mis

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Principal Investigator
Co-Principal Investigator
Paper Coordinator
Content Writer
Prof. S P Bansal
Vice Chancellor
Maharaja Agrasen University, Baddi
Prof YoginderVerma
Pro–Vice Chancellor
Central University of Himachal Pradesh. Kangra. H.P.
Paper 6: Management Information System
Module 30: Customer Relationship Management
Dr. Ashish Saihjpal
Assistant Professor,
University Business School, Panjab University (RC), Ludhiana.
Prof. Manu Sood
Chairman, Department of Computer Science
Himachal Pradesh University, Shimla.

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Items Description of Module
Subject Name Management
Paper Name Management Information System
Module Title Customer Relationship Management
Module Id Module No.-30
Pre-
Requisites
Understanding the need of businesses to be customer focused, outline various customer
touch points.
Objectives Outline the need and importance of CRM in Systems at the enterprise level.
Keywords Customer Retention, Cross Selling Up Selling, Collaborative CRM, Analytical CRM,
Operational CRM
QUADRANT-I
Module-30 Customer Relationship Management
1. Learning Outcome
2. Introduction to Customer Relationship Management
3. Need for Customer Relationship Management Software
4. Types of Customer Relationship Management
5. Implementing a CRM System
6. Successful Deployments of CRM System
7. Business Benefits of CRM System
8. Summary
1. Learning Outcome:
After completing this module the students will be able to:
 Understand the fundamental concept of Customer Relationship Management.
 Understand the need for CRM.
 Understand the types, phases and approaches to Customer Relationship Management.
 List the stages involved in implementing a CRM System.
 List the business benefits of a CRM system.
 Review successful deployments of CRM system and how they have proved beneficial to
organizations.
2. Introduction
Let us begin with the famous quote of Mahatma Gandhi on customer service, "A customer is the
most important visitor on our premises; he is not dependent on us. We are dependent on him. He
is not an interruption in our work. He is the purpose of it. He is not an outsider in our business.
He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us
an opportunity to do so."
Exhibit1: What a Customer Means
Image Source:
http://www.predictablesuccess.com.au/images/content-
pages/Customer-Service-and-Customer-Relationship-
Building.jpg

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Yet another quote that highlights the importance of customer to a business is “Businesses don’t buy from
businesses, its people who buy from businesses. Only those companies that understand this concept will
mature into successful customer-focused ones.”
Exhibit 2: Customer Retention
Image Source: http://www.esellernews.com/wp-content/uploads/2014/03/eretain-customers.png
The above lines undoubtedly lay emphasis on the importance of the customer to any business.
Considering the complete business cycle right from establishing a business to taking a product to the
market, acquiring a customer and building a potential relationship with the customer remains an activity
of paramount importance in today’s competitive landscape. A happy customer not only gives opportunity
to an enterprise to serve him in the near future but also creates a positive word of mouth for the business
in the market. This encourages the enterprise to derive inputs for customizing and developing new
products as per the customer needs and support the claim that “The customer is the king”. It is possible
for managers to know customers on a personal face to face basis in small businesses that are operating in
a neighborhood and catering to the local needs of the customer. But in large businesses, operating over a
larger region, at the national or at global level, it becomes a challenge for the organization to get
acquainted with the customer in such an intimate way.
Exhibit 3 elaborates the Customer Management Lifecycle that describes the progressive steps undertaken
by an enterprise to convert a prospective customer to a loyal customer. The first stage involves
considering the customers who may have interest in the products and services being offered by the
enterprise. This is done through bulk mail campaigns, broadcast of text or multi-media messages and use
of social media to target the potential customers. The next step is to establish communication with the
prospective customers who have shown interest. Eventually, these customers are communicated with the
product details on the offering as per their needs. These customer leads are further nurtured by the front-
end sales personnel and the status of the same is updated at the back-end department for enhanced
customer service. Once the prospective customer is turned into a paying customer, the final step involves
building a loyal customer whose satisfactory feedback about the company, products and services urges
other customer to join the cycle. In this cycle customer retention remains the main aim while adding more
and more customers to the cycle (Exhibit 2).

