Chapter 9: Software Tools and Dashboards

2 V. Kumar and W. Reinartz – Customer Relationship Management 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

3 V. Kumar and W. Reinartz – Customer Relationship Management CRM Implementation Options  Developing Software In-House  Buying Licensed Software  Outsourcing a Managed Service

4 V. Kumar and W. Reinartz – Customer Relationship Management 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)

5 V. Kumar and W. Reinartz – Customer Relationship Management 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

6 V. Kumar and W. Reinartz – Customer Relationship Management 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

7 V. Kumar and W. Reinartz – Customer Relationship Management Decision to implement CRM Implement a CRM project Do not implement a CRM project Purchase and install a complete CRM solution from a vendor Entirely outsource the CRM application process Yes No Stagewise implementation Implement an enterprise wide CRM Program Decision Process for Implementation

8 V. Kumar and W. Reinartz – Customer Relationship Management 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

9 V. Kumar and W. Reinartz – Customer Relationship Management 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

10 V. Kumar and W. Reinartz – Customer Relationship Management CRM Software and Applications  Example of an Integrated CRM Configuration

11 V. Kumar and W. Reinartz – Customer Relationship Management 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