CRM Case Study

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It will be necessary for you to research CRM strategies and/or implementation in Russia to formulate your responses.

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Questions

Assume you are James Williams developing a presentation on CRM in Russia for the Board of Directors of AMIR limited:

1. Identify strategies for the CRM project implementation.
2. Identify reasons contributing to the failure of the CRM implementation at Mashkin.
3. Discuss the current state of CRM practice in emerging markets using the example in Russia.
4. What additional challenges might companies in Russia face in implementing CRM projects?

Article below:

CusrouER REr-ATroNSHrp MANAGEMENTStnetBcv(A TnecHrNG Cesu Sruov)Tamilla Curtis.Nova Southeastcrn University317 Aleatha Drive, Davtona Beach, FL 32114Donald BarercNova Southcastcrn Univcrsifi,1900 Pelican Landing Blvd, #1t)23, Clear-water, FL 33762Tom GriffinN c.rva Southeastern University2900 NE 30th St. Unit 8G, Fort Lauderdale, FL 3330(rDespite the benefit afered lry ilte integration of cuttomer relationsltip management (CkM) strategywith aduanced lechno/0g,, manlt companiu ii//fail to see competitiae aduautage results protnbed b1CRM.’I’his case stadl proaides a platformfor student anafisis and discassion in lhis area.This case ttud1 is presented in two parts. Tlte frst part descibu the unvccessfal inplemenlation ofan integrated CRM ysteru witbin a ntidsiqefnancialfrm based in the (J.l; the second partprouidesan oueruiew 0f CkNI deueloptrent in kusia af huo telecomruunication companies. Suge$ed tlueilions.for discassion are presenled. Appendix A prauides an oueruiea of CkM that can be eruplayd al theoption rf an instractor tct transition between a spectfic curicu/urt and the case. Teaching ncttes(inckding exanple respzltrr,i for each discussion question) are aaailable b), contacting thecome$onding author.Telephone: 386 226 7173e-mail: cuttist(@erau.edu53

afnternational Business: Research, Teaching and Ptactice2008 (2) 1MesnrcN GRoupN{ashkin Group Inc. (N{ashkin), a wholly owned subsidiary of Amir Inc., a Britishfinancial conglomerate, is a medium-size, asset-managemerit group based in theUS. Mashkin consists of three primary dir.isions: a mutual fund company with$10 billion in assets; a separate, but closelr,- affiiiated asset management companvrvith $15 billion in assets; and a financial services company. Since the early 1990s,these three enterprises have shared the same client database and other softwareprograms. The first program utilized, an inexpensive, off-the-shelf system withlimited capabilities, was used by the sales department of both the mutual fundcompany and the asset maflagement company primarily to store names,telephone numbers, and notes of salespeople. A second progtam was used by theIT department to update the database as new clients arrived and record daily salesdata. A third program was installed at all internal and external salespersons’workstations and laptops to provide current data to the sales force. In addition,the Client Service Call Center used a sepa(ate designed-in-house program to trackincoming call activity.The technology systems utilized by employees in N{ashkin were designed tosupport general sales activities. None of the software was designed specifically forthe needs of their financial divisions (either the murual fund or the assetmanagement side) and lacked the anaiytic functionality as weil as the collaborativefunctionaLitv to interface with other systems rvithin Mashkrn. This limitedfunctionaliry of technologv forced emplovees to spend an inordinate amount oftime manuall1, jumping bctween applicauons and creating new reports to importand export data between applications that could not be cr-rrrentil, integrated.Srgnificant effort was also expended in e-mail and other communicationsbetween users throughout the firm to collect information that rvas not recordedin the system.STorking around the limitations of the technologies had been possible whenthe sales volume and number of clients was small, but with the expansion of thecompany the situation had become unacceptable. Management felt that it wastime to implement a comprehensive CRM strategy with integrated technologyspecific to the needs of their financial divisions (both the mutual fund and theasset management sides). The three companies undet the umbrella of Mashkinshared the same objectives for their new CRM approach:1.To pror.,ide superior service to customers inaddition to the benefit ofthe core ptoduct;2. To identify, focus on and retain key customers;3. To develop customer’s profiles; and4. To improve managerial decisions and workflow.54

