Evolution of CRM from its inception to modern times

Discuss about the Relationship Management Of Russia Market.

The changes in the buyer seller model led to the need of Customer Relationship Management (CRM) (Kumar, Vineet and Werner). The shift from the marketing behaviour and transactional sales to a customer centred model began in 1970. The relationship manager and the acceleration of the technology incorporated further changes in CRM during the 1980s and the 1990s. During the year 2000s, the internet complexities, advances in the social media technology and the empowered behaviour of the customers completely changed the model. The results implied a shift of the perspective regarding how the consumers address the major business assets. However, the CRM strategies for project implementation include (Turnbull, Peter  and Jean ):

1. Governing the satisfaction of the customers beyond the development of good services and products
2. Ensure retaining the existing customer for maximization of the efficiencies and reductions of the acquisition cost.
3. Improvement in the overall relationship between specific audience and business entity

However, a different level of consumer relationship values is necessary in order to concentrate on individual needs of specific segment of the customers. This implied that customer loyalty and satisfaction held more importance to the business metrics compared to the delivery of the services and the products (Khodakarami, Farnoosh, and Yolande). Such experience  was carried under a huge technological vacuum where the implementation of the advanced software  not only reduced the cost of doing the business but at the same time enhanced  the service and  quality  expectations. Economic instability during the late 20^th and the 21^st century created challenges for the existing marketing and sales trend for gaining newer customers as well as trends. Maximization of value of the existing customers and reaping of the bottom line benefit of the strategy helps in stemming the economic hardships.

However, for dealing with complex issues related to the identification the implementation of accurate CRM program, formation of a task force consisting of the employees belonging to the managerial level is necessary. The larger firms posses the resource necessary for the buying of a comprehensive custom systems while the smaller firms focuses on lower cost, products off the shelf, modification of the product development of the other firms and building of a in-house system.

In the context of Russia although CRM is a comparatively newer concept, there has been consideration of various CRM strategies by the telecommunication and the finance industry (Gibbs, Tanya, and Nicholas). In July 2009, the CRM Association formed for addressing the needs of the CRM market of Russia. The activities of the association included conducting discussions, conferences and forums, assisting the organizations with necessary training, distributing publication for increasing awareness of CRM in the business practice along with conducting research. Thus, the overall goal of the CRM association lay in not only building CRM awareness but also in sharing the appropriate practices and the technologies.

Importance of customer loyalty and satisfaction in CRM

In the first CRM congress held in Moscow in the year December 2013, only the best CRM projects of Russia became a part of the discussion relating to the CRM approaches and the system. There were over 350 top managers from the international and Russian companies taking part in the discussion. The industries included pharmaceutical, financial services, telecommunication and marketing. There was another conference held in Russia on March 2005 conducted by Microsoft Corporation along with DataArt that addressed development of the newer CRM solutions. The global business technology event with support from American Chamber of Commerce also held in Russia in the year, April 2014 that put forward opportunities for the international companies in examining the market of Russia along with the latest technology available in CRM area.

Mashkin, a completely owned subsidiary of the Amir Inc, represents medium sized asset management group located in United States (US). The firm consisted of three key divisions, which included a mutual fund company with close to $10 billion assets, an asset management company with assets close to $ 15 billion and financial service company.

The technology system used by the employees of the Mashkin supported only the general activities of sales. There was no single software designed specifically for meeting the needs of the financial division and did not have analytic or collaborative functionality for interfacing with the other systems of Mashkin. The limitation in the functioning of the technologies forced the employees in spending unreasonable effort and time while manually jumping between the applications and the creation of the newer reports for exporting and importing data between the applications that lacked current integration. Thus, the management realized that it was important as well as a necessity in implementing comprehensive CRM strategy with specific technology for meeting the needs of the financial division that included both mutual fund and asset management (Payne, Adrian, and Pennie). The three companies under Mashkin shared similar objectives for adopting the newer approach to CRM. These objectives included (Law et al.):

1. Providing superior quality service to the customers in addition to providing benefits of the core products
2. Identification of the focus areas and the capability of retaining the customers
3. Development of the customer profiles
4. In improving the workflow and the managerial decisions

