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A Study of CRM Implementation in Financial Industr
A Study of CRM Implementation in Financial Industr
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Hareton Leung
The Hong Kong Polytechnic University
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Chi Wah Man, Wing Yee Winnie Kong, Wai Hung Eddie Yui, Pui Fan Jessie Tam, Hareton Leung
Department of Computing
The Hong Kong Polytechnic University
Abstract – This paper presents a project management barriers as well as insights to improve the success rate of
model for customer relationship management projects for Software/CRM implementation in the financial industry.
the financial service industry. Key findings from a survey Financial institutes could then realize the project
of both financial institutes and software vendors are then objectives in terms of lowest cost, on-time project
presented. It is suggested that a good communication completion, good quality system, minimum disturbance to
management can increase the success rate of CRM the business, and a high return of investment.
projects. The other important areas are scope
management, quality management, time management and 2. A CRM project management model
project planning, although their performance is below
expectation. In developing our model, we first review various CRM
models [1, 2, 5, 7, 8] and the popular software project
Keywords : CRM, Project Management, Financial Service management models [3, 6, 9, 10, 12]. The implication of
each model on software project management in financial
1. Introduction industry is identified. In addition, after reviewing several
case studies of CRM imp lementation [11], we identified
In the financial service sector, the deployment of some key success factors for software project
customer-focus strategy to re-engineer the business management in the financial industry.
operations is often through the development of the We then developed a Software/CRM Project Management
customer relationship management (CRM) system. With a model for financial institutes, as shown in Figure 1. Four
good CRM system, a financial institute can understand primary business factors forming the software project
customers better and is able to design and provide better management environment in financial service industry are
services/products. A financial institute can then get more identified as technology, CRM/IT strategy, customer
loyal and profitable customers, and earn more profit. requirements and organization culture & characteristics.
Recently, many retail banks in Hong Kong such as Financial institutes that implement CRM project have to
CitiBank and Standard Chartered Bank have started to consider their existing technology level as well as the
develop different kinds of CRM systems such as sales technology level that they are going to acquire in the
force automation, marketing campaign system, internet future. The considerations of existing technology level
banking and phone banking. However, implementing CRM include operational tools, analytical and collaboration
system is not easy. Research studies of the Gartner Inc. systems, degree of process automation, the diversity or
[4] and Meta Group [8] indicate that 50% to 80% CRM complexity of legacy systems and other hardware and
implementations fail. software systems. However, the future technology
Our project aims to explore an effective software/CRM acquired has to be in line with their CRM/IT strategy, at
project management model for the financial service the same time, meeting the customer requirements. The
industry in Hong Kong. In the next section, we propose a organizational culture and characteristics affect all aspects
software project management model for financial of the project management. Organization of different size
institutes. Section 3 focuses on the survey approach. and complexity requires different system requirements.
Section 4 presents some key findings coming from the Quick decision making, agile to business changes, ability
responses from the financial institutes and the software to take risk and keen for efficiency improvement are also
system vendors. It is expected that the research findings some of the culture and characteristics that shape the
could give us a substantial understanding of the current behavior of the management and employees.
Software/CRM project management practices, issues or
Technology Project Closing & CRM/IT
Evaluation Strategy
Scope Mgt
Process/System
Integration Mgt
Change
Mgt Project Project
Project Time Conflict Risk Quality Initiation
Control Mgt Mgt Mgt Success
Mgt &
Communication Celebration
Mgt Planning
Procurement HR
Mgt Mgt
Cost Mgt
Second Tier Project Mgt Areas Primary Business Factors of Software Project Mgt
Figure 1. Proposed Software/CRM Project Management Model for Financial Service Industry
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Figure 4. Financial Institutes – Gap Analysis Between Project Management Area and Performance
According to software vendors, it was very common that vendors to do more tasks) during project implementation.
financial institutes would expand project scope (i.e. ask As software vendors had to maintain good relationship
with clients, they usually agreed without asking for extra in both software project implementation of Service
charges. In addition, unwillingness of conservative Automation and Integration of Databases.
banking staff to cope with new changes was also a major It could be understood that service automation and
difficulty for vendors. Conflict management, project integration of database of different areas involved re-
planning, cost control and risk control were the second design of cross-departmental work process flows. It,
group of project management areas with large deviation therefore, increased the complexity and hence the
from the level of importance expected. difficulties of handling different interest of different parties
In sum, the gap analysis highlighted that all the project and the continuous change of requirements were
management areas (regardless of the level of importance) unavoidable. In that case, it was always thought that the
could have done better. Those most important project resource provided was not enough for handling the issue.
management areas identified were the areas that failed The mapping of project difficulties with implementation
most on meeting their expectations. In other words, even practices showed that for those projects implemented
though they were believed to be important, they were not jointly with external consultants, they experienced a lot
managed well. Change management on people was the more difficulties than the other implementation practices,
badly managed area. It might suggest that people such as , total project outsourcing and recruit experienced
management and matters related to interpersonal project in-charge.
relationship were most difficult part of project Different from the feedback of financial institutes, the
implementation. software vendors reported that the five frequent
difficulties encountered in project management with
4.9 Difficulties encountered financial institutes in order of severance were:
The top five difficulties ranked in project implementation 1. Employee resistance to change (70%)
by financial institute respondents were: 2. Poor communication (61%)
1. Continuous change of requirements (50%) 3. Difficult to integrate highly diverse legacy
2. Different interests of different parties (50%) systems (57%)
3. Insufficient resources (45%) 4. Inadequate budget (52%)
4. Unclear roles and responsibilities (30%) 5. Process review for automation (39%)
5. Staff resistance/ poor communication (25%) The top two were highly related to people aspects , which
Among the top five highly ranked difficulties, four of them implied that people issues were more difficult to handle. It
were about people management, such as different interests could be due to the fact that the software vendors were
of different parties, unclear roles and responsibilities, staff the ‘outsider’ of the financial institute. As an outsider,
resistance and poor communications. implementing new changes / new system would definitely
When correlating the project difficulties with face a lot of resistance from the client’s employee. The
implementation areas, we found that insufficient results supported hypothesis H5 that people aspects were
resources, different interest of different parties and the most difficult tasks in project management.
continuous changing of requirements were mostly found
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Figure 5. Software Vendors - Gap Analysis Between Project Management Areas and Performance
Figure 6. Best Practices for Software Project Implementation in Financial Institutes