Cunis, Barerc & GdffinCRM Case SrudyThe desired (and expected) outcome of the new strategic approach, whichincluded the internar ‘rorguniru,ion or the use oi ,.rorr..s, was increasedproductiviq’ through ar,””r “..”* to comprehensive client recofcrs; fasterresponse ro customer needs; better reporting ana ^rrri1.ri.ai capabilities; reducingdupti c a ti o n o f e fro rts ; ^” d il ;;;, “.;;;;;;,;# lr.i,io,u r,. r.:THB CRM pnoyecrIn order to deal with the- complex issues of identification anclimplemcntation of ,r,. ,pprofrirr.^cnu pr'”grr-,’^ iiM trrkforce was formedconsisting or m1119eriri i.rr.i “-ptoy..r. wi.,it. ir;g;^;;_, have rhe resourcesrequired to buy comprehenrir,” ..,jtom svstems, ,r.r4r.. firms are often forcecl touse low cost, off-the–shelf p.”au.,r, -odify produ.i, a*”r”pecr for other firms,or build a sysrem in-house; ,”d l; Mu”tLir,r;;;rir” budgetary constraintsprohibited the outrigh, p.rr.hrr” o i^a fury-“gr;;;;:;;;.- sysrem. ,{n outsidecRN[ consurtant wai hired to ur.ir,’i.r rrr. pr”‘gr;’rrii’rr.rp se]ect an off_the_shelf integrated sysrem for use trlro,rgho.l; ,r- ?Im. working with theconsultant’s input, the task force determh.a tn. :”;d;., the impremenradonprocess inciuding sofrware ,.qoir.-.rtr, r,endor ,Ii..tio.r, budget, projecttimeframe, p.rs.,i-rn.r involved ;;;-;r.. training. Aft.r Lorrth, oi.._,mpuringprograms thar could be adaptecr to the unique leeds or-,r_,. companies withinMashkin, one was seiected ,i-,^, *^ successfu,y^- ,r. Ly a sim,ar, but rarger,firm’ Mashkin finany .”-*iii.a’io , .rror.n CRM ,yri._ and the softwarelicenses were purch^r.a. ,r. ii dJprrr*.r, ensured that arnerworks for thenew CRM prog.ram were in pt”… fi. new system was popuiated with currenrdata that was tia.,sfer..a rroirli-,-” “ra ar,^u^J;. ;; ;;;J’,” minimize risk, thelr1],.J:”-s were left in pir.”*,i “rr, purnu.t with th. ,rewty instat.led cRMDespite careful planning Mashkin faccd major challenses c’rrino rh^ ^-^:^^-implemen tation. rhe co s t o i the “.* cry,1,: ;; #ffiff ;i::i:.Hr.Tli.jbc subsrantialJl’ grcater rhan was budgetcd. conrrovcrsiar issoverruns began surfacing ar eve{, b;;r”J meeting. iues concerning costIn the process o_f dataffansfer tens-of thousands of client fires with contactnotes and crient prof,es were ,ru.,rr.r..d ura ^gu;;.i, ,iun.r, regard to theirchr,nol.gy. This rack ,f .hr,,n.,r.rg1.-..rn, users had r’scr’, through years ofnores ro iocare recenr enrries nnd ,iou. rhem near ,n” ;;;, rhe fire in order rorender them useabr5. .The nt., -o*’nrr..,.a *.r;’il”r”. -Jr to.,g_,r_e crients,many of whom had. done b.rsin”ss *r,i ,f.. firm for 10 orclients had lengthv fires-that *;;;;j” .,.-b.r.o-. ,”i irin.I:i: ffi;:i:r;result of rhe data rransfer. a-“rg;hl’ri.r., tho,se doing heavy sares vorume ancrthose atrempting to grean useabr: ;;;r-;r, of the ,..rirul.i’ fires were afFecreclmost’ user efficienciis in this ,.rr-,rrr”].ptimal system declined further.iir;1,-*ir55

