Implementation Methodology of Customer Relationship Management (CRM) Systems: Towards Developing Successful Principles and Guidelines

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Academic Research International Vol. 4 No. 6 November 2013
IMPLEMENTATION METHODOLOGY OF CUSTOMER

RELATIONSHIP MANAGEMENT (CRM) SYSTEMS: TOWARDS
DEVELOPING SUCCESSFUL PRINCIPLES AND GUIDELINES
Khalid Rababah
Management Information System (MIS) Department, College of Economic and Business,
Jadara University, JORDAN.
Khalid_rababah@yahoo.com
ABSTRACT
The implementation of CRM systems has become very necessary for organizations in
order to effectively manage their relationships with the customers. Unfortunately, it
has faced various failures in different industries. Besides, the existence of
implementation methodologies or frameworks that guide the successful
implementation of CRM systems are still lacking. In response to that, this paper aims
to critically review the methodologies of the existing implementation of CRM system
and to comprehensively suggest a set of principles and guidelines for the successful
implementation plan of CRM systems. In accordance, this paper compares three most
famous CRM implementation methodologies; CRM-iris methodology, CRM-six sigma
methodology, and Jun- Wu methodology. As a result, a set of implementation
principles and guidelines are suggested to be taken into consideration in the
implementation of CRM systems. These principles and guidelines could be tested
empirically in the future for the generalization purposes.
Keywords: CRM system, implementation, six sigma methodology, iris methodology,
customer knowledge
INTRODUCTION
In today’s business environment, customers have become one of the most important assets of
an organization, similar with financial and knowledge. For any organization to be successful,
it must take care and give a great attention to its customers. Organizations have to carry out
their businesses on the basis of satisfying customers’ needs and desires even if they are not
clearly stated or requested by customers. What important here is the prediction of the
unspoken needs of customers. In regards to this, implementing Customer Relationship
Management (CRM) is the paramount solution.
Unfortunately, there is a high failure rate in CRM initiatives (Rigby et al., 2002; Ryals &
Knox, 2001; Zablah et al., 2004). As an example, Raisinghani et al. (2005) found that the
failure rate of CRM software installations in the industry is 60%. Later, in 2001 the failure
rate of CRM projects was estimated to be between 55% and 75% (Kotorov, 2003), while
Gartner Group, (2003) found that 70% of CRM projects did not improve organizational
performance (Zhang et al., 2006). Further, Qingliang et al. (2008) found out that 80% of
CRM projects failed to generate a positive return. Similarly, according to Peppers & Rogers
Group, 70% of CRM initiatives failed, while Cap Gemini Ernst & Young argues that more
than 50% of all CRM projects do not produce results. In fact, these CRM programs not only
failed to achieve economic benefits, but also have destroyed the relationship between an
organization and its customers (Lindgreen et al., 2006; Frow et al., 2011). Indeed, Finnegan
and Currie (2010) assured for the fact of the low success rate of CRM implementation.
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Despite the huge investment in CRM, organizations are still unable to reap the expected
benefits from these investments (Corner & Rogers, 2005). Meanwhile, Karakostas et al.
(2005) criticize the effectiveness of CRM and its contribution in achieving competitive
advantage. On the other hand, the tremendous benefits associated with the successful CRM
initiatives encourage and stimulate the continuation of the adoption of CRM and motivate the
researchers to study closer into the reasons of the failures and further tackle the issues
(Paulissen et al., 2007). Regardless of the high failure rate of CRM, there are substantial
opportunities of the successful CRM, in which it will help an organization identify and adapt
to the needs of their customers, reduce transaction costs, and enable the development of
closer relationships with loyal customers (Sharma & Iyer, 2007).
The adequate implementation and integration is necessary for the successful CRM
implementation (Meyer, 2005). However, Paulissen et al. (2007) indicate the lack of attention
given to the implementation phase of CRM in marketing and information system (IS)
literatures. In addition, an integrated conceptual framework that can guide the organizations
towards the successful implementation of CRM has not been developed yet (Garrido-Moreno
& Padilla-Melendes, 2011). Therefore, this paper aims to provide a review of the most
famous existing implementation methodologies of CRM systems. In addition, it also aims to
come out with a set of principles or guidelines to be included in any implementation plans of
CRM systems in order to increase the success while reducing the failures of CRM initiatives.
The next section of the paper explains the different existing implementation methodologies of
CRM systems and compares between these methodologies. The third section presents the
principles and the guidelines suggested for the implementation plan of CRM systems and the
last section concludes the paper.
CRM IMPLEMENTATION METHODOLOGIES

