Chapter 9:

Software Tools and Dashboards

Overview

Topics discussed
§ CRM Implementation Options
§ Developing Software In-house
§ Buying Licensed CRM Software
§ Outsourcing a Managed Service
§ CRM Software and Applications
§ Stage-Wise Implementation v. an Enterprise Wide CRM Solution
§ Relationships and Flows between CRM Modules

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 2
CRM Implementation Options

§ Developing Software In-House

§ Example: Facebook
§ Buying Licensed Software
§ Example: Oracle
§ Outsourcing a Managed Service
§ Example: American Express

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 3
Developing Software In-House

Requires the company to define all its requirements, pay for software
development, and internally bear all the R&D costs

§ Advantage:
§ Tailor-made solution fit to the current business practices
§ Develop internal skills that allow them to develop the system each time the
company requirements change
§ Avoid dependence on CRM software vendors
§ Disadvantage:
§ Most Expensive option (high development maintenance, and operating costs)
§ Difficult to attract and retain the employees needed to solve data warehouse
challenges
§ Long time commitment (One to two years)

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 4
Buying Licensed CRM Software

Companies can license CRM software packages, which are sold as a block
(different modules) or as independent modules

§ Advantage:
§ Many of these CRM software packages have a proven record of success
§ CRM vendors will provide knowledge and training for the IT concepts
§ Disadvantage:
§ Expensive option (high initial fees, licensing costs, and maintenance costs)
§ Companies need to develop the IT infrastructure and integrate the new software with
existing applications
§ Each time a new or upgraded version is released, companies have to repurchase and
retrain for them
§ Resistance from employees in terms of adapting to the new system

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 5
Outsourcing a Managed Service

Companies can outsource the CRM solution to a third-party company,

which provides the hardware, software, and human resources in exchange for a
monthly fee.

§ Advantage:
§ Lowest upfront costs: no software licensing fee, hardware system, recruiting, or internal
IT system costs
§ Pay-as-you-go approach: Pertinent for smaller companies or those with limited
marketing budget to benefit from CRM programs
§ Disadvantage:
§ High dependency on the outsourcing CRM company
§ Not viable for companies who need specific requirements in their CRM package

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 6
Decision Process for Implementation

Stage wise
implementation

Purchase and
install a complete
CRM solution
from a vendor
Implement an
Implement a enterprise wide
CRM project CRM Program
Entirely
Decision to Yes
implement CRM outsource the
CRM application
Do not process
implement a
CRM project
No

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 7
CRM Software and Applications

Stage-Wise Implementation vs. an Enterprise Wide CRM Solution

§ CRM industry mainly offers two types of CRM software solutions based on the company’s
needs and processes:
§ Stage Wise Implementation:
§ Offered in different and independent modules
§ Each module is adapted to a specific department needs
§ Ex) the company buys the sales automation software and the contact management
module from different providers
§ Enterprise Wide CRM Solution
§ Composed of different modules from the same provider
§ Modules may be adapted to each department’s needs, yet they are implemented
as a whole

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 8
CRM Software and Applications

Relationship and flows between CRM Modules

§ CRM modules, whether implemented independently in phases or together in a

global solution, need to be integrated to have an integrated view of the customer

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 9
CRM Software and Applications

§ Example of an Integrated CRM Configuration

Customer Contact Strategy
Call Center Store Sales Force Online Sales
Management Management

Data Mining Analysis

Business Customer Sales Force
Intelligence Service Management

Data Distribution Hub

Business Processes

Accounts
Distribution Sales & Billing
Payable/ Production
Marketing
Receivable

Customer Feedback

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 10
Summary

§ CRM provides capabilities for firms to optimize their marketing budget and increase
revenue, however poor CRM implementation can have negative outcomes.
§ CRM implementation strategies are: (a) develop in-house software, (b) purchase licensed
software from a third party vendor, and (c) outsourcing to a managed service
§ These strategies can be implemented via:
§ Stage wise implementation, which takes longer but allows firm to take
implementations one step at a time
§ Enterprise-wide implementation, which is more risky but allows the firm to take
advantage of the whole system’s benefits much sooner

V. Kumar and W. Reinartz – Customer Relationship Management: Concept, Strategy, and Tools, 3rd Edition 11
International Perspectives: Did you Know?

§ Implementing CRM globally has greater challenges and complexities

§ Language barriers
§ Colloquial nuances of doing business
§ Will require CRM software producers to understand its global firms
n Example: India

§ Localization: Process of translating software into the native language where being
implemented
n Some countries have laws that require this process

n Example: Microsoft Dynamics AX

§ CRM systems can have severe performance issues in certain regions of the world
§ Internet speed must be considered
§ Example: South Korea

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