7Intemational Business: Research, Teaching and Practice2008 (2) 1Another shortcoming was user training. The firm provided on-line trainingof sales personnel in the new CRM system, but the system $/as based on on-demand user training and there was no structure in place that ensured employeescompleted the training instead of merely employing it as a “Help” system. Asemployees left and new ones replaced them training deteriorated to an associatespending a few miriutes demonstrating the system to a new employee, who wasultimately left to figure it out on their own. While an integrated CRM applicationspecific to the financial industry was implemented, financial advisots andsalespeople were not utilizing it. The end users prefetted to rely on oldtechnologies and iuggled different applications instead of using the newlyinstalled, comprehensive CRM system. Ultimately, the outcome of the CRMimplementation at Mashkin was completely the oppo$te of what managementenvisioned with end results of employee confusion, whsted money and lost time.AMIR LrurtBoAMIR, a British financial conglomerate with a large telecommunicationdivision, was interested in further expanding its business operations and wasinvestigating opportunities in the former Soviet Union for its financial servicesdivision. AMIR’s Board of Directors sought information on the current state ofCRM practices in Russia with particular intetest in any specific challenges thatmight be faced in implementing CRM strategies in Russian ftms.James Williams, a senior project advisor with AMIR’s intetnational divisionwas tasked with developing a presentation on CRM in Russia for the Board ofDirectors. Prior to joining AMIR, Williams had been program manager ^tMashkin and a member of the task force that had steered the unsuccessfi.rl CRMproject.l7illiams was given the following report ptepated by a manager at AMIR’stelecommunications division who had been given a similar tesearch task focusingon the communications market., ,’ it’,, i 1.,, i-,r,REPORTTOMANAGEMENT :CRM IN THE TELECOMMUNICAT’OilS ‘IVDUSTRY’IV RUSS’ASrnce fhe collapse of the Sovief Union in 1991, market reform inRussra has resulted in dramatic changes in the business crmafe. Economicreform resulted in a massive transfer of government ownership to theprivate secfor (Hisrich, 1996). The economic restructuring reform promotedeconomic growth ln Russra by making a transition from central governmentcontrol to a market-based economy with large opportunities for foreigncapital and investment,56

Curtis, Barrere & GriffinCRM Case StudyThere is an indication that foreign and Russran parTners have differentviews of underlying busrness principles. Due to the emphasts of Russianmanagement on collectivistic approaches fo buslness and reliance oncapital and functional aspecfs over human assefs (Katsioloudes andlsichenko, 2007), a large number of foreign investment companies sfartedjoint ventures with Russian companies. Ihe Russian market’s orientationhad previously focused on processrng inventory with emphasis placed onsupply rather than on consumer demand. As a result, Russlan companieslargely ignored the consumer (Hisrich, 1996). ln the changing economicconditions, many firms ln Russia were forced to create new methods ofdolng busrness.CRM, a relatively new concepf ln Russra, started to gain recognition inearly 2000. The finance and telecommunication industries are the largestsecfors currently employing CRM strafegies. Wagner indicated,”Contemporary Russian marketing practices cover only a narrow spectrumof the diversity of marketing practices observed in other nations, andoverall intensity of marketing activities ls low in comparison withinternational benchmarks” (2005:1 99).Io address the needs of the accelerating Russian’CRM market, theCRM Association was founded in July 2004 to:’:bonduct CRM forums,conferences, and discussions; fo assisf organizations with training; todistribute publications in order to increase auvareness about CRM buslnesspractices; and to conduct research. The overall goal of the CRMAssociafion is to build CRM awareness and share the best technologiesand practices, Ihe first CRM congress was held in Moscow in December2004, where the besf Russian CRM projects were presented and new CRMsystems and approaches were dlscussed. More than 350 top managersfrom Russia n and international companies participated in the congress.lndustries included financial serulces, pharmaceutical, marketing,telecommunication, and others. ln March 2005, Microsoft Corporation,together with DataArt (a provider of high-end software outsourcing serulceswith headquafters in New York), conducted a CRM sysfems seminar in St.Petersburg, Russia fo address the development of new CRM so/ufions.The leading global busrness technology event, the lnterop MoscowExhibition, supported by the American Chamber of Commerce in Russia,was held in April 2008, and provided opportunities for internationalcompanies to examine fhe Russian market and to display the latesttechnologies available in the CRM area. According fo speciallsfs, Russlacurrently represenfs large investment opportunitiesi’for foreign CRMtechnology and consulting companies, ” ”!:57