Defining and understating CRM is very important for implementing it successfully. One of
the most recent and holistic definitions has been outlined by Rababah et al. (2011) who say
“CRM is the building of a customer-oriented culture by which a strategy is created for
acquiring, enhancing the profitability of, and retaining customers, that is enabled by an IT
application; for achieving mutual benefits for both the organization and the customers”.
Previously, Laudon and Laudon (2004) define the implementation as "all organizational
activities working toward the adoption, management, and routinization of an innovation". In
short, CRM systems are implemented to bring in benefits to an organization. Hence, Xu and
Walton (2005) address that the reasons for CRM implementation include improving customer
satisfaction level, retaining the existing customers, improving customer lifetime values,
providing butter strategic information to sales, marketing, finance, etc., attracting new
customers, and saving cost. In addition, the implementation of CRM programs will lead to
achieving a competitive advantage and profitability for an organization (Roberts et al., 2005).
Among the most famous methodologies for implementing CRM systems are CRM-Iris
Methodology, CRM-Six Sigma Methodology, and Jun-Wu Methodology.
CRM-Iris Methodology
Chalmeta (2006) indicates that solving the integration problem in CRM implementation need
for an overall integrated methodology. Therefore, CRM-Iris methodology was developed. It
is a formal methodology that directs the process of developing and implementing a CRM
system, taking into consideration various aspects of the CRM system including defining
customer strategy, re-engineering customer-oriented business process, human resources
management, the computer system, management of change, and continues improvement
(Chalmeta, 2006).
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Chalmeta (2006) also explains that CRM-Iris methodology consists of nine activities
including project management and prerequisites, definition of the organization framework,
definition of customer strategy, designing a customer relationship assessment system, process
map, human resources organization and management, construction of the information system,
implementation, and monitoring.
At the first activity (project management and prerequisites), the techniques and methodology
used in engineering projects must be applied on the CRM project management to help at the
following activities. Therefore, before beginning the project, there is a need to raise the
management awareness, define the vision and the objectives of the project, create committee,
appoint a coordinator officially, and develop and get the approval on the project plan and
internal dissemination. On the other hand, during the execution of the project, it is necessary
to monitor the execution of the project to control time slippage, prevent resistance to change,
motivate staff, and measure the degree of participation and asses the results.
The second activity is defining the organizational framework through the analysis of the
organization's vision, mission, strategies, objectives, and culture including policies and
values. Next, the organization needs to create and define a customer strategy through,
identifying organization's customers, then analyzing the profitability of customers and
defining customers' objectives. After that, the construction of measurement system for
assessing customer relations including the customer satisfaction and customer care.
Afterwards, the developing of process map which involves redesigning the business
processes to become customer-oriented by analyzing the current situation (AS-IS state) and
designing the future status (TO-BE). Then, the human resources need to know about the
CRM project, its importance, and trained on its using. In addition, accompany with changing
the organization's culture, the organization's job manual and the organizational diagram need
to be restructured. Another issue is choosing the right computer system that handles the
acquisition of customer information and converting it into business knowledge. Additionally,
the CRM computer system must cover four main areas; transactional (operational), analytical,
strategic, and the e-CRM. Next, the implementation stage, that is how to move from the old
(AS-IS) system to the new (TO-BE) system by making activities prioritization then
implementing the short term projects and managing the change properly that will inevitably
accompany the conversion. Finally, the monitoring stage by which, a control panel-type tool
is initiated to monitor each activity by using different types of indicators of success. In
addition, to assure that the desired change is implemented effectively, a quality assurance
method must be established.
In conclusion, the integration of the strategic and technological aspects of CRM properly is
one of the most appealing factors for the using of CRM-Iris methodology. In the contrary,
CRM-Iris methodology has many weaknesses like limited consideration of the critical
success factors (CSFs), users not involved in the design of the CRM system, no indication
nor measurement for the user acceptance, and limited validation for the methodology to small
and medium-sized companies.
CRM-Six Segma Methodology
Zhedan et al., (2007) investigated and offered the most important CSF for the CRM
implementation including measurements, management involvement, training of CRM
concepts, time and budget management, and minimizing customization. Next, they developed
a strategy to integrate the Six Sigma Define, Measure, Analyze, Improve, and Control
(DMAIC) methodology with the CRM implementation process taking into consideration the
revealed CSF. They define Six Sigma as a business improvement methodology aiming for

