation, an understanding of the
the implementing organisations. Other
influencing factors and their likely impact is
challenges are more manageable and involve
important in the selection of e-CRM solutions.
a combination of training, awareness,
competence development, detailed planning
Value identification
and resource management.
Organisations that adopt e-CRM solutions
Figure 3 would expect that the applications improve
Time-based configurability of e-CRM applications their operational effectiveness and therefore
deliver value to the organisation. Value can
be gained in a number of ways including:
. Reducing the cost of contacting customers
± by making customer details readily
available, customer contact personnel
have better opportunities to resolve
customer enquiries in less time, thereby
freeing them for other productive work.
. Transferring some responsibility to the
customer (e.g. product configuration,
order tracking, online customer details
collection) reduces administrative and
operational costs for the organisation and,
therefore, increases the value that an
e-CRM solution will deliver to the
organisation.
[ 575 ]
Dotun Adebanjo Table I
Classifying and selecting Potential function-CRM application alignment
e-CRM applications:
an analysis-based proposal Function CRM application type Comments
Management Decision
41/6 [2003] 570-577 Sales Collaborative, analytical Sales analysis, customer contact, field sales, call
centres, task allocation team management, etc.
Marketing Collaborative, analytical e-Marketing, campaign analysis, historical
analysis, enquiries, task allocation, team
management, etc.
Finance Analytical Customer sales history, cashflow management,
etc.
Logistics/supply chain Collaborative, operational Order management, customer order tracking,
customer contact, delivery management, etc.
Customer services/desk support Collaborative, operational Call centres, order management, order tracking,
troubleshooting, customer contact, etc.
Business unit directors Analytical Sales analysis, campaign analysis, employee
productivity analysis, etc.
Operations Operational Order management
Product development Collaborative, analytical Collaborative development, market analysis,
product analysis, project management, etc.

. Integration of e-CRM applications with there is a threat of substitute products,


back-office systems such as production, organisations should look to implement an
finance and supply chains can improve e-CRM solution that improves efficiency or
workflow and, consequently, the differentiates its service. In industries with
efficiency of the organisation, thereby high barriers to entry (e.g. technology,
delivering cost savings. For example, field aerospace), organisations may choose to
salespeople could use hand-held devices to adopt e-CRM applications that improve the
initiate orders, check stock, track orders, customer experience or enables the customer
request invoices and check production to have an input in the design of the product.
status with minimal effort and cost. In industries where buyers have greater
. E-CRM applications have the potential to bargaining power, the organisation may
improve sales by customer profiling, consider that greater value would be realised
automated campaign management, e-mail by adopting e-CRM applications that are
marketing, etc., thereby improving the sales- and marketing-based. On the other
bottom line for the organisation. hand, where suppliers hold the bargaining
. Improving the overall interaction with power, sales- and marketing-based e-CRM
customers would lead to better service applications may deliver less value than
and improve customer satisfaction and applications that transfer some responsibility
loyalty and ultimately customer lifetime to the buyer.
value. The importance of loyalty to
commercial success has been identified by
many researchers including Reichheld Conclusion
and Schefter (2000).
This exploratory study has provided an
All e-CRM applications have the potential alternative insight into the classification and
to deliver some form of value to the selection options facing organisations that
organisation. The challenge for organisations intend to adopt e-CRM solutions. While the
is to identify and quantify the impact that a methodology for the study involved analysis
prospective solution would deliver and use of some e-CRM applications, this paper is
this information as a factor in the selection primarily proposal-based and provides a
decision. platform for empirical field-study-oriented
In such an analysis, an organisation may studies. The study indicates a number of
use frameworks such as Porter's five forces implications for both research and practice.
(Porter, 2001) to identify the value from
which they would most potentially benefit by Managerial implications
adopting any particular e-CRM application. In using CRM software applications,
For example, in industries where there is organisations will often be faced with a
strong rivalry with competitors or where choice of different vendors and software. The
[ 576 ]
Dotun Adebanjo ability to select the right solution will impact e-CRM implementation, effects of
Classifying and selecting greatly on the level of success and returns technological solutions on the CRM
e-CRM applications: gained from the application. In particular: strategies of organisations. Furthermore
an analysis-based proposal
. The functional characteristics of the analysis and classification of e-CRM
Management Decision
41/6 [2003] 570-577 applications being considered need to be applications in the context of specific
thoroughly reviewed to ensure that they sectors could be researched with a view to
fit with the organisation's culture and determining if certain sectors are more
processes. This may involve the use of a likely to benefit from the use of certain
cross-functional team. types of e-CRM applications.
. The technical architecture of the
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