fntemational Business: Reseatch, Teaching and Practice2008 (2) 1EXAMPLES OF CRM PROJECISAlthough academic research on CRM developmenf ln Russla is minimal,the implementation of CRM practices are evident in the example of twotelecommunication providers: Svyazinvest (a national provider); andMegaFon-MoscoLv (a regional provider).Svyazinvest is a telecommunication investment joint stock companythat was formed by consolidating shares owned by the federal governmentin regional telecom operations during the priuatization of thetelecommunications secfor. lt is considered one’ of the largesttelecommunication holding companies in the wotd (Svyazinvest, 2008).Svyazinvest incorporates seven large mega-regional telecommunicationsoperations, and national domestic long-distance and internationaloperations. The holding company’s subsidtaries operate public telephonenetworks with capacity exceeding 32.4 million telephone lines. ln 2005,Svyazinvest, together with IBM and Amdocs (fhe provider of billing andCRM products and seryices for integrated customer management), beganthe largest CRM billing modernization projectin Russia (GlobalTechnologyUnit, 2005). This project was desrgned to replace more than 180 ofSvyazinvest’s billing sysfems across seven regions with Amdocs products,and included the implementation of new voice and data services for ifssubscribers. The CRM project was conducted in several phases, includingthe introduction of a single billing system across Svyazinvest operations.The new CRM sfrafegles and technologies eventually will provideSvyazinvest with the ability to connect different operations located indifferent geographic regions under one umbrella. This will give employeesthe ability to get a single comprehensive view of consumers. Overall, theimplementation of new technologies is expected to give the company acompetitive advantage by developing the efficient, ald’,effective networkinfrastructure in order to provide a high-quality telecoiimunication servrcefo lfs subscrlbers.i’lMegaFon-Moscow, a division of the MegaFon Grouptelecommunication company, and one of the first Russian mobile operatorsin the Global Sysfem for Mobile communications (GSM,), was formed at theend of 2001 due to reorganization of severaltelecommunication companies(MegaFon-Moscow, 2008). MegaFon-Moscow ls one of the three telecomproviders responsib/e for the wrreless network coverage of the Moscowregion. The cell phone market has experienced tremendous growth inrecent years in Russra. Currently MegaFon-Moscor,v has more than fivemillion subscribers. ln March 2005, company management made adecision to implement the Amdocs CRM technology (MegaFon-Moscow,2005). The new Amdocs automation resulted in many advantages, such as58i ,,.,,J

Cuttis, Bartete & GriIlEfiCR-tuI Case Studytime saving for consumers calling the call center, an increase in thenumber of customer’s cal/s taken, and a better call routing structure. NewCRM technologies allowed MegaFon-Moscow to link call centers with itssfores, and to provide better access to customer information data. AmdocsCRM was able to consolidate MegaFon-Moscow data into a single unifiedplatform, which is fully integrated with existing billing systems. Customerseruice employees receive fasf access to customer data, giving them theability to respond quickly to customer’s reguesfs and provide a high level ofcustomer seruice.l7illiams finished teading the report and reflected on the manager’s analysisof CRM practices in Russia and his own experiences at Mashkin.QursrIoNs Fon DrscussroN:Assume you are James $7illiams developing a presentation on CRM in Russia forthe Board of Directors of AMIR limited:1,. Identify strategies for the CRM project implementation.2. Identify reasons contributing to thd’:’failure of the CRMimplementation at Mashkrn.Discuss the current state of CRM practice in emerging marketsusing the example of Russia.What additional challenges might companies in Russia face inimplementing CRM projects?RBrpnpNcssHisrich, R. D. (1996) The Russian distribution system: Problems for entrepreneurs andnew venture efltrance’, Manageruent Rttearch News, 19(8) : 1 – 1 8.Global Technology Unit (2005) IBM and Amdocs undertake Russia’s largest wirelinebilling ptoject’, [www document]http://www-05.ibm.com ltl/gru/success/amdocs.html (accessed 15 March 2008).I(atsioloudes, M. L & Isichenko, D. (2007) ‘International joint ventures in Russia: A recipefor success,’ Man age m e n t Re s e arch l{ e tt s, 30 (2) : | 3 3 – I 52.NlegaFon-Moscow (2008), [www documcnt]http://english.rnegafonmoscow.ru/abourf generalf (accgss3d 20 Apri12008).MegaFon-Moscow (2005) ‘MegaFon-Moscow to implement Amdocs CRM solution’,[wwv, document] http://u’w-w.crm2day.com f oewsf crm/EEplpFykVkkEN{wltbc.php(accessed 25 February 2008).:-.;, .).4.59

Intemational Business: Research, Teaching and Practice2008 (2) 1Peppers, D. & Rogers, M. (2004) “Roots of Customer Relationship Management”, inManaging Customer Relationships: A Sttategic Framework, John Wiley & Sons, Inc.:Hoboken, pp.5-8.Srryazinvest (2008), fwww document)http:/ /eng.sryazinvest.ru/about/ (accessed 25 April,2008).\X/agner, R. (2005) ‘Contemporary marketing practices in Russia’, European Joantal ofMarketing 39(1. /2): 1.99-21.5

 

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