Management Research Project Customer Relationship Management in Services Focus: Educational Institutions Submitted By: Mritunjay Kumar ICFAI Business School/Hyderabad[Submitted in Partial Fulfillment of the requirements of the 2-Year Full-Time MBA Program offeredby ICFAI Business School, Hyderabad for the academic year 2006-2008]
Customer Relationship Management in Services Focus: Educational Institutions A REPORT ONCustomer Relationship Management in Services Focus: Educational Institutions By Mritunjay Kumar Class of 2008 IBS/Hyderabad A report submitted in partial fulfilment of the requirements of MBA Program 1 Page
Customer Relationship Management in Services Focus: Educational Institutions TABLE OF CONTENTS Page No.Abstract -- 03Introduction -- 04Managing CRM in EducationalInstitutions -- 05Road to Framework Development -- 10CRM in Educational Institutions -- 14Developing a Framework -- 15Some Examples -- 24Conclusions -- 29Scope of Further Study -- 30References -- 31 ***** 2 Page
Customer Relationship Management in Services Focus: Educational InstitutionsAbstract"CRM is the business strategy that aims to understand, anticipate, manage and personalize the needs of anorganizations current and potential customers" - PWC Consulting.Investing in a Customer Relationship Management (CRM) application is no different thanany other business management software investment - whether one is looking for anenterprise level software application or a department level solution, one expects a quickand measurable return on the investment. Before investing in a CRM application, severalaspects of the application including its features, support for existing and emergingtechnologies, initial cost, ease of use, integration with other applications, and many moreneed due consideration. One of the most important aspects of a business managementapplication, including a CRM application, is its underlying architecture. A well-designedarchitecture will accommodate future growth and adapt to business changes withoutaffecting the performance of the application or requiring an exhaustive re-implementation.An application’s customizability, adaptability, portability, scalability and extensibility are allfunctions of its architecture. But that is the functional aspect.CRM goes way beyond a software solution. In real terms CRM is a philosophy and thesoftware solution part is a mere tool to aid better implementation of the philosophy. CRMhas existed since ages. Be it the corner betel shop owner who recognizes a regular customerand offers him his regular betel or a technologically advanced Call Center’s executive whoaddresses a customer by his name when he makes a call by looking up in his database forthe customer’s detail.This paper tries to understand this philosophy and its uses in the high customer churnvulnerable service sector. One of the industries in this sector is the educational industry.IT solutions presently represent a critical success factor for numerous organizations. Highereducational institutions fall into this category and have sought the status of first movers inrelation to the development and implementation of information technology throughout theareas of academia. However, “In comparison, little research has been published with regard tousing Internet technology to aid in administrative academic issues in higher education” (Bitler,2000). This paper will try to find the uses of a CRM solution in aiding the educationalinstitutions improve the customer satisfaction levels and for this purpose development of a 3 Pagebetter CRM or SRM (Student Relationship Management) framework.
Customer Relationship Management in Services Focus: Educational InstitutionsIntroductionMore and more organizations and companies have realized that they need to put theircustomers front and center and to support a robust strategic customer care process,including profiling customers, segmenting customers, researching customers, investing intechnology, and managing customers (Brown, 2000).This move toward more customer centric direction can be traced back to the 1960s whenthe focus of marketing started to shift from managing products or marketing campaigns tomanaging the profitability of each individual customer over the entire life of therelationship. The paradigm shift brought lots of discussions on “relationship marketing”since the 1980s (Berry, 1983; Håkansson, 1982). Relationship marketing aims to identify,maintain and build up a network with individual customers and to continuously strengthenthe network for the mutual benefit of both sides through interactive, individualized andvalue-added contacts over a long period of time (Shani and Chalasani, 1992). However,relationship marketing focuses mainly on strategy, and lacks a holistic view of the businessprocesses connected to it. CRM evolving from business processes emphasizes not only acomprehensive strategy, but also the process of acquiring, retaining and partnering withselective customers to create superior value for the company and the customer (Parvatiyarand Sheth, 2000).Second, while companies and organizations are making efforts to keep pace with theparadigm shift in marketing, customer needs, expectations and behaviors are also changing.Customers do not only want services; they want “good” services, which possesscharacteristics like “ease of doing business, trust, responsiveness, web site navigability,problem resolution and all those other elements of good e-business that dont fit quite soneatly into a purely binary world” (Zemke and Connellan, 2001). Javalgi et al. (2006, p. 12)also pointed that “in todays hyper-competitive markets service firms must be market-oriented”. As “knowledge is key to nurturing customer relationships” (Lavender, 2004),“market research plays a critical role in generating the needed data on which a marketorientation can be developed and implemented, which, in turn, can enhance the practice ofCRM” (Javalgi et al., 2006). Therefore, CRM is considered as a means of supplementing ERPsystems to match customers needs and increase their satisfaction. 4 Page