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increasing customer satisfaction, and improving processes, analyzing rigidness, and executing
timely. The DMAIC indicates the main phases of the Six Sigma.
Define Phase
Define phase consists of five steps. Zhedan et al. (2007) illustrate how these steps are adopted
for the CRM implementation. The first one is to align the CRM goals with organization's
business goals. The second step, using a process map for the processes the CRM project will
improve and the current process (AS-IS) will be documented. In the third step, based on the
CRM project's goals the process metrics will be defined. The fourth step builds an effective
CRM implementation team that needs to be established based on knowledge, skills, abilities,
and personal attributes (KSAP). Finally, the project charter is developed by the project team,
which is written document containing information about the CRM project goals, budget, the
start and end time, and the team members. In addition, the development of the CRM project
schedule which includes the tasks, resources, times and milestones for each step of the CRM
implementation.
Measure Phase
The measure phase includes the steps from six to nine. Zhedan et al. (2007) articulate how
these steps are adopted for CRM implementation. The sixth step is determining the data to be
measured based on the CRM project goals, current processes, and process metrics. The
seventh step collects and records data through various techniques including surveys, and
documents review. The eighth step is data consolidation to ensure its consistency,
completeness, and validity. In the ninth step, the baseline of the current process based on the
collected information is determined.
Analyze Phase
Zhedan et al. (2007) express how the three steps of analyze phase are adopted for CRM
implementation. The phase starts with step ten which is finding out and analyzing the main
problems of the current process. Step eleven identifies the future process then refining the
CRM project goals with it. Step twelve selects the CRM product taking into consideration its
functionality to assure its capability to achieve the future process and the project goals.
Improve Phase
Zhedan et al. (2007) point out how the steps in the improve phase are adopted for the CRM
implementation. In step thirteen, the CRM products are customized, but over customization
must be avoided which may cause budget overruns or missed deadlines in the CRM
implementations. Step fourteen installs the CRM system and trains the end users on the CRM
concepts and how to use the CRM system. Finally step fifteen manages the change that will
inevitably accompany the implementation of the CRM system.
Control Phase
Control phase consists of three steps. Zhedan et al. (2007) explain how these steps are
adopted for the CRM implementation. Step sixteen measures and maintains the TO-BE
process to find out if the project goals are archived or not. Step seventeen disseminates
lessons learned from the implementation, which are necessary for the continuous process
improvement. Finally, step eighteen identifies any new goals that may arise over time
whether to solve any future dissatisfaction or to exploit any future opportunities.
In conclusion, Six-Sigma methodology has strong points that encourage the CRM
implementation. Among the points, the explanation of the CSF for CRM implementation and
mapping out each one to each main phase of CRM implementation are significant. On the
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other hand, it has many weaknesses such as the limited consideration of the CSF, the limited
validation for the methodology, the users are not involved in the design of the CRM system,
and there is no indication or measurement for the user acceptance of the methodology.
Jun-Wu Methodology
Jun-Wu (2008) developed a framework for CRM implementation and indicated to the need
for taking a holistic approach for finding the major factors affecting CRM implementation.
Meanwhile, Becker et al. (2009) emphasized for the need for such a holistic approach for the
evaluation of CRM implementation. According to this methodology, CRM implementation is
divided into six iterative processes including exploring and analyzing, visioning, building
business case, planning and designing solution, implementing and integrating, and realizing
value (Table 1). In addition, people, process, and technology are proposed as the key
perspectives of CRM.
Table 1. Description of CRM Implementation Process
Implementation
Implementation Details
Phase
Organization takes a CRM audit including Strategic visioning, understand
Explore and market best practices, Developing a process from a customer-centric
Analyze perspective, identify areas lacking, moving toward major process change, and
thus CRM implementation.
Through CRM strategy assessment, organization should: (1) Segment and
develop ‘touch-point’ strategies to support CRM. (2) Implement and execute
Vision the processes, performance measures, IT infrastructure and marketing
programs to support CRM capabilities. (3) Manage the delivery of a significant
transformation project, including interdependent changes in people, process,
systems and technology.
Organization sets the enterprise wide CRM roadmap, system construction in 3
Build business phases based on mass planning, phasing-out implementation principle. Phase
case 1, Implementing standard CRM solutions. Phase 2, System deploying and
optimizing. Phase 3, System integration with other applications.
Plan and design Organization chooses the CRM system from CRM solution vendors and
