The importance of effective customer relationships as a key to customer value and hence shareholder value is widely emphasized (Wilson, Daniel and McDonald 2002;
Payne 2006). Relationship marketing is concerned with how organizations manage and improve their relationships with customers for long-time profitability (Grönroos 1994; Ryals and Payne 2001). Over the past ten years using information technology (IT) in its many forms in implementing relationship marketing strategies has received particular attention (Ryals and Payne 2001; Romano and Fjermestad 2001;
Puhakainen 2003). Customer relationship management (CRM) uses IT in implementing relationship management strategies, and it may allow companies to gather customer data swiftly, identify the most valuable customers over time, and increase customer loyalty by providing customized products and services (Rigby, Reichheld and Schefter 2002). CRM may also reduce the costs of serving these customers and make it easier to acquire similar customers in the long run. However, it has been shown (Bhatia 1999; Peppard 2000; Yu 2001; Abbott, Stone and Buttle 2001; Bose 2002; Starkey and Woodcock 2002; Croteau and Li 2003; Fjermestad and Romano 2003; Wikström 2004) that CRM may often fail to produce the expected results.
According to a survey by CRM Forum (in Rigby et al. 2002), when asked what went wrong with their CRM projects, 87% of the managers pinned the failure of their CRM programmes on the lack of adequate change management. When organizations start to adopt relationship marketing strategy, it often implies a need to transform the marketing, sales and service processes from product orientation into customer orientation (Goodhue, Wixom and Watson 2002; Corner and Hinton 2002;
Plakoyannaki and Tzokas 2002; Rigby et al. 2002). Change is seen as a necessary prerequisite to make the selected relationship marketing strategy work in practice, which implies the need for planned change. However, change in its many forms - not forgetting emergent change (Markus and Robey 1988) - has not been thoroughly investigated as a potential factor affecting successful CRM. I have therefore chosen to select organizational change as one of the main objects of my exploration into CRM success.
In the study of CRM projects by The Data Warehousing Institute (TDWI Industry Study 2000, p. 13) 41 percent of the surveyed organizations had been either
“experiencing difficulties” or had a “potential flop”. Moreover, the risk involved in IT implementations has been covered in many research projects (Lyytinen, Mathiassen and Ropponen 1998; Markus 2004). Markus (2004) has suggested that
one avenue of reducing risk is to apply “prototyping” techniques. The goal of reducing risk of failure may be for a company the main motivation to rely on piloting, but there might be other motivations: the fear for resistance, the need for gaining organizational commitment, and the uncertainty which surrounds the whole concept of CRM. In order to investigate the phenomenon of piloting as a potential CRM success factor, I decided to include a case study of CRM piloting in this dissertation. As a research approach I have in my case study applied design science.
This is a new research approach in the field of CRM.
The change of the marketing, sales and service processes may have an effect on various organizational tasks, roles and employees’ job descriptions. The human beings carrying the roles of sales people, service persons or managers are affected.
CRM initiatives have become strategic in many companies (Yu 2001). Markus (2004, p. 2) argues why using IT strategically to drive organizational performance improvements involves great potential impacts on “the users” (people, processes and organizational performance). Inherent in the notion of “the users” the human being is seen as an actor, which is in accordance with the tool perspective of computer artefacts: people use IS as tools for something they consider worth doing. Other authors directly or indirectly include the notion of the human being in their models of successful CRM. Plakoyiannaki and Tzokas (2002, p. 233-234) talk about the importance of “learning capabilities” and “operational capabilities” like skills developed at functional and administrative levels. Chen and Popovich (2003, p. 675) introduce “people as critical components to successful CRM implementations”.
Fjermestad and Romano (2003) suggest that usability and “resistance” would be factors affecting successful CRM implementations. Boulding et al. (2005, p. 155) note that “as little is known about how people issues connect to the success of CRM activities, we believe that this is an area worthy of researcher attention”. Payne and Frow (2005) have developed an extensive conceptual framework for CRM, but they have left out the human issues altogether. However, they do emphasize that human issues are a priority area for further research (Payne and Frow 2005, p. 167): “CRM can fail when a limited number of employees are committed to the initiative; thus, employee engagement and change management are essential issues in CRM implementation”. As the full potential of humans has not been taken into account in the CRM implementation success research, I decided to, from a holistic (Isomäki 2002) perspective, study the image and the qualities of the human being as a CRM implementation success factor.
To conclude I shall investigate the potential factors affecting successful CRM from three perspectives: firstly from the perspective of organizational change and how it takes shape in the CRM context; secondly, how the introduction of the very CRM application in the organization (in the form of piloting CRM) may support or hinder successful CRM; thirdly, what is the image of the human being in the context of CRM and what are the human qualities present in the earlier research on CRM implementation success. In the next section the core concepts of relationship marketing, customer relationship management, CRM success and organizational change are analyzed. In the section thereafter I shall present my research approach and the research framework. Thereafter I shall present my published research reports, which are linked to this framework. Finally, I summarize the implications of
my study to science and practice, present the limitations of the study and suggest ideas for future research.