Customer Relationship Management in Services Focus: Educational InstitutionsManaging CRM in Educational InstitutionsCustomer relationship management (CRM) is a set of practices that provide a consolidated,integrated view of customers across all business areas to ensure that each customerreceives the highest level of service (Karakostas et al., 2005; TDWI Industry Study, 2000).CRM enables an ongoing one-to-one relationship with the customer.In higher education, students are the customers; some areas that touch the students are theregistration processes, transcript services, career counseling and academic support services.Graduating high school seniors today have a wide variety of choices in higher education;competition for their business is keen, especially in a tight economy.Students can choose four-year degrees like engineering, technical schools in a face-to-faceor online learning environment. While the academic reputation of a school is a major factorin determining its selection, other performance indicators that prospective students mayexamine include pass rate of licensure examinations, improvement in critical thinking andcommunication skills, alumni satisfaction with their college experience, and the percentageof graduates who find employment (Cleary, 2001).Satisfaction with the college’s programs and services is also a critical performance measure.CRM can play a significant role in this area. While being able to obtain information about acourse prerequisite or a schedule listing is not germane to the student’s learning, it isnonetheless an integral part of the college experience. Most students view administrativeactivities as a necessary evil; thus, an information system with an enhanced CRM initiativethat provides an individualized fast-track to completing these activities can be a strongincentive for selecting a particular institution.A very important part of any educational institution is a library and at times can be a crucialfactor for enhancing or reducing customer satisfaction levels. In a paper titled: IntroducingCRM into an academic library (Mei-Yu Wang) talks about this experience and the same canbe studied as a model for educational institutions as the basic base for business is samerelating to educational bodies.In the paper Wang points out that the automation systems utilized in libraries, similar to theERP in enterprises, mainly deal with the standardized service procedures. Meantime, if alibrary fails to satisfy user needs/wants, their users will try to look around for something 5better. If the library can occasionally meet or exceed user standards, users will have a sort of Page
Customer Relationship Management in Services Focus: Educational InstitutionsAttention Deficit Disorder (ADD), because libraries give them little or no compelling reasonto behave otherwise. In either situation, there will be a decline in the librarys status. Thesituation in the digital world is for the worse. The consequences of poor services aremagnified and instantaneous. Just as pointed out by Zemke and Connellan (2001, p. 12):“treat customers badly just once online, and not only will they never come back, butthrough chat rooms and broadcast e-mail they will tell potentially thousands of otherconsumers about their careless attitude”.Libraries cannot ignore that IT and www have offered new possibilities for delivering userservice. The “go digital” trend is making library staff feel that it is “a daunting task to keepabreast of the new resources that appear daily on the Internet” (Lipow, 1999). More andmore libraries have found that they must use more select methods and channels to learnwhat their users want and tailor their services accordingly. This is clearly elaborated by theappearance of such new terms as virtual reference, online reference, e-reference, live chatreference, online real-time reference, virtual community, etc. (Moyo, 2002; Young and Diaz,1999; Hoag and Cichanowicz, 2001; Flagg, 2001).Therefore, it is time that libraries consider to adopt more CRM concept and applications asone of the possible solutions to secure users satisfaction while facing the challengesbrought by proliferated information service channels, information explosion, and usershigher expectations. Some libraries, such as University of Malta Library and LanchesterLibrary, University of Coventry, have used CRM as a framework for developing local servicesto meet local needs (Broady-Preston et al., 2006).“CRM is not a technology or even a group of technologies. It is a continually evolving processthat requires a shift in attitude away from the traditional business model of focusinginternally. CRM is an approach a company takes toward its customers backed up bythoughtful investment in people, technology and business processes” (Morrel andPhilonenko, 2001, p.8).However, it is crucial to elucidate the concept with respect to information systems andmarketing. Considering the marketing component, Kutner and Cripps (1997) suggested thatCRM was based on the following three doctrines:• Customers should be managed as important assets 6• Customers’ profitability varies – not all customers are equally desirable Page
Customer Relationship Management in Services Focus: Educational Institutions• Customers vary in their needs, preferences, buying behavior and price sensitivity.With regards to the information systems perspective, Curley (1999) stated that the CRMsystem included four main technological components: • A data warehouse with customer, contract, transaction and channel data • Analysis tools for examining database and identifying customer behavior patterns. • Campaigning management tools for allowing the marketing department to define communication and facilitate automatic generation of these communications • Interface with the operational environment for maintaining the marketing database and communication channels to deliver the messages.CRM today has grown out of its initial concept size. Today it covers a more holistic pictureand encompasses the customer service to new frontiers. From an initial reactive strategy itis now a more real-time and proactive way to respond to customer needs and demands.The core element of a CRM system is a data-base with data about customer characteristics(e.g., demographics; customer size, and industry for business-to-business customers), dataabout company-customer contacts, data about the way the customer has responded toearlier company offers, and data about the customer’s purchase history with the company(Glazer 1999). In addition, CRM systems usually contain analytical tools to analyze data andgenerate information that can be used for subsequent marketing actions. Furthermore,sales force automation, data warehousing, customer service automation and call centersystems can be elements of CRM systems.Fig.1 below explains the evolution of the business ecosystems has broadened up the scopeof customer service and response of the CRM strategies to it: Product Driven Demand Customer Driven Customer Centric Corporate Ecosystem Customer-Centric Ecosystem Reactive Real Time Fig.1: The Transformation of Business Ecosystems, Adapted from “CRM at the Speed of Light” by Paul rd Greenberg, P-11, Tata McGraw Hills Publication, 3 Ed., 2007. 7 Page