The reasons for failure of the CRM implementation were due the cost that was substantially higher than what was budgeted (Rahimi). Controversial issues related to cost over runs surfaced at every meeting. The process of data transfer involved the transfer and aggregation of the thousands of client files with their profiles and contact notes that lacked chronology. The lack of the chronology meant that users had to search through the years of the notes for locating the recent entries and moving them to the top for ensuring usability (Keramati et al. ). The most effected files belonged to the long time clients who did business with the firm for more than 10 years. The files of such clients were lengthy so too much navigation for data transfer not only made it difficult but also cumbersome. The individuals responsible for undertaking the heavier sales volume and thereby attempting to glean the usable data of the scrambled files were the most affected. Thus, CRM implementation declined further due to the reduction of the user efficiencies.

Challenges faced during CRM implementation

Another shortcoming of the CRM implementation lay in the user training. Although the firm initiated online training of the sales personnel through the new system but it primarily depended on the on demand user training and had no proper structure in determining the completion of the training of the employees (Rahimi and Ebru). As older employees left and replaced by the newer ones, the process of training got reduced to the few minute demonstration of the associate to the newer employees who were finally had to figure out the system themselves. In addition, although there was an implementation of the integrated CRM framework specific to financial industry, the sales people and the financial advisors did not use it. These users preferred the old technologies instead of the CRM system. Thus, the outcome result of implementation of CRM at Mashkin resulted in lost time, wasted money and employee confusion, a complete opposite result of what was expected (Dorantes et al.).

The concept of CRM is new to Russia and started gaining recognition in the early 2000. The telecommunications and the finance industries are one of the largest sectors presently employing the strategies of CRM (Pau). The two telecommunications companies using strategies in Russia includes, Svyazinvest and MegaFon-Moscow.

Svyazinvest represented a joint company related to telecommunication investment formed through the consolidation of the shares owned by federal government in the regional telecommunication operation during the privatization of telecommunication sector (Alipour et al.). In fact, Svyazinvest represents one of the largest holding companies of telecommunication across the world. The company ensures incorporating seven major telecommunications operations along with international and national long distance operations. The subsidiaries of the holding company operate publicized telephone networks having capacity of more than 32.4 million telephonic lines. In the year 2005, the company in collaboration with IBM and Amdos started one of the largest CRM billing projects in Russia. The project replaced over 180 billing system of Svyazinvest across close to seven nations along with products of Amcos that included implementation of the new data and the voice services for the subscribers. The implementation of the CRM project conducted in various phases that included introducing a   single billing system across the operations of the company.

The new CRM related technologies and strategies provided the firm with an ability of connecting the different operations found in varied geographic regions under a single platform. This will enable the employees in getting a complete view of the consumers. The implementation of the newer technologies will ensure competitive advantage of the company through the development of an effective and efficient infrastructure for providing higher quality telecommunication services to the subscribers (Cheng and Chih).

Case studies of successful CRM implementation in Svyazinvest and MegaFon-Moscow

The other company is MegaFon-Moscow that represents a division of MegaFon Group Telecommunication Company that is one of the first operators of Global System for Mobile communications (GSM) operator in Russia (corp.megafon.com). MegaFon Moscow represents is one amongst the three-telecom service providers known for its wireless network coverage in Moscow. In the recent years, there has been a tremendous growth in the market for cell phone. This had led to over five million subscribers of the company. In the year March 2005, the management of the company undertook a decision of implementing CRM technology of Amcos. The automation led to various advantages to the company. This included time saving for the consumers who are making calls to the call centre, an enhancement in the number of calls taken by the consumers and betterment in the call routing structure. The new CRM technologies thus enabled the MegaFon-Moscow in linking the call centres to the stores by providing better access to then data related to the customer information. The CRM system also helped in consolidating the data of the company into an unified platform that fully integrated with existing system of billing. The system also enabled the customer service employees in receiving faster access to the customer data thereby allowing them in responding quickly to the customer request and providing a higher level of service to the customers.

