Lecture 3

Implementing CRM Projects

1. Objectives

- Describing and understanding what does deploying a CRM project involve,

including developing the CRM strategy, creating the CRM project foundation,
identifying necessities, selecting the partners, implementing the project and
performance evaluation.

- Discussing the databases in the CRM context by defining the database

functions and information requirements, identifying the information sources,
populating and maintaining the database.

- Presenting other database considerations like data attributes integration, access

and interrogation.

- Discussing some considerations regarding privacy and data protection.

 Implementing CRM Projects

2. Implementing CRM Projects

2.1 Deploying CRM projects

At this point CRM is on declarative level of its potential which is looking promising.
The question should be if it can indeed do what it proposes to do. There are many
companies which after implemented a CRM system their services didn’t improve [and02].
Their belief is that the problem resides in confusing strategy with technology. For us, the
complexity of CRM and the multitude of factors which should be considered when
deploying a CRM system should be clear.

[but09] presents five major steps which should be followed during a CRM
implementation together with process and tools for supporting the CRM’s objectives.
These steps are listed next and some of them could be skipped based on the scope of the
project:

1. Developing the CRM strategy – the action plan at the top level which will align
processes, people and technology to achieve customer relationship goals:

 Situation analyzes – describing, acknowledging and evaluation of the

current strategy. Models presented previously could help and
could be a starting point;

 Setting out the CRM education – as presented in the introduction of

CRM, there are many opinions and views about what CRM
represents, among people who should get involved in CRM
deployment. Therefore, it is very important that everybody
have the same understanding about the language and
procedures used;

 Developing the CRM vision – this will create the form of the strategy
and simulates it on a higher level, foreseeing the expected
results.

 Setting priorities – by this point the ratio between potentially benefits

of intended measures (actions) within the strategy and their
cost should be known, therefore some priorities will appear.

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  Establishing objectives – which should emerge from the vision and
priorities. Objective should have some form of quantification to
be measured and evaluated in time, but not all are able to be
measured (recall the Einstein's words: “Not everything that
counts can be counted, and not everything that can be
counted counts”).

 Identifying process, people and technology requirements – at this

point it should be on a general level because it is very possible
to return to this stage during CRM deployment. But it is
important to have a general idea of resources involved and
what changes should be done.

 Developing the business case – which should offer the information

about feasibility and worth of deployment. Investing in
technology for CRM could be very costly but with the new
approaches as SaaS it could be easily traced a cash flow
scenario of the business case especially because of the
smaller span time. An initial intensive capital investment could
require a long-term plan for evaluating the feasibility which is
much difficult to estimate.

2. Creating the CRM project foundations – on which the CRM implementation will lay.

 Identifying stakeholders – represented by anyone which will be

affected by the change. Like in the Lean Six Sigma, it is a
good thing to involve everybody affected by the change
(“engagement”). The same thing is applying here.

 Establishing the hierarchical infrastructure – with well defined roles

and responsibilities. The place of the champion within the
Lean Six Sigma approach is taken here by the program
director (PD), but the same philosophy of selecting people
used there could be applied also here. Because CRM is
technology intensive, special attention should be paid to IT
specialists who will be deeply engaged in the deployment and
could miss other duties.

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 Implementing CRM Projects

 Identifying the aspects of change management – the new strategy will

yield a new way of operation which at its turn will trigger major
changes usually discussed by change management field.
Organizational culture and culture in general are important
factors here.

 Identifying requirements of project management – as any project,

implementing CRM will demand project management skills
and tools. The project management should be able to capture
the situation, analyze and track the path to strategy’s
objectives and business vision.

 Identifying critical success factors (CSFs) – [but09] states that “CSFs

are attributes and variables that can significantly impact
business outcomes”.

 Develop risk management plan – which should identify vulnerability of

initial strategy and develop methods for reducing their
potential.

3. Indentifying necessities and selecting the partners

 Process mapping – which is referring to layout and flow studied in

operations. In the CRM the typical terms for describing
processes types, layouts and flows are used, as following
[but09]:

 Type:

 Primary – having major costs or revenues for the

company given the impact on customer
experience;

 Secondary – having minor implications in relation

with the above processes.

 Layout:

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  Vertical – situated entirely within one
organizational function.

 Horizontal – is cross-functional;

 Front-office – having direct interaction with the

customer.

 Back-office – is invisible to customers.