Customer Relationship Management in Services Focus: Educational InstitutionsCRM has been explained in various ways and the same applies about the understanding ofthe organizations and individuals about it. As per a study by CRMGuru (www.crmguru.com) thefollowing chart in Fig.2 gives a breakup of what the customer understands about CRM: What is CRM? 9 Putting Customers at the Heart of Business: 36% 16 36 Creating Win/Win relationships with Customers & Stakeholders: 23% Business strategy to increase Customer Profitability: 16% 16 Rlationship Marketing supported by Technology: 16% 23Fig.2: Source: “What is CRM?” Survey Results. www.crmguru.com: CRMGuru Online Survey, 4400Respondents, July 2003.So we can see that a major chunk of the respondents believe that CRM is about putting thecustomers at the heart of the business or employing a customer-centric approach. But whatdecides and drives the decision of how to approach the question of CRM implementationduring the whole lifecycle of a customer. 8 Page
Customer Relationship Management in Services Focus: Educational InstitutionsTable-1 explains the whole process of CRM implementation during the lifecycle of customer: Customer Relationship CycleStage Prospect Newly Acquired Peak Customer Declining Customer Relationship CustomerRevenue None Rising Rise, Peak or Declining Plateau, then start showing signs of DeclineCustomer Acquisition Building Cost of Retaining & Wind downRelationship Cost Cost Relationship Creating satisfied relation or retain Cost customers plus cost as alumnus of recruiting to the customer club of satisfied customers who give testimonials or referralsProduct &/or No Yes Yes YesServicing CostNet Cash Flow Negative Increasing Increase, Decreasing Peak/Plateau, Decline, plus indirect cash flow impact of recruiting customers (if satisfied) or discouraging prospects (if not satisfied)Table.1: Customer Lifetime Value, Suggested by Nobel Laureate Franco Modigliani. Adapted: “CRM at the rdSpeed of Light” by Paul Greenberg, P-656, Tata McGraw Hills Publication, 3 Ed., 2007 9 Page
Customer Relationship Management in Services Focus: Educational InstitutionsRoad to a Framework DevelopmentA customer relation needs to be supported at various stages of the relation lifecycle indifferent ways and evolves out over time as depicted below in Fig. 3: 10Fig. 3: Customer Lifetime Value Management Proposition, suggested by Nokia. Adapted: Nokia- Serving PageCustomers with Value, The Strategist, Special Issue, 2006.
Customer Relationship Management in Services Focus: Educational InstitutionsWhile it is agreed fact that CRM implementation if done with due prudence can helpminimize the costs accruing to loss of customers while increasing their satisfaction levelsand hence increasing the average spending by each customer.Looking at the sector for study in this paper which is educational sector and understandingits dynamics in the market the following comments seems very relevant and apt:“In fact, the admission process is a market in which the elements of cost, competition, hype,service, brand prestige, rebating, etc., all operate annually to distribute the supply of andsatisfy the demand for higher education. What makes the admission market peculiar amongmarkets, however, is that both buyer and seller are negotiating simultaneously amongst theofferings, each seeking to optimize their respective choices. The student seeks the bestcollege. The colleges seek to fill themselves with not just the “qualified” students, but withthat selection of students representing the best possible set from their candidate pools”.(BusinessWire, 2002)“Colleges often seem most comfortable with whatever “honesty” maximizes enrollments,short term, and that which identifies them closely with their preferred set of institutions.Prospective students want honesty that maximizes effective choice, long term, no matterhow they develop and change over the period of their enrollment”. (Canterbury, 1999)The rush for admission to a university or college is seen as a very important indicator of thebrand value and success of the organization and its customers i.e. the prospective studentsand parents evaluate the institutions on various parameters before making a decision to usethe services.With the changing market dynamics i.e. from an era where govt. bodies providededucational facilities, today private institutions play a very important role in the educationalsector. With the increasing demand for education owing to demographical changes thissector has expanded exponentially.CRM systems offer support in two different ways. First, CRM systems facilitate the day todayinteractions with customers. This way of employing the system has been called thenoperational use of CRM systems. Second, customer data in CRM systems can enable firms toleverage on data about their current customers (Kamakura, Wedel, de Rosa, and Mazzon 112003). The use of customer databases and analytical tools creates opportunities for cross- Pageselling new products and services to existing customers while also developing customer
Customer Relationship Management in Services Focus: Educational Institutionsacquisition and customer retention strategies, and for the optimization of customer equity(Blattberg, Getz, and Thomas 2001; Rust, Zeithaml, and Lemon 2000). Such use of CRMsystems is called the strategic use of CRM systems.The principles of the CRM approach are appealing and nowadays companies increasinglyorganize themselves around their customers. In a survey about management tools (Rigby,Reichheld, and Schefter 2002) 72% of the responding executives expected to have CRMprograms in place within a year. The CRM approach was found to be the fasted-growingmanagement technique in eight years. There is now a sizeable industry of suppliers of CRMsystems. According to a recent IDC estimate, the worldwide sales of customer relationsmanagement (CRM) applications (software) currently grows with 8.9% per year with a projectedrevenue level for the year 2008 of $ 11.4 billion.Though much has been talked about the ways to retention and servicing the followingmatrix in a snapshot explains the way to retain customers based on the way they perceivethe institutions and there vulnerability to end relation with the organization: 12Fig 4. A Retention Matrix suggested in Working Paper, Harvard Business School Publishing Corporation, Page2005.