solution develops a detail plan to implement the system, aiming at covering the
marketing, sales and service functional area.
Organization implements the system based on CRM solution vendor's
Implement and implementation methodology. Organization’s IT professionals fulfill most of
Integrate the analysis, development, testing, and integration between sales force,
customer care, customer service, telemarketing, web, field service, and
transaction system processes and technology.
Realize value Investigating the CRM effect on the productivity functionality of the
organization.
One important aspect of Jun-Wu methodology is the identifying of the CSF associated with
the proposed key perspectives; people, processes, and technology. Jun-Wu (2008) indicates
that the CSF includes technical, business process, and people factors. In detail, technical
factors include implementing relevant technology that supports the organization's processes
and able to grow in the future, and the intelligent use of technology. The business process
factors include reviewing the AS-IS processes, re-designing the core business processes, the
commitment to processes, the change management, the management support, and the
organizational structure. Meanwhile, people factors include the existence of a vision,
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employee understanding of the project and its implications, the assessment of the
organization's readiness, and the development of a detailed plan for training the end users.
In conclusion, the strong points of Jun Wu-methodology is laid on the using of a holistic
approach for finding the major factors affecting CRM implementation. On the other hand,
among the weak points include the limited consideration of CSF, the limited validation for
the methodology to a leading high-tech company in China, the users not involved in the
design of the CRM system, the lack of clear understanding of CRM, the lack of measurement
systems, no effective team building for CRM implementation, and no indication nor
measurement for the user acceptance.
Comparisons among the Three Methodologies
Table 2 summarizes the comparisons among the three methodologies regarding CSF,
strengths, weaknesses, and the industry of applying the methodology. In addition, the
comparison among the three methodologies of CRM implementations has brought the
following:
The Convergence Points
1. At the three methodologies process metrics or measures are developed based on the
CRM project goals.
2. For both Iris-methodology and Six-Sigma methodology, an analysis of the current
situation (AS-IS) and, designing and measuring the future status (TO-BE) are
included.
3. The three methodologies consider the management of the change that will inevitably
accompany the CRM adoption.
4. Iris-methodology and Jun-Wu methodology concentrate on building customer-
oriented business processes.
5. The three methodologies indicate for the need of choosing the appropriate CRM
system.
6. The three methodologies emphasize on the need for user training to increase the
likelihood of the successful implementation.
7. The three methodologies include monitoring and measuring activities for the
effectiveness of the CRM implementation.
The Divergence Points
1. Iris-methodology begins with the analysis of the organization's vision, mission,
objectives, strategies, and culture. In contrast, Six-Sigma starts with defining the
objectives of the CRM project and aligning it with the organization's objectives.
Meanwhile, Jun-Wu opens with making a CRM audit.
2. Six-Sigma differs from Jun-Wu and Iris-methodology by building-up the CRM
implementation team and the development of project charter which includes the
CRM project goals, budget, timeframe, team members, and CRM project schedule.
3. Iris-methodology indicates to the need of an organization to create and define a
customer strategy, in which organization's customers are identified, the profitability
of customers is analyzed, and customers' objectives are defined. In contrast, Six-
Sigma and Jun-Wu do not.
4. Iris-methodology constructs the measurement system for assessing customer
relations including customer relations and customer care, in which the other two do
not.
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5. Jun-Wu indicates to the need for mass planning and phasing-out implementation
principle, while Iris-methodology and Six-Sigma do not.
6. Six-Sigma emphasizes on the CRM system customization while Iris-methodology
and Jun-Wu do not.
7. Iris-methodology contains a quality assurance method while Six-Sigma and Jun-Wu
do not.
8. Six-Sigma methodology disseminates lesson learned from the CRM implementation
for the continuous process improvement while Iris-methodology and Jun-Wu do not.
9. Jun-Wu takes into consideration the integration capabilities of the CRM system
while Iris-methodology.
Table 2. Summary of the CRM System Implementation Methodologies
Methodology
Criterion
Six Sigma-
Iris-Methodology Jun-Wu Methodology
Methodology
1. Implementing relevant
1. Defining customer technology.
strategy. 1. Measurements. 2. Re-designing the core
2. Re-engineering 2. Management business processes.
customer-oriented involvement. 3. The change management.
business process. 4. The management support.
3. Training of CRM
3. Human resources 5. The existence of a vision.
CSF concepts.
6. Employee understanding
management. 4. Time and budget of the project and its
4. Selecting the computer management. implications.
system. 5. Minimizing 7. Organization's readiness
5. Management of change. customization. assessment.
6. Continues improvement. 8. Training the end users.
The explanation of the