 Flows – which are rated as:

 Best practice – is contributing to CRM

performance and is superior to the
competitors’ corresponding process in
terms of outcomes;

 Parity – is contributing to CRM performance and

is considered a good process but not
superior than the one the competitors
have;

 Stability – is achieving its expectations but has

room for improvements;

 Recoverability – has identified problems but they

are under correction;

 Criticality – is an inefficient process which

requires immediate remedial attention.

 Data required and gap analyzes – will address information which will
be desired to be known and which could be acquired. The gap
refers to the difference between them;

 Initial technology needs specification and research alternative

solutions – a step forward will be made to the initial technology
identification. At this point a decision should be made whether
to develop a proprietary CRM application, to purchase one or
to rent one. Today open-source solutions have a major impact
on this decision. There are more and more companies which
are opting for renting (hosted or online) CRM applications;

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 Implementing CRM Projects

 Write request for proposal (RFP) – if the objective is to find the proper
partners and solution, which will be found through a call of
proposal it is of major importance to write a detailed and
structured RFP. Based on it the partners’ (or vendors’)
proposal will be evaluated and selected. Therefore, when RFP
is elaborated a scoring system should also be though;

 Call for proposals – inviting potential partners to respond to the RFP;

 Revise technology needs identification – based on received proposal

from partners some technological issues or even opportunities
for improving the CRM could be identified;

 Assessment and partner selection – which should be an easy and

value adding action if the RFP was well elaborated and
structured and if there exist a scoring system;

4. Implementing the project

 Refine project plan – in accordance with the new context and

partners;

 Identify technology customization needs – which usually yields

problems on ownership of Intellectual Propriety that both
vendors and clients will want their share.

 Prototype design, test, modify and roll out – the result of customization
process will be a prototype which will be tested on virtual
scenario, dummy or duplicated data. After a final review and
when it is decided that the application could be release to its
“final” destination, a roll-out program is implemented.

5. Performance evaluation

 Project outcomes – which reflect the deployment time and budget;

 Business outcomes – which are related to CRM objectives and

business objectives.

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2.2 Databases in the context of CRM

It is considered that the audience of this course is familiar with what a database is.
[but09] presents the six steps of developing a customer-related database:

1. Defining the database functions

Recalling the four types of CRM (strategic, operational, analytical and collaborative) the
database should support all of them. But there are differences between how data become
information for operational propose and for analytical propose. Therefore, data are typical
structured in two types of databases:

- OLTP (online transaction processing) database – in which the data is very

accurate and up to date with operational propose.

- OLAP (online analytical processing) database – in which the data is extracted

from OLTP, summarized, restructured with analytical propose. As well, OLAP
could receive data from other external and internal sources.

2. Defining the information requirements

Practically represents what data should be stored and how data can be moved from OLTP
to OLAP. CRM application vendors are providing templates models for many standard
services. Among customer information fields could be found:

- Contact data – persons’ names and roles (even previously), addresses

(invoice, delivery, email, web), phone numbers, fax
numbers, likes, dislikes, hobbies, family information,
political affiliation, connections, etc;

- Contact history – reasons of contacting, medium of contact, the result and

persons involved;

- Transactional history – both purchases and rejected offers;

- Current pipeline – opportunities currently in the sales pipeline with their

degree of accomplishment;

- Opportunities – which could come from transactional history and are not yet
brought in discussion;

- Products and services – details regarding the customer’s purchases, renewal

and service issues;

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 Implementing CRM Projects

- Communication preferences – face-to-face, email (plain or html), mail,

telephone, salutation, contact time, location. These
preferences could change over time for the same
customer and also could be different based on reason for
contacting him.

3. Identify the information sources

Information can come from two major sources in relation to the organization, internally and
externally.

Internal data can be gathered from:

- Marketing function: customer profiles with the related information, marketing

campaigns, etc;

- Sales function: customer details regarding contact, history, preferences,

agreements, potential purchasing and responses to
proposals, but also competitors’ offers;

- Customer service: service history and claims, claim resolutions status,

satisfaction level, enquiries;

- Finance function: payment history, credit ratings and solvency;

- IT function: history of web access activity of customers and their preferences.

External data can improve the level of information given by the internal data and can be
obtained from several sources among which there are research companies in fields like
marketing and statistics. According to [but09] external data can be categorized in three
groups:

- Compiled list data: - made up by companies which gather these data from
different sources (personal or company questionnaires,
public administration records, local taxes, etc) especially to
be sold to interested organization. These lists should be
permanently updated thereby some vendors are providing
online access to their lists.