Customer Relationship Management in Services Focus: Educational InstitutionsThe benefits that the initial study points out at in case of a successful CRM implementationby colleges and universities can be summarized as follows: • Improve the overall student experience through interactive, two-way dialogs by using applications like integrated email and web technology provided by modules like the “Online Marketing” in case of PeopleSoft. • Automatically guide students to specific services in specific circumstances to minimize hassles and curtail the cost of employing extra manpower. • Understand how the institutions can serve individual students better. • Discover situations in which students, who may be at risk of dropping out of the university, may be counseled and retained.During this study DePaul University’s name figured prominently for the implementation ofsuch a package in 2004. A brief introduction of the university is as follows: • Geography: Chicago, Illinois • Endowment: $192.3 Million • Employees: 4,251 Faculty and Staff • Students: 23,600 • Website: www.depaul.eduThe main quantifiable results that the university received from the implementation can beput as follows: Quantifiable Benefits • Achieved a four percent lift in retention of students at risk. • Received more than 50 percent response to online surveys. • Continuously engaged at-risk students through winter break, a key point when loss of contact with staff and connection to the university contributes to student attrition.Thus we can see that such implementations have benefits but at the same time we must notforget that it needs mustering a lost of dedicated resources and if the implementation goeswrong or lands in trouble owing to project overruns, it can lead to sizeable losses. In certaincases the losses have been so significant that the implementing institution has neared verge 13of bankruptcy if not actually went. Page
Customer Relationship Management in Services Focus: Educational InstitutionsCRM in Educational InstitutionsColleges at graduation and Post-Graduation levels are increasingly challenged to maintainstudent enrollment levels. Enrollment management programs to market the institution aregrowing in number and their efforts are paying off. Though enrollments in India might berising on an average for almost all graduate and PG colleges due to demographical shifts, thequality of students is not standardized across all the colleges. Some colleges are morepreferred while some lie at the bottom.The challenge is not only at the initial admission level. Once students arrive on campus,however, the challenge is to keep them there. Retention activities had focused traditionallyon comprehensive orientation programs, in-depth student advising, and a variety ofstudent-focused activities.Students expect technology to be an integral part of their entire educational process andanticipate a higher level of access to information. From the “student-as-customer”perspective, an educational CRM system would provide interaction with all the traditionalstudent touch points- admissions, registration, financial aid, etc. - through a single systemthat would facilitate a complete understanding of each student’s unique situation (Grantand Anderson, 2002).Students as stakeholders:All institutions of higher education have a variety of stakeholders, and while each institutionmust work to satisfy them, the stakeholder with the most influence is the customer. In thecase of an educational institution the customer being the student both current andprospective. The typical college student makes several trips to campus before classes start.These include one visit prior to college selection, a registration visit and another visit to payfees and purchase textbooks. While telephone and web-based registration systems havealleviated some problems, students are still faced with numerous administrative tasks to becompleted during their college careers. All too often, these tasks involve considerable timespent waiting.A CRM system can ease the complexities of accomplishing these administrative tasks byproviding a means of anytime-anywhere registration, as well as payment, advising and 14requirements checking that is individualized to meet the student’s needs. Page
Customer Relationship Management in Services Focus: Educational InstitutionsDeveloping a FrameworkAccording to the IT employed and the sophistication/integration of the information systemused, the CRM development stages can be divided into four stages (Stefanou et al., 2003): 1. The first stage: the preliminary, manual, and non-IT-assisted stage. 2. The second stage: IT is adopted to assist the predominately manual process (Wells et al., 1999). Spreadsheets, database systems and statistical packages can be used to analyze collected customer related data. 3. The third stage: the IT-automated CRM stage by using a number of technologies, such as the internet and telephone/computer integration. 4. The fourth stage: the integrated CRM (i-CRM) stage by employing sophisticated CRM information systems providing highly integrated back-office, front-office and internet functions in order to pursue customer personalization, high level of services and customer satisfaction. In order to dynamically monitor consumer preferences, analysis technologies such as statistical packages, query language, extraction software, data warehouse technology, data mining, collaborative filtering and rules engines may be used (Bradshaw and Brash, 2001).As of now almost the educational bodies have crossed the first stage. Today almost all thebodies of education use some level of automated IT assisted processes to handle customerneeds and this has reduced the time needed to complete some processes significantly.Though it is still an issue of debate and study as how much the data collected through theseprocesses is drilled, mined and used for quantifiable benefits.Thus we can see that the CRM is basically talking of integration of data on three dimensions: i. Operational ii. Analytical iii. CollaborativeMany organizations wonder what to do with the data that they have on there systems. Mostof the times, valuable data is flushed out of the systems as the organizations have no ideawhat the data can be used for or what are the potential benefits of analyzing it. Now withgrowing interest and buzz about datamining and CRM solutions most organizations have 15started understanding the potential benefits and are acknowledging the same. Page
