BCO 6603 – Enterprise Resource Planning Systems

Assignment 1 : Management Report

Abstract. With the increasingly economic globalization, companies are facing

fierce competition. It becomes more and more important for companies to acquire
and retain customer. Customer Relationship Management (CRM) provides a
technology to organize and automate the business process and information which
related to customer. This paper will address the concept of CRM and SAP CRM
structure as well as benefits and challenges in CRM implementation. The first
section introduces this paper’s purpose. The second section will give definition of
CRM. The third section will discuss the difference between CRM and ERP system.
Then the fourth section will descript the SAP CRM structure. And the fifth and
sixth section will discuss the benefits and challenges of CRM implementation. The
seventh section will give two examples for successful CRM implementation. Then,
the last section is summary and conclusion.

1. Introduction
Nowadays, many companies are facing how to find a market niche which make company
to survive in highly competitive markets (Raab et al. 2008). Companies need to address
the follow issues in their business strategy (Sharp 2003):
 Acquiring and retaining customers and preventing them from lost.
 Determining products and service to increase customer satisfaction.
 Attracting and retaining profitable customer etc.
In order to solve those issues, a new technology terms, Customer Relationship
Management (CRM) come out in the late 1990s (Payne 2005) and become a hot topic in
business technology. This paper will discuss the CRM concept, benefits and challenge in
implementation as well as the SAP CRM structure and some example for successful
implementation around the world.

2. CRM Definition
Even though Customer Relationship Management (CRM) only comes out in the late
1990s, but the basic principle has been existed for longer time (Payne 2005). As business

Wang Zhaohui Student ID:s3881839 Page 1

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

activities are various, different individual have different understanding for the customer
management. It is not sufficient to have only one definition of CRM (Buttle 2004).
According to Gartner’s definition(Radcliffe, Kirkby & Thompson 2001), CRM is ‘a
business strategy whose outcomes optimize profitability, revenue, and customer
satisfaction by organizing around customer segments, fostering customer satisfying
behaviors, and implementing customer-centric processes’. The business strategy is the core
in CRM technology. All the function or processes are used to make the strategy achieved.
CRM deal with all the process related to customer such as sales, account as well as service
activities. In order to achieve the business strategy, there are three type or architecture
level of CRM (Martines 2010):
 Operational CRM - supporting the automation of customer process.
 Analytical CRM - analyzing data related customer for strategic purposes.
 Collaborative CRM - applies technology through all channels and supports across
all organizational boundaries.

3. Difference between CRM and ERP

In current business world, there are more and more companies adopt ERP system to handle
the business process. In ERP system there are many function to handle the information and
process which related to customer, such as SAP R3 have the function for Sales
Distribution, Financial and Supplier Chain Management. Why need CRM?
The major difference between ERP and CRM is that ERP majorly used to automate and
smooth the workflow and process internal of an organization. The purpose of ERP is to
enhance the process across all departments inside an organization. CRM majorly focus on
all activities and processes related to customers other than for the internal workflow. CRM
could collect information from ERP and through data analysis and data mining to provide
the strategy and methodology in order to acquire and retain the customer as well as gain
the profit for company. CRM is not only about technology, it is about strategy,
methodology and intelligence.

Wang Zhaohui Student ID:s3881839 Page 2

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

4. SAP CRM structure

There are many company provide CRM solution worldwide. As the biggest company in
ERP market, SAP also provides CRM solution. SAP CRM provides comprehensive
function for automating the process related to customer. In SAP CRM, there are marketing
planning, campaign management, marketing analytics, and customer segmentation
function to determine and measured the KPI of a company goals for a CRM solution.
SAP CRM collects all data information from SAP Sales, financial as well as service in real
time. It could link with SAP BI, SAP SCM module and integrate all those information
with OLAP as well as Data Mining in order to qualify decision making. SAP CRM though
marketing planning and Campaign management to create and launch planning, campaign
strategy (such as promotion for sales strategy), targeting and executing functionality.

5. CRM implementation benefits

CRM is not simple technology to easy implement like to install simple software in a PC.
Actually, there are more than 60% companies failed in CRM implementation in current
world. It is very amazing, in spite of so many company failure in the CRM development
and implementation. There are still many companies invest the money in CRM
development and implementation. Because CRM could provide big benefits for a
company, there is no other technology could do this once it works well (Cunningham
2007). Once successful implementation, through the CRM technology, company could
gain many benefits, such as:
 Shared or distributed data all across organization and department as the data is all
centralized.
 Reduce cost as the financial could easy get all the information related to customer.
 Improve service quality as service department get all information on time.
 Easy to make the strategy for campaign and promotion for increasing the customer
satisfaction and increase customer loyalty and keep the customer retention.