Using a holistic approach for
The integration of the critical success factors
finding the major factors
Strengths strategic and technological and mapping each one
affecting CRM
aspects of CRM properly. to each main phase of
implementation.
CRM implementation.
1. Limited consideration of
CSFs.
1. Limited
2. Limited validation for the
consideration of
methodology.
CSFs.
1. Limited consideration of 3. Users not involved in the
Weakness 2. Limited validation
CSFs. design of the CRM
es/ for the
2. 2. Users not involved in system.
Limitatio methodology.
the design of the CRM 4. Lack of clear
ns 3. 3. Users not
system. understanding of CRM.
involved in the
5. Lack of measurement
design of the CRM
systems.
system.
6. No effective team
building.
Small and Medium-sized Large human resource A leading high-tech company
Industry companies from various service company in (computer manufacturer) in
sectors. China. China.

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SUGGESTED PRINCIPLES AND GUIDELINES

Organizations need to implement the CRM systems innovations to become more competitive
locally and globally. The CRM systems enable organizations to manage the customer
knowledge effectively. Managing customer knowledge enables the organizations to serve
customers better, to satisfy customers’ needs, and to anticipate their future needs.
Based on the previous critical review of the existing implementation methodologies of CRM
systems, this paper provides a set of principles and guidelines to be embedded in any
implementation plan and methodology of CRM systems. Firstly, before implementing the
CRM systems, the management of the organization has to give a great attention towards the
communicating and sharing of the understanding within the organizations regarding the main
benefits of the systems to all parties in the organization.
Secondly, the implementation of the CRM system must be based upon proper guidelines: The
existence of such guidelines will create a clear path for the implementation, rational
allocation of resources, and proper settlement of tasks and responsibilities in which the
successful adoption and implementation of CRM systems can be quarantined.
Next, the organization must have a clear plan for the end users’ training on the CRM system:
The importance of the training and education for the end users on the use of the CRM
systems have been emphasized by many researchers (e.g. Zhedan et al., 2007; Caldeira et al.,
2008; Maleki & Anand, 2008) because the CRM systems are more sophisticated than other
IS. The training programs could be initiated with the cooperation of the government or the
vendors of the CRM systems in the form of seminars, workshops, presentations, or
conferences. These programs will produce qualified personnel for the effective and successful
implementation of CRM systems.
Besides, the CRM strategy must be embedded within the organization vision: The importance
of this point has been emphasized by Jun-Wu (2008) and Langerak and Verhoef (2003). They
argue that it is important because embedding the CRM principles and value within the
philosophies and dreams of the organizations will facilitate the acceptance and usage of the
CRM systems.
Also, the implementation of CRM system must be based on the technological readiness
assessment of the organization: Many previous studies (e.g. Croteau & Li, 2003; Payne &
Frow, 2006; King & Burgess, 2008) suggest for the need of the CRM readiness assessment
before implementing the CRM systems. The assessment of the organizational technological
readiness will provide indications for the organizational abilities and capabilities for the
usage of new technologies. In addition, it will enable the organization to anticipate the