Customer Relationship Management in Services Focus: Educational InstitutionsSo once we have a fair idea about the usage of the data and the same has been generatedwhat is the next step?Although more and more organizations and companies have “begun to use the Internet toobtain customer information in their database marketing processes to enhance customerrelationship management” (OLeary et al., 2004), very few have employed sophisticated OLearyCRM information systems. At this stage many complicated issues are involved, such as howto store CRM data, where to store the data, how to extract meaningful knowledge from thedata, and how to make the “knowledge” easily accessible to the right person in time. Thedata mentioned here includes server log data, data that users submit during a registrationprocess and any other process, data from transactions, and data that can be collected viacookies (Rowley, 2002). Even in the case of simple intranet sites this can be monitored by nthe system administrators and patters can be analyzed based on the user defined queries.CRM systems can manage and synchronize customer interaction points and communicationchannels, and these are the collaborative type of CRM systems (Schwede, 2000 Fig.5). In Schwede, 2000,addition to collaborative CRM, the systems can be operational or analytical. The operational .type is intended to improve the efficiency of CRM business processes and comprisesolutions for automation and customer interaction management. The analytical CRM mationsystems manage and evaluate knowledge about customers for a better understanding ofeach customer and his or her behavior (Schwede, 2000). (The types of CRM talked above can be resembled in following Fig.5 below: foll 16 PageFig. 5: The Three Dimensions of CRM, Schwede, 2000.
Customer Relationship Management in Services Focus: Educational InstitutionsThe architecture of an Analytical CRM structure can be depicted as per following Fig:Fig. 6: Structure of an Analytical CRM Date Warehouse.So how we decide what to keep unchanged, what to improve upon and what to replace?This basically requires a SWOT analysis of the conditions after a initial identification of thedimensions of the organizational efficiency vis-à-vis the KEY DIMENSIONS of the CRMframework itself. The need of the organization also defines the parameters and ways nwhich the framework would be set up.A basic CRM system should allow organizational staff to post and link useful materials, allowusers to make requests and comments to the system, and offer a bi-directionalcommunication channel with their users. A more advanced system should be able to routerequests and track the process on course. In addition, data warehouse and dataminingtechnology may be used to incorporate various data, to extract meaningful pattern, and toprofile individual users or some specific users.One possible scenario to commence the CRM process is illustrated in Figure 6 about thelibrary situation itself. 17 Page
Customer Relationship Management in Services Focus: Educational InstitutionsFig. 7: A Process Description of CRM in a typical Library situation.A user makes an inquiry to the system. After verifying the user status, Library Clerk no. 1logs the question, which serves as a basis for follow-up on the users problem as well as adata point for evaluating the effectiveness of the CRM effort, and then triages the inquiry toLibrary Clerk no. 2, who is more qualified and available to handle the problem. Library Clerkno. 2 works with the user to clearly define the problem, and researches the problem withLibrary Clerk no. 3 to find the solution. In this case, it is Library Clerk no. 3 who documentsthe problem and the progress, posts the answer to the system, and closes the case.Another simplified example scenario: imagine a librarian discovers that the story-telling timeon Wednesdays draws more children and parents than that on Saturdays. She attempts tohold a new series of parental workshops on Wednesdays, but she needs more informationin order to market the campaign to the right customer segments and generate their interest 18in these workshops. Through the bi-directional forum, the library can announce loudly the Page
Customer Relationship Management in Services Focus: Educational Institutionsworkshop activity, or send individualized activity notice. The opinions and feedbacks caneasily be collected and routed to the library staff in charge.Almost all the educational bodies face challenges in two areas: i. One being great shortage of human resources to man various peripheral operations like administration, library etc. ii. The other usually is the increasing demands for more proactive, proficient and prompt services from the customers (here students).Discussion of findingsAlthough the benefits of CRM concept and technological applications have been promotedand emphasized, some surveys reveal the opposite. For example, Gartner Group and othersdiscovered that approximately 70 percent of CRM implementations fail to meet basiccompany goals due to the lack of executive sponsorship, relying on technology to fix badbusiness practices, poor system design, unrealistic expectations, lack of sufficient training,etc. (Davis, 2002; Eager, 2002; Gefen and Ridings, 2002).To sort hype from genuine opportunity, the steps suggested to success were followed(Andersen and Jacobsen, 2000; Eberhardt, 2001): i. Accurately assess CRM needs and set precise goal ii. Understand customers value, needs, requirements and behaviors iii. Involve all staff affected iv. Motivate the staff willing to participate v. Communicate continually with interested parties vi. Avoid over-specialized solutionsvii. Be critical in choice of methods, tools, equipments, etc.In the case educational bodies it is self explained that users are less likely to defect as theystudents, teachers and staff in the university. Once a user discontinues the relationship withthe university, he/she will not usually bother for her/his relation with the institution. Thismight have been true and good some decades ago but today even after a student passesout of a course he/she is still of value especially in cases of organizations conductingprofessional courses. These alumni members act as a bridge between the college and thecorporate world and help the placement process for the batches preceding theirs. 19 Page