The collapse of Soviet Union in the year 1991 led to the market reform in Russia that has resulted in dramatic changes to the business environment (Hanson). The economic reform led to huge transfer of the government ownership to private ownership. In the changing conditions of the economy, firms in Russia adopted newer means of doing business.

The additional challenges faced by the companies in Russia in the implementation of the CRM projects include (Lobato et al.):

Appointment of Core CRM Team:

The major problem faced in the implementation of CRM is that most it is assumed as an IT project. Therefore, it is very necessary for the company in employing core team that would work with the stakeholders, customer support professionals, senior executives and the end users in understanding requirements. Clear understanding of the objective will allow IT team in engaging in CRM implementation .Since CRM is very new concept in Russia so the companies might face a challenge in appointing a core teams.

Clear Definition of the Processes:

Russia might face a challenge in defining the processes given the fact that it is a very new concept. The process of implementation of CRM should be clear for ensuring its success. The good practice involves the creation of a central repository and accessibility to all that helps in storing process definitions. This makes the document available for anyone who uses the system.

Management of Application:

CRM being a newer concept, Russia might face challenge in managing the application. Once the process of CRM is implemented it is necessary for aligning it to the culture of the company. Mapping business operations with the applications of CRM enables the end users in performing operations on a day-to-day basis through using CRM application even by default and thereby keeping track of every possible activity via a single platform.

References:

Alipour, Siamak, et al. “Customer Relationship Management (CRM) and Its Impact on Performance Improvement of Companies in Iran Telecommunications.” Singaporean Journal of Business, Economics and Management Studies 51.1112 (2013): 1-5.

Cheng, Lai-Yu, and Chih-Wei Yang. “Conceptual analysis and implementation of an integrated CRM system for service providers.” Service Business 7.2 (2013): 307-328.

corp.megafon.com. N.p., 2018. Web. 30 May 2018.

Dorantes, Carlos?Alberto, et al. “The effect of enterprise systems implementation on the firm information environment.” Contemporary Accounting Research 30.4 (2013): 1427-1461.

Gibbs, Tanya, and Nicholas J. Ashill. “The effects of high performance work practices on job outcomes: Evidence from frontline employees in Russia.” International Journal of Bank Marketing 31.4 (2013): 305-326.

Hanson, Philip. The Rise and Fall of the The Soviet Economy: An Economic History of the USSR 1945-1991. Routledge, 2014.

Keramati, Abbas, et al. “A novel methodology for evaluating the risk of CRM projects in fuzzy environment.” Neural Computing and Applications 23.1 (2013): 29-53.

Khodakarami, Farnoosh, and Yolande E. Chan. “Exploring the role of customer relationship management (CRM) systems in customer knowledge creation.” Information & Management51.1 (2014): 27-42.

Kumar, Vineet, and Werner Reinartz. Customer relationship management: Concept, strategy, and tools. Springer, 2018.

Law, Agnes KY, Christine T. Ennew, and Darryn Mitussis. “Adoption of customer relationship management in the service sector and its impact on performance.” Journal of Relationship Marketing 12.4 (2013): 301-330.

Lobato, Fábio, et al. “Social CRM: Biggest Challenges to Make it Work in the Real World.” International Conference on Business Information Systems. Springer, Cham, 2016.

Pau, L. F. “Telecommunications in Russia: evolution over 20 years.” International Journal of Electronic Finance 7.1 (2013): 48-81.

Payne, Adrian, and Pennie Frow. Strategic customer management: Integrating relationship marketing and CRM. Cambridge University Press, 2013.

Rahimi, Roya, and Ebru Gunlu. “Implementing Customer Relationship Management (CRM) in hotel industry from organizational culture perspective: Case of a chain hotel in the UK.” International Journal of Contemporary Hospitality Management 28.1 (2016): 89-112.

Rahimi, Roya. “Organizational culture and customer relationship management: a simple linear regression analysis.” Journal of Hospitality Marketing & Management26.4 (2017): 443-449.

Turnbull, Peter W., and Jean-Paul Valla. Strategies for International Industrial Marketing (RLE International Business): The Management of Customer Relationships in European Industrial Markets. Routledge, 2013.