volume of change and business process reengineering required in the organization.
Nevertheless, the end users must be involved in the design and development of the CRM
system: Allowing the end users to participate in the development, design, and defining the
requirements of the CRM system in terms of the matching with their needs and expectations
will increase their acceptance of the system. In contrast, it will decrease their resistance to the
systems as they will have the feeling of doing what they want and choose to do. In fact, it has
been emphasized by many researchers such as Maleki and Anand (2008), Payne and Frow
(2006), and Wilson et al., (2002).
On top of that, the implementation of the CRM system must be based on a phased rollout
schedule: Dividing the implementation of the CRM systems into phases with specified
outcomes within a schedule with clear mile stones will contribute in increasing the success
rate of the CRM systems implementation.

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On the other hand, the CRM system must be integrated well with the other organization IS:
The integration of the CRM systems with the other information systems will help the
organizations to create a single view or a single profile for each customer. It will enable the
employees to get any piece of information about any customer wherever it resides. Hence,
this will increase the accuracy and speed of their response to customers and enhance the
decision making process in the organization.
Additionally, there must be a champion available all the time to support the CRM system
implementation. The existence a person who is able to lead people, to encourage people, to
influence people and to support people during the implementation of the CRM systems is
highly necessary to ensure the achievement of the objectives toward the successful
implementation of the system.
Lastly, there must be measurement systems and metrics for measuring the CRM system
effectiveness. The existence of criteria for the evaluation of the systems effectiveness is
highly necessary to ensure the achievement of the predefined objectives and to carry out the
continuous improvement and enhancement of the system to meet any future needs.
CONCLUSION
CRM systems provide many promises for organizations such as improving customer
satisfaction and increasing organizations productivities and revenues. The successful
implementation of CRM systems was very limited in different industries. This paper reviews
three main implementation methodologies of CRM systems namely; iris, six-sigma, and Jun-
Wu methodologies. It includes a comprehensive comparison among the three methodologies
regarding the CSFs, strengths, weaknesses, and the industry of validation. In short, a set of
principles and guidelines are suggested for the successful implementation of CRM systems.
They should be included in the implementation plan or the implementation framework of the
CRM system.

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ISSN-L: 2223-9553, ISSN: 2223-9944

Academic Research International Vol. 4 No. 6 November 2013

IMPLEMENTATION METHODOLOGY OF CUSTOMER

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

CRM IMPLEMENTATION METHODOLOGIES

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

The explanation of the

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

SUGGESTED PRINCIPLES AND GUIDELINES

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

[15] Lindgreen, A. et al., (2006). A relationship-management assessment tool: Questioning,

Part-III: Natural & Applied Sciences SAVAP International www.journals.savap.org.pk

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