Customer Relationship Management in Services Focus: Educational InstitutionsToday with students joining more and more professional courses in place of conventionaldegree courses such alumni relation has become more important to colleges.The part to motivate and make the organization ready for this change is also very critical.This needs measured Change Management techniques to be put in place and implemented.Change management can be divided into two basic areas: 1. Plan for change. 2. Manage change.Planning for ChangeThis begins with making a good case of need to change to be understood by others whichcan be understood as follows:Fig. 8: Making a case for change, Transition Leadership,http://www.mercdelta.com/organizational_consulting/PDFs/insights/ins_Transitional_Leadership.pdfaccessed on 17/03/2007.The next step is to identify and weave in all the components of the Change Process whichcan be understood in this Integrated Change Agenda framework: 20 Page
Customer Relationship Management in Services Focus: Educational InstitutionsFig. 9: Integrated Change Agenda, Transition Leadership,http://www.mercdelta.com/organizational_consulting/PDFs/insights/ins_Transitional_Leadership.pdfaccessed on 17/03/2007.Managing the Change:John Kotters highly regarded books Leading Change (1995) and the follow-up The Heart OfChange (2002) describe a helpful model for understanding and managing change. Eachstage acknowledges a key principle identified by Kotter relating to peoples response andapproach to change, in which people see, feel and then change.Kotters eight step change model can be summarized as: 1. Increase urgency - inspire people to move, make objectives real and relevant. 2. Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels. 3. Get the vision right - get the team to establish a simple vision and strategy, focus on emotional and creative aspects necessary to drive service and efficiency. 4. Communicate for buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to peoples needs. De-clutter 21 communications - make technology work for you rather than against. Page
Customer Relationship Management in Services Focus: Educational Institutions 5. Empower action - Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognise progress and achievements. 6. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones. 7. Dont let up - Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones. 8. Make change stick - Reinforce the value of successful change via recruitment, promotion, and new change leaders. Weave change into culture.Usually any such system looks for the following functionalities which are though basic butquite useful given the limited resources they use: • Accessible through the web: Users can log into the system through the internet. • Site customization: To assist users to reach the needed information efficiently. The CRM system is suggested to offer customization features allowing users to filter the content they see, and if possible, the system should also provide customized service. In other words, once a user is registered, he/she will be provided only the information based on his/her profile. • Do-It-Yourself (DIY) services: Users can choose DIY services, such as help desk/FAQ in addition to submitting an enquiry. • A storage repository: In addition to send to the right user at the right time, all the answers should be stored within a repository for future use and analysis. • Search engine: Allows the visitor to search on keywords to locate quickly specific answers on the web site. • Automatic question routing: A reasoning rule must be set in order to allow the system to route the enquiries to the right department and service personnel. • Mailing list: To receive more information, the visitor can add his/her e-mail address to a list to receive automated e-mails. • Site tour: The visitor can follow a tour through the web site. • Site map: The system is presented by web pages, so a hierarchical diagram of the 22 side overview and index should be offered. Page
Customer Relationship Management in Services Focus: Educational Institutions • Introduction for first-time users: Visitors, who enter the site for the first time, should time users e be able to surf to an introduction page, and this requires contains information about how to use the site most efficiently. efficiently • Chat: The chat feature allows a visitor to enter a real-time conferencing with other real time users on the web site for quick information sharing. • Electronic bulletin board Script-driven forums allow visitors to share in board: driven information with others and can help shape a web site to better serve users needs. Through an electronic bulletin board, a visitor can post a message or can respond to a posted message on a special web page. • Alternative channels: Just like it is not uncommon to find users complaining about e e- mail that is never answered and FAQs that raise more questions, this system is not cure-all, and may result into disappointment. As one of the main points of CRM all, disappointment. systems is to communicate effectively and efficiently, different ways to contact the library should be offered, for instance, e-mail, fax, toll-free numbers, postal address, e free call back button and voice over IP, bulletin board. bulAfter the specifications are set out the next step is to see to it that the proper vendors areselected. 23 Page
Customer Relationship Management in Services Focus: Educational InstitutionsSome ExamplesThe North Carolina Community College SystemThe North Carolina Community College System (NCCCS) is the 3rd largest in the USA, servingmore than 7, 50, 000 students each year at the state’s 59 institutions. NCCCS is the state’sprimary provider of job training, literacy and adult education. NCCCS provides high-quality,accessible educational opportunities that improve the lives and well-being of individuals byproviding support for economic development through services to business and industry; andservices to communities and individuals to improve the quality of life.The CRM Project at North Carolina CollegeBy 1997, the computing system used by NCCCS, never able to adequately support the largercommunity colleges, was unable to meet the state reporting requirements.Designed to support only the administrative functions of the colleges, colleges were using itas a management information system to support decision making. At each college, separatedatabases stored employee and curriculum information. Student data was split in