Does Business Strategy Play a Part in CRM Implementation  Essay

Excerpt from Essay :

Business Strategy play a part CRM implementation ?

The role of business strategy in CRM implementation

The economic agents of today are obliged to answer a wide array of complexities in order to attain their professional objectives. They are for instance forced to answer the growingly complex demands of the customer base. Then, they have to continually review and top the strategies implemented by the competition. They also have to operate in a manner which is socially and environmentally responsible in order to ensure that they have a positive image within the community and they also enjoy the acceptance of the public. At the level of the staff members, they have to ensure that they hire and retain the best employees, that they train their employees, that they satisfy them and that they capitalize on the investments with the personnel.

Overall then, the economic agent of the modern day society has to complete the business operations in a means in which it simultaneously ensures the satisfaction of as many stakeholder categories as possible -- customers, employees, general public, governmental agencies, non-governmental institutions and so on. In order to do so then, economic agents create complex and multifaceted business strategies. And the business strategies must as such be comprehensive and integrated so that they are able to support the attainment of the organizational goals, but in a means which ensures stakeholder satisfaction.

In line with this realization, the current project strives to assess the relationship between the business strategy and the implementation of Customer Relationship Management. Specifically, emphasis is placed on the role of business strategy in the implementation of CRM. In order to do so, the first step is represented by the comprehension of the two concepts -- business strategy and CRM -- followed by the presentation of the relationship between the two. Ultimately, the cases of CRM at Apple Inc. And Dell Inc. are presented in order to give application to the findings and place the role of business strategy in CRM implementation within the context of real life situations.

2. Business strategy

The business strategy is generically accepted as a process of decision making by which the economic agent strives to attain its objectives. The community of specialized literature sources has yet to come to the creation and agreement of a universally valid definition and this failure could be explained from two distinctive angles. First of all, the concept of business strategy is common within the modern day society and its meaning is often self implied, without generating a need for a specific definition. The second explanation is represented by the fact that the concept of business strategy refers to a myriad of organizational features and processes, which differ from one economic agent to the other, which are based on specific particularities and which are implemented differently. In such a context then, it is believed that the business strategy integrates too many elements for it to be defined within a strict and limited set of expressions.

In spite of these beliefs however, some sources have in fact provided the readers with definitions of the concept of business strategy. In this order of ideas, according to the Rapid Business Intelligence Success website, the business strategy is understood as:

"A long-term plan of action designed to achieve a particular goal or set of goals or objectives. Strategy is management's game plan for strengthening the performance of the enterprise. It states how business should be conduct to achieve the desired goals. Without a strategy management has no roadmap to guide them."

3. Customer Relationship Management

Unlike the concept of business strategy, which does not enjoy many definitions, the concept of Customer Relationship Management is characterized by numerous definitions within the specialized sources. Some of the most notable of these definitions include the following:

Customer Relationship Management represents "a management philosophy according to which a company's goals can be best achieved through identification and satisfaction of the customers' states and unstated needs and wants" (Business Dictionary).

"CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way" (Search CRM).

Customer Relationship Management "is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success" (Wailgum).

Overall, however the terms actually used in the creation of a definition for the concept of Customer Relationship Management differ, the definitions virtually reveal similar meanings of CRM -- a system used in the management of the relationship with the customers, aimed at better understanding and serving customer needs. This system is composed from both traditional approaches, such as basic communications with the customers, but also more technology driven interactions, such as the creation of a database with customer information. Regardless of the actual processes actually implied in the implementation of CRM, fact remains that the success of the process is directly linked with the integration of CRM within the overall business strategy.

4. Discussion on the role of business strategy on the implementation of CRM

At a generic level, the role of the business strategy is that of promoting the gradual steps which ultimately ensure that the company attains its pre-established objectives. The business strategy allows the company to assess its performance and the means in which it has managed to attain its objectives through time. Also, the business strategy integrates all company players into a single and unified effort which increases the chances for attaining the objectives. The business strategy motivates, informs and stimulates change.

"A business strategy is necessary to maintain a business' performance. Business strategies are motivating, informational and change-stimulating. If you aren't motivated to form or complete the business strategy to see an end result, your business will most likely fail. A business strategy is also a wonderful tool to use when monitoring how well your business is doing over time and deciding the next step to take in your business in order to be successful" (Crowe).

From this standpoint then, it can be argued that the business strategy plays an important part in the management of the human resources, which in turn play an essential part in the final satisfaction of the customers. This is true for all modern day companies, but even more so for economic agents which do not offer a material product, but which deliver services, and where the final satisfaction of the customers depends directly on the quality of the employee efforts. And the importance of employee satisfaction for customer satisfaction is increasing as more and more companies move from production to services. At a global level for instance, 63 per cent of all output is generated by services, with agriculture and industry accounting only for 37 per cent. Within the more developed economies, the percentages are even more shifted in favor of services. In the United States for instance, 76.7 per cent of the gross domestic product is generated by services, with the remaining 23.3 divided as follows: 1.2 per cent agriculture and 22.2 per cent industry (Central Intelligence Agency).

In a context in which customer satisfaction is strictly pegged to employee performances, the business strategy provides a new mechanism of managing the employees so that they increase their performances and better ensure the adequate implementation of CRM. At this level then, the business strategy impacts the implementation of the Customer Relationship Management through the lenses of the employees by motivating them, by informing them and by stimulating change processes. Each of these features is detailed below:

Employee motivation is necessary to get the staff members to enhance their performances in the direction of better interacting with the customers, better understanding and serving their needs. The business strategy as such

Informing the employees is an essential part of the CRM process and it provides the company with staff members that are well documented and aware of the importance to serve customer needs. Instead of having the employees blindly implement the strategies decided at a managerial level, HRM ensures that the employees understand the need for the strategies to be implemented in CRM, as well as the importance of implementing them to ensure customer satisfaction.

Finally, Customer Relationship Management is an ongoing effort to ensue customer satisfaction. This feature of CRM specifically means that change is always incurred as new decisions are made and new processes are implemented to ensure customer satisfaction. But the staff members are reticent to change and do not like to encounter modifications in their operations. This reticence to change can be pegged to a series of elements, such as fear of the unknown or the sense of being uncomfortable with novelty, fear of somebody else taking their position and so on. Adequate human resource management then informs the staff members of the need for change, involves them in the change process and stimulates the introduction of change by reducing employee resistance to it. This virtually means…

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