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Exhibit 3: The Customer Management Lifecycle
Image Source: http://awigia.com/awigia/wp-content/uploads/2010/06/crm-benefits-around-the-life-cycle.png
In the age of the internet, as companies span their businesses globally and have a larger customer base by
way of multiple interactions with them. However, it is a difficult task to integrate and accumulate all
information about the customers and make it available for business use.
This problem is solved by integrating the Management Information System (MIS) and the Customer
Relationship Management (CRM) solution. Fundamentally, A CRM initiative helps an organization to
know about customers –
- Who they are?
- What they buy?
- Why they buy it?
A CRM system compiles and consolidates the customers’ information into databases and further analysis
and distributes results to various systems across the enterprise (Exhibit 4).
Exhibit 4: Elements of CRM
Image Source: https://media.licdn.com

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The CRM package under its umbrella can support customer databases, monitor payments, after sales
services and provide technical support (Exhibit 5). It also helps maintain key performance indicators and
monitors progress of customer related activities.
Exhibit 5: What CRM Does?
Image Source: https://edgehousemedia.com/wp-content/uploads/2017/02/CRM-icon.png
The mitigation of customer relationship management with Information Technology infrastructure has
given a number of competent CRM softwares that organizations use today. Some of these are exclusive
packages that need CRM experts to establish and use them while some are available as open source and
can be used in medium to small scale organizations. Exhibit 6 shows popular CRM solutions that are in
use industry wide. Most commonly used are from SAP, Microsoft Dynamics, SugarCRM and the
packages from Oracle.
Exhibit 6: Industry wide CRM Packages
Image Source:, http://www.stratmax.net/SiteAssets/crm-implementation/CRM%20logos.jpg

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3. Need for Customer Relationship Management
According to Forbes, “it is six to seven times more expensive to acquire a new customer than to keep an
existing one” (Exhibit 7). Retaining an existing customer in the long run should be a company’s primary
objective as with satisfied and happy patrons, come recommendations, free word of mouth marketing, and
increased business.
Exhibit 7: Retaining Old Customers
Image Source: https://receiptful-blog-staging.s3.amazonaws.com/2015/Apr/Shipping_Costs-1429316437613.png
Therefore, it is important for a business to retain and nurture customers as this will help them in reducing
the marketing spend to acquire new ones and ultimately leading to more profits for the company. Hence, a
CRM solution can help an organization to increase profitability by building strong relationships (Exhibit
8) with their customers and prospects.
Exhibit 8: Building Customer Relationships
Image Source: http://feed140.com/wp-content/uploads/2014/09/It-is-all-about-relationship.png

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The following areas are addressed by integrating a CRM system in an organization and is graphical
represented through Exhibit 9:
 Communication Link – Modern day business relies essentially on effective communication
between basic departments like sales, marketing, production, accounts, logistics and other
departments such as procurement, warehousing, distribution and training. A CRM system ensures
all departments have latest information regarding customer accounts and it is readily available
and updated in real time.
 Seamless flow of information - A CRM system is so designed so as to capture the queries of the
customer, their orders and their contact information. This information is shared with internal
departments for timely action.
 Tracking Customer Interaction – A CRM module has a real time tracker that gathers complete
information regarding the various interfaces of the consumers with the company’s personnel then
it provides a status update of the same which not only keeps the various teams in the organization
informed about the deadlines of the project but also satisfies the client that his then requirements
are looked into timely.
 Cost of Sales and Marketing Activities – In the age of digital advertising and marketing,
companies have the objective of budget optimization for marketing activities. A CRM system
helps in attaining this objective by managing budgets for sales and marketing. It helps to analyze
the response of e-mails, direct mails and broadcasted messages. CRM also helps in monitoring
presence at trade shows and online forums.
Exhibit 9: An integrated CRM system
Image Source: https://s3-eu-west-1.amazonaws.com/infogram-particles-700/empoli_1390920645.jpg