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 - Census data: - provided by government’s specialized institutions which
usually are unreliable because of seldom updating and lack
of honesty. These will make sense from the following
examples of data but besides this, some of the information
can’t be reveled because of privacy considerations.
Examples of data are: average income, number of
employees or unemployment rate, ethnic percentage,
people education breakdown, etc;

- Modeled data: - there are not raw data as previous but processed data by
specialized companies. For example, they could be a mix
between company’s data and other sources data and
processed in accordance with company’s interest.

Customer-related data are considered [but09] of two types in relation with their existence:
primary and secondary. Primary data represents the first information entrance in the
system about one customer (or potential customer). Secondary data represents data
which already exist in the system from previous interaction with the customer. Collecting
primary data could be very expensive if surveys are used. Therefore, other techniques are
used in practice [but09]:

- Competition entries – by organizing different skill competitions or lotteries,

participants will agree to fill in the forms;

- Subscriptions – desire to receive newsletters or other benefits will require

filling the information form;

- Registrations – to fully benefit from purchased products or services, the

customer is asked to register them which will involve also
filling forms;

- Loyalty programs - a powerful technique which among their benefits will also
require that the customer provide important information.

4. Select the database technology and hardware platform

This is deeply discussed on other specialized courses.

5. Populate the database

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 Implementing CRM Projects

The main steps which should be done when populating a database with “appropriately
accurate” data (expression used in [but09] to describe the fact that depending on the
function of the database there is a bigger issue not having data at all than having slightly
incorrect data) are:

a. Sourcing the data – a well defined process should be designed for gathering
data from each customer’s interaction.

b. Verifying the data – this will ensure that there are no differences between
data at original source and data at destination (stored data).

c. Validating the data – the accuracy of data should be checked. Examples of

validations are: range validations, formats validations, validation at external
sources (authorities who have primary issued the data, like credit cards,
etc.).

d. De-duplicating the data (de-duping) – usually two situations appear:

i. Removing a possible duplication that should be kept, and

ii. Keeping a record which appears different than an existing one but
instead it is referring to the same thing.

e. Merging and purging data – appearing usually when importing data from
other databases (internal or external) or lists.

6. Maintain the database

Beside normal maintenance of database regarding its operation performances (query

access time, size, etc), support objectives (meaningful of provided information), there are
also another thing which should be kept in mind. For example, special care should be paid
when customers are maintaining their records by means of invitation to self-keep records
up to date. Another example is when the database is acquired as a SaaS from an ASP
which has engaged to operate the established process. In this case, some decoy records
can be introduced in the system and check the ASP’s response.

There are many other aspects regarding databases which have been discussed
deeply on related courses. Though, some of them should be mentioned briefly in the CRM
context as they are listed in [but09]:

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 Data attributes – in [wat99] are presented six desirable attributes:

o Accuracy – usage volumes and data quality should be monitored

o Relevancy – for decision taking

o Sharable – between users

o Transportable – between storage and accessing location/user

o Timely – data is available on time.

o Security – data should be protected against loss, sabotage and theft.

 Data integration – a single view of the customer should be available even when data is
coming from different sources. Often this is done in batch (like in batch processing) by
middleware applications and not in real time. Currently agents are developed to seek
updates in external sources and based on event triggering techniques will convert that
data to be inserted in company’s database. But this task could be very challenging from
many points of view. One is the processing load at the source. Other could be security
breaches.

 Data warehousing – which practically represent a large repository of data imported

from many databases with set of analytical procedures to add value to the data.

 Data marts – represent data warehouses but on a smaller scale due to the objectives
and technology requirements.

 Data access and interrogation – they are among CRM objectives as operational and
analytical. There are three main ways of accessing data [zik03]:

o Standard reports – available as default and generated automatically (OLAP

databases provide tools for this type of reports).

o Database queries – available as query languages and graphical tools.

o Data mining – largely discussed on other courses, it is concerned with

descriptive and predictive analytics of data. Actual CRM analytics vendors
provide the following data mining features [but09]:

 Prediction on cross-sell and customer intentions

 Accessing data from various sources: warehouses, data marts, call

centers, e-commerce, web-tracking systems, etc.

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 Implementing CRM Projects

 Tools for statistical analyze such as cluster analyze, decision trees and
neural networks.

 Reporting tools for analysis’ results.

