Change Management -- a Case Study of British Telecom
Theoretical Perspectives, Concepts and Practices Involved in Implementing a CRM
About British Telecom
British Telecom -- Implementing CRM
CRM Systems -- Data Quality and systems Integration
British Telecom -- A Case Study
Analyzing BT's CRM from an Academic Perspective
An Example of Systems Integration
British Telecom -- Building Customer Relationships
Problems with Implementing a CRM System
Change Management -- A Case Study of British Telecom
Today, when one thinks of British Telecom, the leading telecommunications firm in the united Kingdom, the words that come to mind are likely to be: successful company, preferred service provider, good service, market leader, reliable, financially solvent, satisfied employees. However, this was not always the case.
In 1981, the British government announced its intention to privatize British telecom with the sale of up to 51% of the company's shares to private investors. In 1984, over 50% of the company's shares were sold to the public. The company's transfer continued in 1991 when the government sold about half of its remaining shares, reducing its stake to 21.8%.
1984 regulation provided the company's privatization and terminated its exclusive privilege of running telecommunications systems, in order to establish competition. At this point, British Telecom lost its monopoly in telecommunications systems, and faced many challenges that came with deregulation and increased competition.
To stay afloat and maintain its competitive edge, British Telecom knew that it would have to increase its concentration on customer relationships or risk losing valuable customers to the droves of telecommunications companies that were eager to grab a piece of the market.
For British Telecom, customer relationship management (CRM), a broad solution area that addresses a wide range of business problems or opportunities, was the answer. The company implemented solutions in a variety of CRM areas, including call center to sales force automation, email customer service, customer analysis, telephony, campaign management, customer self-service, interactive sales and support, contact management, Web personalization, and more.
This paper discusses the key aspects of CRM and change management, using British Telecom's implementation of a CRM strategy and how it improved the company's customer service, sales and marketing functions.
CRM is an industry term that describes an organized way for businesses to manage their customer relationships (DeDad, 2000). CRM consists of methodologies, software, and Internet capabilities. Through CRM solutions, businesses can build customer databases that analyze relationships in detail.
Through CRM systems, management, salespeople, service personnel, and customers have increased access to various data, which can be tailored to match the needs of customers. Product plans and offerings, service requirement reminders, and customer's buying habits analyses are just some of CRM's many tools (DeDad, 2000).
By implementing a CRM system, businesses can target their best customers and weed out their worst. In addition, they can improve customer satisfaction (DeDad, 2000). Part of CRM is the ACD (automatic call distributor), which is a facility that handles incoming calls.
In many cases, the ACD handles incoming calls based on the telephone number called and the database that recognizes the number (DeDad, 2000). Many companies, including British telecom, use ACDs to validate callers, make telephone calls, and forward telephone calls to the right party.
A recent report from the Meta Group, an IT consultancy, reveals that approximately 55 to 75% of CRM projects are unable to meet their objectives (Benjamin, 2002). A different study from Gartner reveals that the proportion of unsuccessful CRM projects will increase from about 65% to about 80% from 2002 to the middle of 2003.
There are many reasons for this type of failure in developing and implementing an effective CRM strategy. For instance, many companies that companies implement CRM are not simply replacing existing processes, but also looking at how they can run their businesses differently.
Therefore, in many cases, they do not fully understand what they are trying to achieve or how much time and effort must be invested. Often, companies view CRM as a technology-based solution, when it is actually aimed at customer service, sales and marketing.
Many experts stress that it is important for businesses to understand the meaning of CRM before initiating a CRM strategy. "The single most difficult part of defining CRM is the middle word: 'relationship',' said Ray McKenzie, director of management consultancy DMR Consulting. "The second issue is that, because organizations are complex, they need to identify clearly the fundamentals or principles that govern their CRM strategy (Benjamin, 2002)."
When describing companies as complex, McKenzie points to "legacy environments," where companies often discover that they have many customer databases operating simultaneously or that the company consists of several business lines (Benjamin, 2002).
Also, businesses must address areas like privacy protection, information ownership and consumer protection, and make sure that their CRM systems comply with those regulations. For global companies, this is of utmost importance, as these issues will be handled differently in various areas of location.
For example, British Telecom, which uses a CRM structure provided by BroadVision, had the legacy of a system that operated about 160 websites, each using a range of various applications.
According to John O'Rourke, e-commerce manager for BT.com (Benjamin, 2002): "This made it very difficult to co-ordinate a cohesive, workable model. Working with BroadVision, we have already cut the number of sites by around 20 per cent and we are looking to make a total cut of 80 per cent over the course of the next 12 months."
According to Sims (2000), "everybody who profits from CRM has their own definition of what it is, but they're agreed as to what it is not: CRM isn't about technology any more than hospitality is about throwing a welcome mat on your front porch (Sims, 2000)."
Liz Shahnam, a CRM analyst, describes CRM as "a buzzword that's really not so new. What's new is the technology is allowing us to do what we could do at the turn of the century with the neighborhood grocer. He had few enough customers and enough brainpower to keep track of everyone's preferences. Technology has allowed us to go back to the future to this model (Sims, 2000)."
In its proper context, CRM is simply "a philosophy that puts the customer at the design point, it's getting intimate with the customer (Sims, 2000)."
CRM can be used to determine and study needs and behaviors of customers in an effort to develop stronger relationships with them. Recently there has been a strong emphasis on CRM systems because many business leaders agree that solid customer relationships are the backbone of business success.
According to Deck (2001), while there are many technological components to CRM, it is a mistake to think about CRM in primarily technological terms. Rather, it is more accurate to view CRM as a process that allows companies to utilize information about customers, sales, marketing effectiveness, responsiveness and market trends.
CRM enables businesses to use technology and human resources to learn more about the behavior of customers and how valuable their customers are. A strong CRM system will allow businesses to (Deck, 2001):
provide better customer service make call centers more efficient cross sell products more effectively help sales staff close deals faster simplify marketing and sales processes discover new customers increase customer revenues"
Often implementing a CRM solution can be complex, as it involves more than just purchasing software and installing it. For CRM to be optimally used, an organization has to determine what type of customer information it needs and decide what it intends to do with the data.
For example, an online bookstore might keep track of its customers' recent orders in order to understand what types of products it plans to market to them.
The next step would be to examine "all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used (Deck, 2001)."
Different companies interact with customers in different ways, such as mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts.
Effective CRM systems can link these points of contact together, allowing data to flow easily between operational systems (such as sales and inventory systems) and analytical systems that can analyze these records to find patterns. Company analysts are then able to look through the data to figure out how to increase sales.
CRM solutions allow companies to look at each individual customer and pinpoint areas where better services are needed. "For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her (Deck, 2001).
Some of the types of data CRM projects can collect include (Deck, 2001):