twodatabases – one for traditional students and the other for continuing education students.This disparate data resulted in inaccurate and redundant data and frustrated students.Continuing education students, for example, were not recognized as students in the college-they weren’t in the “college student” database! In 1997, a survey of college businessmanagers in the state showed that nearly 80 percent of those responding supportedinvestigating other options for administrative computing systems.The college went through a series of activities which finally culminated in installation of aCRM solution. The activities stated as early as 1997 and the things went on smoothly till2003 when a disparity was marked in the system of accounting.A major disparity was discovered between the accrual-based accounting system of theDatatel Colleague software and the cash-based system required by the State of NorthCarolina (Olson, 2003). This disparity delayed implementation of the systems in which theAR/CR issue caused problems. The implementation schedule for Phase II was revised fromtwo to three college groupings of 14 (2A), 18 (2B) and 18 (2C) colleges, with the planned enddate extended to June 30, 2007 (State of NC Information Technology Services, 2004). 24The Phase I colleges completed the Pilot test of the AR/CR System in October 2004 and thesystem and documentation were approved six months later. The Phase 2A Student System Page
Customer Relationship Management in Services Focus: Educational Institutions“Go-Live” was scheduled for completion in July 2005 for all implementation activities. ThePhase 2B colleges began their initial Student System activities in March 2005, with a planned“Go Live” scheduled for student registration in July 2006 for the fall, 2006 semester. ThePhase 2C colleges began implementing the Student System in March 2006 with a planned“Go Live” scheduled for June 2007 (State of NC Information Technology Services, 2004).As of now the status report shows a compliance of all the timelines for the colleges.The Student System as a CRM SystemTo support the goal of student-centered learning, the student information system features astreamlined application process that allows anytime, anywhere registration with a date-driven set-up to support traditional and distributed learning offerings.Student services access is provided, and students can access and update their informationwithout requiring assistance or service from a staff member unless problems arise. Inaddition, comprehensive date tracking maintains all history and status changes with studentrecords available via the web. All transactions are immediately reflected in the database andin related processes (such as a student dropping a course and immediately having financialaid recalculated). Information about students and employees is accessible to all functions(with appropriate security).With the elimination of multiple databases and resulting duplicate records, the student viewis no longer fragmented across the organization. Instead, student data is stored in one placeon a single system. This data integration increases coordination among functional areas andsynchronizes processes, thereby improving customer service. Information about all collegescan be collected and stored centrally in the data warehouse. This central repositoryaccommodates information retrieval and reporting for both analytical purposes such as datamining and for operational tasks such as scheduling and registration. All systems utilizeelectronic forms and workflow instead of paper forms that must be carried or sent betweenoffices. This enhanced efficiency improves speed, customer service and satisfaction (NCCCS,1999).University of Ottawa, Innovation of the Student Information System (ISIS)This university too decided to launch a CRM solution and had floated a RFP for the same. 25 Page
Customer Relationship Management in Services Focus: Educational InstitutionsArizona State UniversityThe university has a Student Information System in place since 1980 and was presumablyserving the purpose well but in 2006 the governing body decided to revamp the system tomeet up the challenges of the present day. It planned to replace the Student InformationSystem (SIS) and HR/Payroll system, at an anticipated five year cost of $23M, licensing thesoftware from the existing ABOR contract for Northern Arizona University (NAU).The university was very meticulous in the planning part and decided to follow a set ofIndustry Best Practices. ASU decided to follow “The Sweet Sixteen” - best practices for theASU ERP Replacement:Best Practice 1 - Executive management endorses and supports the SIS and HR/PayrollReplacement Project by providing adequate funding and prioritization.Best Practice 2 – Executive Management will remain actively involved throughout theimplementation through an executive steering committee (monthly) and through executivebriefings (quarterly).Best Practice 3 – The SIS and HR/Payroll Replacement Project implementationresponsibilities should be shared between the information technology department andfunctional areas where the software is being implemented. This is a University Project.Best Practice 4 – Executive management should be cognizant about ASU’s ability to adaptthe organizational changes that occur when the new software is implemented.Best Practice 5 – A project manager will be assigned full-time to the implementation.Best Practice 6 –The project team composition will represent all functional areas where thesoftware will be implemented.Best Practice 7 – Project team members are full time on the project and normal jobresponsibilities should be reassigned to other employees for the project duration. Backfillbudget will be provided for departments providing staff to the project.Best Practice 8 – Project team members will receive training on how to work as a team on aproject before implementation begins.Best Practice 9 – Support when modules come live will be proactive. Support staff will be onsite with key offices during go-live. The project team will “hold hands” with new SIS usersduring go-live. 26 Page
