CUSTOMER RELATIONSHIP & KNOWLEDGE MANAGEMENT

Increasing competition & decreasing customer loyalty have led to the emergence of concepts that focus on the need to bulid & nurture a relationship with customers. Customer Relationship Management (CRM) has emerged as an amalgamation of different & information system approaches such as Computer-Aided Selling (CAS) & Sales Force Automation (SFA).

Knowledge Management (KM) perceives the knowledge available to a company be a major success factor. Through superior knowledge, companies can achieve their results faster, at a lesser cost & by offering higher quality than their competitors. Knowledge about customers, markets & other relevant factors of influence allows faster utilization of opportunities & more flexile reaction to threats.

The concepts of CRM & KM have recently been gaining wide attention in business. Both approaches focus on allocation of resources to supportive business activities in order to gain competitive advantages.

CRM The origins of CRM can be traced to the management concept of relationship marketing. As an interactive process, aimed at achieving an optimum balance between corporate investments & the satisfaction of customer needs, CRM is intended to generate maximum profit.

In order to integrate marketing, sales & service activities, CRM requires a strong integration of the business process, which involves customers. These front-office or CRM processes are mostly unstructured & non-transactional. Their performance is predominantly influenced by the underlying supply with knowledge about products, markets & customers.

CRM processes can be considered to be knowledge-oriented processes. Knowledge flows in CRM processes can be classified into the following three categories:

1) Knowledge for Customers: Knowledge about products, Markets & suppliers. 2) Knowledge about Customers: Knowledge about customers histories, connections, requirements, expectations & purchasing activity. 3) Knowledge form Customers: Interaction with customers to gather knowledge about products, suppliers & markets to facilitate continuous improvement.

Managing these different knowledge flows is of the biggest challenges of CRM. Building a Customer-Oriented Knowledge Model (CKM): Knowledge is created, located & captured, disseminated, modified & used constantly within all CRM business process. However, CRM does not require self-oriented KM processes. Instead, it requires goals for managing the knowledge that is critical for it business processes.

Goals of CKM
The CKM model, therefore, the KM process perspective of ontological KM models into a KM goal perspective. The KM goal perspective offers process owners different options to focus on when managing critical knowledge entities. The CKM goal perspective encompasses four goals, which are listed ahead:

I.

The goal of knowledge transparency supports the execution of business process in defining their requirements concerning the manageability of customer knowledge. A high of manageability requires a high degree of transparency.

II.

The goal of knowledge dissemination supports the business process owners in defining the degree of customer knowledge distribution required among all individuals who take place in process activities. The management of dissemination requires the management of knowledge transparency.

III.

The goal of knowledge development supports the business process in defining the requirements concerning the adaptation & creation of knowledge. While knowledge can be created by an individual based solely on his or her own context, the development of valuable customer knowledge from a CRM process perceptive requires the ability to disseminate knowledge between individuals. The management of knowledge

development, therefore, necessitates the management of knowledge dissemination.

IV.

The goal of knowledge efficiency is based on the diminishing marginal utility of customer knowledge. The goal of knowledge efficiency supports the business process in selecting the knowledge crucial for the CRM process from the large body of knowledge available. Knowledge efficiency require the manageability of knowledge development, because it necessitates a high level of understanding of current & future customer needs, which is essential for enhancing the CRM processes.

The 4 management goals constitute a cascading framework for analyzing the customer knowledge requirements of a CRM business process.

Framework for CRM

This framework serves as a guideline for practitioners & thereby helps to alleviate the gap between the benefits that are known in theory & in successful practice cases on the one hand, & a still very low level of broad CRM process implementation that are identified. The elements of the framework are: Strategy: Perceive customer knowledge as a valuable source of product innovation & process improvement: In order to harness the potential of CRM processes & their support by adequate systems use, top management has to recognize their customers as a valuable source of knowledge rather than a burden. This perception formed the basis of an organizational connection between customer care & product development in order to access incoming customer ideas & suggestions for product innovation & service improvement. Processes: Aligin KM activities seamlessly with CRM processes, CRM processes are best enabled by customer knowledge if the supportive KM processes are lean & tightly integrated into a relationship managers actual work. Effort to support the customer contact center with relevant knowledge could be reduced significantly. The issue of KM as a separate task thus loses prominence. Systems: Create an integrated knowledge repository across organizational boundaries, an integrated view of the relevant customer data as well as an integration of the relevant systems has been a critical success factor.

 Change Management: Encourage relationship managers to capture & disseminate customer knowledge. Besides perceiving the customer as a valuable source of knowledge, top management is also challenged to encourage an organizational culture in which employees are willing & motivated to share their own knowledge from & about customers with others & to make use of knowledge provided by others.

Strategy Encourage Relationship managers to capture & disseminate customer knowledge. Perceive customer knowledge as a valuable source of product innovation & process improvement.

Change Management

Process Align knowledge management activities seamlessly with CRM processes.

Systems Create an integrated knowledge repository across organizational boundaries.

Conceptual Framework for Knowledge-based CRM

CRM, Customer Knowledge & Knowledge Goals

CRM manages knowledge for, from & about the customer, symbolizing a customer lock-in through superior services & products.

Knowledge for customers is mainly generated in processes within the enterprise, such as research & development production. Campaign management is responsible for collecting this knowledge & refining it in keeping with the customer requirements. It is then distributed to the other CRM processes, mainly offer management, contract management & service management (see figure) CRM manages knowledge transparency & the dissemination of knowledge for customers. The main challenge is to maintain the balance between comprehensibility & precision when managing this kind of knowledge:

Campaign Management

Marketing
Lead Management

Sales

Offer Management Contract Management Interaction Management Service Management Complaint Management Channel Management

Service

Opportunity Management

Content Competence Collaboration CCCCCCCoCCCccCCXCCcccCCCCCCCompositio

Composition

Customer Knowledge Management

Knowledge about customers is captured is captured mainly by offer management, service management & complaint management, & if available, contract management. The main user processes of knowledge about the customer are campaign management & service management, because both processes personalize their services on the basis of user criteria. Knowledge about the customer must be transparent within the company; however, its dissemination beyond of an organization must be controlled, as knowledge about the customer can often be directly transformed into competitive advantages.

Knowledge from customers can be captured in similar ways as knowledge about customers. Gaining Knowledge from customers is based on the fact that customers gain their own expertise while using a product or service & can be seen as equal partners, when discussing changes or improvements. This aim is not commonly understood in the business world & its impact is poorly researched in the academia. In order to utilize this knowledge from outside experts acting as change agents, it must be channeled into the back-end processes of an enterprise, such as the research & development process.