In Unit 7, we read about CRM systems and application technology.

Nowadays companies are

implementing CRM repositories as a strategic tool to monitor customer interactions and analyse
buying behaviour (O'Brien 2002; Dutta and Segev, 1999). The combination of CRM solutions and
technological Knowledge Management tools will offer intelligent means of storing, retrieving and
disseminating knowledge that will add value to customers, drive higher returns and hence improves
business performance.

For instances where businesses require strong customer loyalty (via customer lock-in) because it is
less costly to increase sales from existing customers compared to acquiring new ones (Birkin et al,
2003), or when there is constant pressure to minimize the cost of winning customers and reduce
staff cost; for such instances the source of potential savings rising from a CRM solution comes from
the acquisition of customers itself. Therefore, a CRM solution presents a powerful mechanism for
creating orderly information, increasing process efficiency and enhancing customer value.

However adopting CRM effectively requires everyone throughout the organisation to embrace a
customer-centric view of the business where knowledge about customers needs is paramount.

Despite the opportunities offered by the CRM tools, which, in fact, offer a multitude of capabilities
and solutions (the majority of them being web-based), its impact to the business performance might
take a while to be fully realised. Organisations often spend substantial amounts of money and
resources on CRM tools as its adoption often led to high customisation costs (Comb, 2004). The main
barriers are around issues relating to cost, deployment time, maintenance and the value of
information, this is because CRM solutions that are not properly linked up with IT systems, do not
automatically translate into economic benefits.

OBrien, J. (2002). Management Information Systems: Managing Information Technology in the E-

Business Enterprise, McGraw-Hill, New York.

Dutta, S. and Segev, A. (1999). Business transformation on the Internet, European Management
Journal, Vol. 17, No. 3, pp. 23-34.

Birkin, S. and Harris, M. (2003). E-Business and CRM: Directions for the Future, Proceedings of the
International Association for the Development of Information Systems (IADIS) Conference June 3-6
2003, Lisbon, Portugal.

Comb, C. (2004). Assessing Customer Relationship Management Strategies for Creating Competitive
Advantage in Electronic Business, Journal of Knowledge Management Practice, Vol. 5 (August 2004).