Customer Relationship Management in Services Focus: Educational InstitutionsBest Practice 10 – A separate dedicated work environment specifically created for theproject team is required. Both functional and technical project staff will be co-located.Best Practice 11 – All employees who will implement and use the new SIS system willreceive thorough training.Best Practice 12 – Executive management should help employees network with peers atother institutions undergoing similar implementation initiatives.Best Practice 13 – It is often necessary for an institution to change its administrativeprocesses to fit the software. ASU will adapt a philosophy of using the software out of thebox or re-engineering a business process before changing the SIS software.Best Practice 14 – Outside consultants will be used to facilitate implementation efforts anddo knowledge transfer. ASU will retain ownership and control of the implementationprocess.Best Practice 15 – Implementation information should be continuously communicated tothe campus community. Multiple communication modalities will be used. Project teammembers will have regular meetings with their functional offices to report back and sharewhat is happening in the project office.Best Practice 16 - Conversion of data from the old software system to the new andidentifying and implementing reporting needs will begin early in the implementationprocess.Implementing the Northern Arizona University (NAU) system with the minimum set ofchanges possible was decided to be the fastest, most cost effective way to acquire a new SISfor ASU.A proper timeline was also defined for the process: 27 Page
Customer Relationship Management in Services Focus: Educational InstitutionsFig. 10: Project Management Timeline for SIS-CRM implementation at ASU. Source: Board of CRMRegents Meeting February 2-3, 2006, Agenda Item 23, Page-07. 3, 2006After much deliberation a cost break-up of the project was also presented which can be break updepicted as follows:Table.2: Cost Structure of the proposed SIS-CRM implementation at ASU. Source: Board of Regents 2: SIS 28Meeting February 2-3, 2006, Agenda Item 23 Page-08. 23, Page
Customer Relationship Management in Services Focus: Educational InstitutionsConclusionsThis work explored customer relationship management in a higher education setting. Thedevelopment and implementation of a CRM project in an US state community college wasexamined as were the benefits realized by implementing CRM. These include a student-centric focus, improved customer data and process management, increased student loyalty,retention and satisfaction with the college’s programs and services.As colleges increasingly embrace distance learning and e-business, CRM will becomestronger and more pervasive. Viewing students as customers provides a competitiveadvantage for higher education and enhances a college’s ability to attract, retain and serveits customers.In the Indian context too almost all colleges today have a website but the full potentials stillremain untapped and the focus remains more using it as marketing tool rather than using itas a comprehensive CRM solution to enhance customer satisfaction. This would not onlyhelp them enhance the satisfaction level of current customers but also aid to generate apositive word-of-mouth and get more prospective entrants.Enhanced CRM programs not only help students but have quantifiable benefits for thecolleges too. In the case of DePaul University, using the CRM framework used by the college,an email campaign was a survey was conducted that identified students who wereexperiencing stress during their first year. Receiving a 50 percent response to the survey,the university was able to use the information to identify students who were consideringtransferring or dropping out of the university. A second email went to programadministrators, complete with the information about the students and their particularstressors. This information enabled the staff to intervene immediately to get students backon track- and resulted in a four percent lift in student retention.Thus if used with prudence and planning a CRM solution can help colleges and universitiesgain significantly on the front of student satisfaction and gain better image which furtheradds to its image and helps it get more enrollments. The favorable Word-of-Mouth has atremendous effect these days especially with the factors of www and communicationintegration. 29 Page
Customer Relationship Management in Services Focus: Educational InstitutionsScope of Further StudyThe present study delved in the area of CRM implementation and tried to bring about aframework for optimum support to service organizations here the focus being towardseducational institutions.A combination of past studies for reference and ongoing work with primary research wasused to decide a proposed framework for CRM implementation in educational institutions.After this study scope still exists in this area to study the impact of CRM strategies to beimplemented in case specific instances.This study can provide a very good platform to any such study that is planned in this sphereof CRM especially in the Educational Sector. ***** 30 Page
Customer Relationship Management in Services Focus: Educational InstitutionsReferences: • http://www.businessballs.com/changemanagement.htm accessed on 10/01/2008. • www.emeraldinsight.com/1065-0741.htm accessed on 31/11/2007. • www.depaul.edu accessed on 09/01/2008. • www.crmguru.com accessed on 09/01/2008. • www.oracle.com accessed on 12/01/2008. • http://www.emeraldinsight.com_Insight_ViewContentServlet_Filename=_published_eme raldfulltextarticle_pdf_1650230103 accessed on 30/11/2007. • American Association of Community Colleges (2003), “Community colleges past to present”, available at: www.aacc.nche.edu/Content/NavigationMenu/AboutCommunityColleges/HistoricalInfor mation/PasttoPresent/Past_to_Present.htm accessed on 01/12/2007. • http://web.ebscohost.com/ehost/pdf?vid=1&hid=101&sid=10898775-fb62-4fe4-9afb- 3152a86b0681%40sessionmgr103 accessed on 01/12/2007. • http://papers.ssrn.com/sol3/papers.cfm?abstract_id=896722#PaperDownload accessed on 30/11/2007. • http://papers.ssrn.com/sol3/papers.cfm?abstract_id=664922#PaperDownload accessed on 30/11/2007. • https://184.108.40.206/cgi-bin/nph-120025.cgi/010110A/http/www.bi- interactive.com/index.aspx?Lang=en&Highlight=&StoryID=162&ReportID=158&MainPage =renderContent#top accessed on 29/11/2007.Bibliography: • “CRM at the Speed of Light” by Paul Greenberg, Tata McGraw Hills Publication, 3rd Ed., 2007. • “Corporate Communications- A 21st Century Primer” By: Fernandez Joseph, Printed by Response Books, 2006. • “Marketing Management” 12th Edition By: Kotler Philip and Keller K L, Printed by Pearson Education Pte. Ltd., 2006. 31 Page