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 Integration with MIS – The integration of the CRM with the databases of the organization and the
MIS provides a two-way communication in real time.
 Synchronization with Outlook - For a successful business organization, it is essential that its
executives have a “To Do” list and a business directory which is well updated with business
meetings and appointments. The CRM can be system integrated with Outlook on the mobile
phone to send automatic confirmation emails and text messages and thus, keep the executives
updated in real time.
 Securing Business Critical Information – These days, the complete information of the companies
are available on the digitized systems therefore, the security and backup of the same is of high
priority for companies. This concern can be addressed by the robust databases and CRM systems.
 Customer Profiling – Different customers have their different requirements and priorities. A
product can be beneficial for one customer and may be irrelevant to the other. Hence, it is critical
to differentiate between a high value customer and his buying behavior from a low value
customer. A CRM module enables the company to maintain a complete profile of the customer.
 Reports and Analysis for Business Review – Every business review meeting requires MIS reports
and status updates on activities and progress of each account. The CRM features enable report
generation and diagrammatic interpretation which makes the analysis easy to comprehend.
4. Types of Customer Relationship Management
4.1 A CRM system is configured around the following three areas (Exhibit 10):
 Front Office Operations – Front office operation includes handling of queries, requests and
problems raised by the customers. It also forwards them to the back office operations. These have
direct interactions with customers, face to face meetings, and telephonic conversations with the
customers.
 Back Office Operations – Back office operation imply functions such as processing of bills,
settlements, clearances, record maintenance and compliance, marketing, planning, manufacturing,
advertising etc.
 Business Relationships – Business relationships refer to the interactions of the company with
suppliers, vendors, distributors, retail outlets etc. This provides information regarding customer
issues, problems and queries on which the company can take corrective action.

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Exhibit 10: CRM Functions
Image Source: http://squirrelcrmhub.com.au/wp-content/uploads/2014/12/graph-crm.jpg
4.2 Approaches to CRM
Exhibit 11: Types of CRM
Image Source: https://media.licdn.com
Exhibit 11 showcases the different approaches to CRM, which are explained as below:
 Analytical CRM – Analytical CRM is more strategic. It deals with the detailed analysis of
customer value management, revenue as per by customer segmentation, classification of the
customers by different profiles, the buying behavior of the customer, response capturing to
marketing campaigns. Analysis in Analytical CRM is carried with help of IT Tools such as
Online Analytical Processing (OLAP) and Data Mining tool. These help to analyze data for
business decision making.
 Operational CRM – It refers to front-office systems where the customers have an interface with
actual users of the system. This CRM is largely customer centric. It manages customer data
records to lead generation and further follow-ups. It has three components which can be
explained as:

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- Sales Force Automation: It helps manage the complete cycle of sales starting from mapping
the customer information to after sales services and support to the customers.
- Marketing Automation: This feature helps to organize the customers into segments and
target marketing campaigns best suited to them. E-mail brochures, product catalogues,
promotional offers can be sent to target audience using this technique. It also helps to design
marketing collateral that is interactive in nature and seeks reader’s response.
- Service Automation: An efficient service and customer support system is as important as
making the sale. A satisfied customer has increased chances of being loyal and makes cross
purchases. Service automation helps in raising a ticket against a customer query and ensures
to resolve the matter in the shortest possible time.
 Collaborative CRM – Collaborative CRM implies identifying interdependent activities, forming
teams to handle major issues of the customers and support collaboration effort through the
exchange of information.
4.3 Phases of CRM
The three phases of the relationship between a business and its customers are summarized below.
Figure 1 depicts the relationship the CRM establishes between the customers and business.
Customer Life Cycle
CRM Functional
Solutions
CRM Integrated Solution
Figure 1: How CRM supports three phases of relationship between business and customer
1. Acquire – CRM tools help acquire customer responses and feedback on mailers and
campaigns. This is possible by contact management. Sales prospects can be identified and
relevant customer details can be data based.
Acquire Enhance Retain
Direct Marketing
Sales Force Automation Customer Support
Proactive Service
Cross sell & Up Sell
Shared Customer Data,
Collaborative Service
Partner Customer
Company