 Privacy and data protection – which nowadays is more and more brought in the
attention. Companies gather large quantity of data from their customers about which
the customers are not aware off. It is enough to think on what internet cookies can
provide to an organization about the user (client). Therefore, like any opportunity
(automatic building the customer profile) it can be transformed in a threat. We have
discussed before how opportunities can become threats and threats can be exploited
as opportunities. There are companies which have self-regulated the privacy policy and
made it transparent. In this way, they tried to transform the above threat in an
opportunity. Beside this, there are international organizations which are dealing with
this topic having as objective development of legislation to regulate the phenomenon.
[but09] presents two examples of principles used in this direction.

One example is from the Organization for Economic Cooperation and Development
(OECD) and it was developed in 1980 as a set of principles for legislation purposes.
The principles are:

o Purpose specification – when data is acquired the provider should be

informed about the purpose.

o Data collection processes – which should to be legal and fair.

o Limited application – data should be used only for the mentioned

purpose.

o Data quality – personal data should be relevant for the mentioned

purpose, maintained accurate, complete and updated.

o Use limitation – personal data should not be disclosed or sold. If there

is desire for other use, the consent of consumer or as
required by law should be obtained.

o Openness – consumers should be informed about progress made with

his data.

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 o Access – personal data should be accessible in a readable format by
the consumer and, also, if he discovers inaccuracies,
the data should be corrected, erased or completed.

o Data security – personal data should be protected against

unauthorized access and use, modification or
disclosure.

o Accountability – a data controller should be accountable for

compliance with the above principles.

The second example is Directive 95/46/EC of the Council of European Union issued
in 1995 and referring to “Protection of Individuals with Regard to the Processing of
Personal Data and on Free Movement of Such Data”. Besides defining legal expressions
like “personal data”, “data subject”, “processing of personal data” (or “processing”),
“personal data filing system” (or “filing system”), “controller”, “processor”, “third party”,
“recipient” and “the data subject’s consent” [eur95], there are certain rights of EU citizens
guaranteed, among which [but09]:

o Notification – of individuals without delays about acquired data and its

source if not from the individual.

o Explanation – of the reasons behind the results of automated decisions

taken based on customer data.

o Correction/deleting/blocking – of data that do not comply with

legislation.

o Objection – could be raised by the individuals who are disagreeing the

meaner how their data are processed. This is known as opt-out and if
the objections prove to be justified, the data controller must not process
the data further. The other way is called opt-in and the individuals are
asked the permission for using their data.

One of the meaningful terms is “processing” which is defined in [eur95] as “any

operation or set of operations which is performed upon personal data, whether or not by
automatic means, such as collection, recording, organization, storage, adaptation or
alteration, retrieval, consultation, use, disclosure by transmission, dissemination or
otherwise making available, alignment or combination, blocking, erasure or destruction”.

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 Implementing CRM Projects

Knowing this, data controllers are required to comply with certain obligations. As
mentioned in [but09], among them are included:

o Process data only with explicit and legitimate purpose.

o Process data only when there is a “data subject’s consent” or is

required to enter into or fulfill a contract, or is required by law.

o Ensure the data is accurate and up to date.

o Advice the individual of the identity of the “processor”, the reasons for
data processing, the “recipient“ of data, and the data subject’s rights in
respect of data access, correction and deletion.

o Ensure data security.

The USA doesn’t have this restrictive legislation but on the global market, US companies
which desire to do business with EU companies have to adhere to “Safe Harbor”, which is
a set of principles issued by US Commerce Department [but09]. As well, in the USA self-
regulation approaches are functioning where companies or associations are developing
privacy standards. For example, the World Wide Web Consortium (W3C) has developed a
Platform for Privacy Preferences (P3P) standard applied to e-commerce and which has
three major elements [but09]:

o A personal profile.

o A profile of website privacy practice.

o Automated protocols for accessing and using the user’s data.

References

[and02] Anderson, K., Kerr, C., 2002. Customer Relationship Management. McGraw-Hill
[but09] Buttle, F., 2009. Customer Relationship Management. Concepts and Technologies.
2nd Ed, Butterworth-Heinemann, Elsevier.
[eur95] European Council 1995, Directive 95/46/EC of the European Parliament and of the
Council of 24 October 1995 on the protection of individuals with regard to the
processing of personal data and on the free movement of such data. Official Journal

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 L 281. [online at: http://ec.europa.eu/justice/policies/privacy/docs/95-46-ce/dir1995-
46_part1_en.pdf Accessed on 20 June 2012]
[zik03] Zikmund, W.G., McLeod, R.Jr., Gilbert, F.W., 2003. Customer relationship
management: integrating marketing strategy and information technology. John
Wiley.
[wat99] Watson, R.T., 1999. Data management: databases and organizations. John Wiley

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