6. CRM implementation challenge

Wang Zhaohui Student ID:s3881839 Page 3

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

CRM could provide big benefits for companies, however, there are many challenges in
CRM implementation as its complex nature.
 The first is no sufficient knowledge to supports. In order to successful to
implement CRM project, need many knowledge in Data Warehouse, Database
management and business analysis such as OLAP and Data Mining. All those
request the developers have wild knowledge in information management
knowledge.
 The second is the insufficient stakeholder management. Implement CRM could not
only in a single organization or department. It is typically shared by many
difference department and need many department support.
 The third is that do not recognize that CRM system could not be done one time, it
subject to change continually. In order to make the system successful work, the
CRM system must be changed and improved continually.

7. Successful CRM implementation example

There are many companies implement CRM and some of them successful and some of
them failure. The follow two cases are successful implement.
Case one
General Motors (GM) CRM Project
Purpose : Enable customers to access information on GM automobiles.
Company Background : GM dealers have been separated from different product
divisions. So cross-selling was very little. The information was disparate. So customers are
difficult to obtain specifications, pricing, etc.
CRM Solution: GM set up a cross-divisional CRM system which capabilities for a
group of 250,000 customers. So the customers can access information on a variety
of models and division through Web site.
Benefits :
Customer easy to search for vehicle information on GM Web sites
Increase of eight percent in sales rates

Wang Zhaohui Student ID:s3881839 Page 4

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

Increased company revenue and profitability

Lessons Learned:
The GM CRM solution is combing their legacy systems with current data
warehousing and internet technologies.

Case Two:
Canada Post CRM Project
Purpose : Deliver a universal access, communication, and security, the fast-paced
Internet marketplace.
Company Background: Canada Post provides a range of communication services
to some 13 million addresses in Canada. With the new Internet economy, company
is facing to evolve business in current rapid development internet.
CRM Solution: Canada Post chose SAP to implement its business transformation
system. This program use mySAP.com, SAPs E-business solutions platform. The
CRM solution majorly focused on the first phase of the implementation. It
integrated all information from across the department and link the CRM
functionality with supply chain management for a holistic network.
The Benefits :
Made the customer could pay invoice online at any time and any location.
Provided new revenue-generating services for business companies.
Made the company move into E- logistics Industry.
Lessons Learned :
The link E-commerce and supply-chain management to CRM need use outside
resources and technology as company shortage on knowledge E-commerce.

8. Summary
Choosing CRM for a company to deal with the strategy in terms of the activities and
process which relate to customer could help company acquire more new customer as well
as retain the current customer and make the customer satisfactory. It could provide big

Wang Zhaohui Student ID:s3881839 Page 5

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

benefits. But CRM is a complex technology, it require the coordinate all across the
departments and organization. The developers must have extensive knowledge in business
process technology and software. It need complete support from management level and
sufficient budget and enough time for implementing and improvement. As its benefits
could make company survive in current highly competitive business market. Many and
many companies begin to implement CRM in their companies.

Word Count:1474

Wang Zhaohui Student ID:s3881839 Page 6

BCO 6603 – Enterprise Resource Planning Systems
Assignment 1 : Management Report

BIBLIOGRAPHY

1. Adrian Payne 2005, Handbook of CRM: Achieving Excellence in Customer

Management, Butterworth-Heinemann, Burlington.

2. Duane E.Sharp 2003, Customer Relationship Management System Handbook,

Auerbach.

3. Francis Buttle 2004, Customer Relationship Management Concept and Tools,

Elsevier Butterworth-Heinemann, Burlington

4. Gerhard Raab, Riad A.Ajami, Vidyaranya B.Gargeya and G. Jason Goddard 2008,
Customer Relationship Management A Global Perspective, Gower, Burlington

5. John Radcliff, Jennifer Kirkby and Ed Thompson 2011, The Eight Building Blocks
of CRM, Viewed 12 March 2011. Viewed by 12 March 2011.
<http://www.gartner.com/2_events/conferences/crmawards/building.pdf>

6. Juan Martines 2010, Gartner Outlines 3 Steps to a Successful CRM Strategy,

Viewed 11 March 2011.
<http://www.destinationcrm.com/Articles/CRM-News/Daily-News/Gartner-
Outlines-3-Steps-to-a-Successful-CRM-Strategy-66669.aspx>

7. Michael J. Cunningham 2002, Customer Relationship Management, Capstone,

Oxford

8. National Project 2004, the Benefits of CRM. Viewed 12 March 2011,

<http://jisc.cetis.ac.uk/crm-tools/documents/benefits-of-crm.pdf>

Wang Zhaohui Student ID:s3881839 Page 7