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2. Enhance – Account Management and Customer Support Services are designed to resolve
customers’ issues with the help from a dedicated team of customer support specialists. CRM’s
Sales Force Automation and Direct marketing and fulfillment tools help in cross selling to
existing customer base.
3. Retain – The CRM packages can compile customer responses and identify profitable and loyal
customers. The integrated databases can retain these details for future marketing programs. This
saves the effort and time in mass marketing and helps to focus marketing efforts to an interested
audience.
5. Implementing a CRM System
The implementation of a CRM solution is a six-stage process. From capturing information to organizing
marketing campaign and selling to leads generated, CRM can support the complete order processing
lifecycle. The different stages are:
 Information capture - The central idea is to capture information that is unique to a customer and
maintain his profile in the database. This can be collected from customer login details, points of
sale (POS), transaction data. Information can also be entered as per customer interest and how
much they wish to share.
 Information storage - A relational database stores and manages information. It serves as a central
repository that holds customer details and is integrated to various systems to ensure all users have
access to the same information.
 Information access – It refers to the ease of availability of information which is updated and can
be accessed easily by the executive for business purposes.
 Consumer Behavior - Data analytics help study behavior patterns, relationships and support
decision making for sales and marketing strategy.
 Efficient Marketing – Better understanding of customer preferences help design marketing
campaigns more suited to consumer purchase patterns.
 Customer experience – When customers get services customized to their interest and products
made as per their needs, their association with a brand is likely to continue.
6. Successful Deployments of CRM Solutions
6.1 Business Case: IndusInd Bank and Talisma Win Best CRM Implementation Project
Exhibit 12: IndusInd Bank
Image Source: https://www.indusind.com/

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Talisma Corporation, the technology partner for IndusInd Bank together bagged the award for the Best
CRM Implementation Project, 2015 during the Asian Banker Technology Implementation Awards
Program at the Hong Kong, on April 15th
2015.
With the deployment of Talisma’s Customer Experience Management (CEM) at the bank it empowered
the sales and service teams to automate processes, manage activities and enhance relationship with
customers through better customer experience.
The solution was built over the core banking systems and delivered several benefits such as response
given to every communication from the customer, making customer service process agent-independent,
with enhanced customer experience and the ability to provide the right information to the desired target
segment.
The new system provided an integrated platform that gave single window solution for multiple customer
relationship initiatives of the bank. Data from different sources is fed into the centralized database
designed to maintain unique customer profiles. The project has come a long way in improving operational
efficiency and customer experience.
The system achieved several milestones by improving back office efficiency by 30%, customer retention
and marketing capability with 50% and being first time right by another 70%.
The accolades are well recognized by many forums and referred by global banking experts, IT consultants
and academicians which is the most prestigious of its kind. A stringent evaluation process was involved
that lasted 3 months and determined the winners from across Asia Pacific, Middle East and Africa.
Source: http://www.hindujagroup.com/newsletter/april15/ib-best-project.html.
6.2 When Harley rode the CRM Experience
Exhibit 13: Customer Engagement at Harley Davidson
Image Source: http://www.itbusiness.ca/news/harley-davidson-rides-crm-to-earn-customer-trust/4279
As proud owners say, when you step out to buy a Harley Davidson, you don’t just buy a motorcycle but
you are off to buy an experience, which goes into making of a legend. Harley Davidson is a brand that
brings a beauty to life; the world’s finest motorcycles. With every purchase, a customer joins the Harley
Owners Group or “H.O.G” and that’s how the company ensures to know its customer better. The
membership is not limited to benefits, or events, but it is a start to a journey, that may end no sooner than
few decades.

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From reunions to biking camps, riders tread highways keeping abreast with the patron Harley Owners
Group. They stay updated on all latest events, merchandize and accessories to be rolled out.
The financial sub unit, the Harley Davidson Financial Service group assists them in financing options
while making a purchase. Customer data at various touch points is captured as part of their CRM strategy.
This data is utilized for marketing campaigns, sponsored events, cross selling and gaining customer
feedback.
Pivotal Corporation, based out of Vancouver, Canada is the CRM service provider to Harley Davidson.
The deployment enables to track company performance against key performance indicators. They ensure
improved service levels. The turnaround time for query resolution is monitored along with customer
support services. The reporting engine integrated with the CRM package is provided by SAP Business
Objects. It helps to generate reports as per business needs. Dealers worldwide are connected via CRM to
access business information.
7. Business benefits of CRM System
Exhibit 14: CRM Benefits
Image Source: https://s3.amazonaws.com/Convergeupload/4742559a-b91e-a557-68d2-5304bc8fad70/temp/The-Changed-Role-of-CRM.JPG
The most important benefit is capturing customer information which can be best utilized for the
development of better relations with existing customers. Exhibit 14 summaries the changing role of CRM
in business. CRM majorly leads to:
1. Increased sales – Maintaining a customer profile helps to archive his/her past purchases and
buying behavior. These trends help to understand the customer requirements better, thereby
increasing sales by providing desired items.
2. Improved operations – Availability of items as per customer preferences enhances their buying and
enables logistics and other processes to move in a similar direction. Back office operations are
coordinated towards customer needs which reduce overstocking. It increases operational efficiency of
the firm and reduces cost of sales.

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3. Easy project management – With better understanding of consumer preferences, cross functional
departments focus their initiatives in a coordinated fashion. This helps project managers to manage
the lifecycle better as redundant processes are dropped and duplication of efforts is avoided. Thus,
customers are serviced better and as per the delivery schedules.
4. Quick tactical business decisions- Since, CRM databases get updated in real time they provide
organization’s sales, marketing and customer service department with most relevant details and
information and facilitates strategic and tactical decision making.
5. Social media marketing – Leveraging the power of social media through web pages, communities
and social media forums like Twitter and Face Book keeps a customer informed and connected to the
brand developments. These platforms are more cost effective and require minimal investments.
6. Better internal communication - With extensive information about the buying behavior of the
customer, the product development teams get more specific information on customer’s requirements
from the sales staff. This induces better communication between internal divisions. The organization
then focuses on selling what the customers actually want rather than what the company wants to sell.
7. Better marketing ROI – Understanding what the customer wants and providing them customized
solutions increases customer satisfaction. Marketing initiatives are then aligned to focus on higher
purchases by satisfied customers. Such satisfied customers are then willing to try new products under
the same brand name.
8. Improved forecasting and financial management – With a single view of updated information from
various departments; the projections can be drawn more clearly. It provides a better view of the sales
funnel and forecasts by products, sales personnel, regions etc.
8. Summary
A comprehensive CRM solution can automate every aspect of a company’s association and relationship
with the customer. It spans from activities needed in acquiring customers to product development, sales,
profiling, after sales support and retention. The ultimate aim for any CRM initiative is profit
maximization. A CRM system identifies a potential customer and endures to gives best of services by
analyzing his buying behavior; this is achieved by providing better service to customers than competitors.
A good CRM capability will minimize rework, coordinate efforts and yield results. It aims at customer
retention and satisfaction at every level of customer engagement. The ideal CRM system integrates with
the existing corporate information system infrastructure. The easy to understand user interface can be
customized and the inbuilt functionality can help analyze information using pictorial graphs and charts.