Quality Development of CRM Facilitated Busi- ness Customer Relationship Management (CRM) Customer Relationship

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  • Tuure Vuorinen

    Quality Development of CRM Facilitated Busi-

    ness Processes

    Faculty of Electronics, Communications and Automation

    Master‘s thesis for the degree of Master of Science in Technology

    submitted for inspection, Espoo, 28 April, 2010.

    Supervisor: Timo Korhonen, Dr.Tech.

    Instructor: Panu Laasonen, M.Sc.(Tech.)

  • AALTO-UNIVERSITY ABSTRACT OF THE

    SCHOOL OF SCIENCE AND TECHNOLOGY MASTER’S THESIS

    Author: Tuure Vuorinen

    Subject: Quality Development of CRM Facilitated Business Processes

    Date: 28 April, 2010 Language: English Pages: 9+79

    Faculty of Electronics, Communications and Automation

    Department of Communications and Networking

    Professorship: Networking technology Code: S-38

    Supervisor: Timo Korhonen, Dr.Tech.

    Instructor: Panu Laasonen, M.Sc.(Tech.)

    Keywords: Quality Management, CRM, Customer Relationship Management, Ba-

    lanced Scorecard, BSC, Marketing process

    This study examines the possibility of combining Balanced Scorecard and Customer Rela-

    tionship Management (CRM) system for measuring and developing marketing process per-

    formance and quality. First, a literature review is conducted to establish the model based on

    previous research. Second, an empirical study in a case company is conducted to examine

    the company‘s perspective.

    The data was collected from eight interviews involving top management and specialists

    in the case company and conducting a focus group discussion. Documented processes and

    existing scorecards were also included in the empirical data. The data was categorized to

    discover if the combining of systems could be done in the case company and what are the

    requirements for that implementation.

    The findings of the study are based both on the theoretical literature review and results from

    the empirical research on the case company support combining Balances Scorecard ap-

    proach with CRM system to measure and direct the marketing process to achieve better

    performance and quality.

    The most important requirements for the implementation involve the way of working.

    There has to be a sound process supporting the regular assessment and defining stakehold-

    ers of the Balanced Scorecard. Company has to have well defined processes for customer-

    oriented actions, such as sales process. The CRM system needs to support target setting and

    reporting over time to provide easy access to the customer data and to maintain and help the

    daily work in different units of the organization.

  • AALTO-YLIOPISTON DIPLOMITYÖN

    TEKNILLINEN KORKEAKOULU TIIVISTELMÄ

    Tekijä: Tuure Vuorinen

    Työn nimi: Quality Development of CRM Facilitated Business Processes

    Päivämäärä: 28.4.2010 Kieli: Englanti Sivumäärä: 9+79

    Elektroniikan, tietoliikenteen ja automaation tiedekunta

    Tietoverkkojen laitos

    Professuuri: Tietoverkkotekniikka Koodi: S-38

    Valvoja: Adj. Prof. Timo Korhonen

    Ohjaaja: DI Panu Laasonen

    Avainsanat: Quality Management, CRM, Customer Relationship Management, Ba-

    lanced Scorecard, Tuloskortti, Markkinointi

    Tutkimus tarkastelee tuloskortin (Balanced Scorecard) ja asiakashallintajärjestelmän

    (CRM) yhteensovittamista markkinointiprosessin mittaamiseksi ja laadun parantamiseksi.

    Kirjallisuuskatsauksen perusteella muodostetaan aikaisempaan tutkimukseen tukeutuva

    viitekehys. Tutkimuksen empiirisessä osiossa samaa kehystä tutkitaan kohdeyrityksen

    näkökulmasta.

    Tutkimuksessa käytetty aineisto kerättiin kahdeksasta kohdeyrityksen johdolle ja

    asiantuntijoille suunnatusta haastattelusta ja yhdestä ryhmäkeskustelusta sekä prosesseja ja

    olemassa olevia tuloskortteja kuvaavista dokumenteista. Aineiston ryhmittelyn perusteella

    saatiin esille vaatimukset järjestelmien yhteensovittamiseksi.

    Tutkimuksen tulokset niin kirjallisuuskatsauksen kuin empiirisen osion puolesta tukevat

    Balanced Scorecardin ja CRM järjestelmän yhdistämistä markkinointiprosessin

    mittaamiseksi ja laadun parantamiseksi.

    Tärkeimmät vaatimukset toteuttamiselle liittyvät päivittäiseen työntekoon. Yrityksessä

    täytyy olla hyvin perusteltu tuloskorttia tukeva prosessi, joka määrittää yksiselitteisesti

    aikataulutuksen sekä osallistuvat osapuolet. Lisäksi yrityksessä tulee olla hyvin määritellyt

    asiakkaiden kanssakäymistä ohjaavat prosessit, esimerkiksi myyntiprosessi. CRM

    järjestelmän pitää tukea niin tavoitteiden asettamista kuin historiatietojen raportoimista

    taatakseen helpon pääsyn asiakastietoihin ja helpottamaan päivittäistä työntekoa

    organisaation eri yksiköissä.

  • iv

    Acknowledgements

    This work is dedicated to my family and dear friends for all the support they have given

    me.

    I would like to thank my instructor Panu Laasonen and my supervisor Timo Korho-

    nen for their encouragement during the project. I also wish to thank Jukka Niiranen for

    continuously helping with the challenges.

    The steady support from my family and dear friends made all this possible. More

    than anything else, I want to express my gratitude to my girlfriend Carolina Andersin

    for all the understanding, comments and assistance you have given to me.

    Espoo, April 28 th

    , 2010

    Tuure Vuorinen

  • v

    Table of Contents

    Acknowledgements .......................................................................................................... iv

    Table of Contents .............................................................................................................. v

    Key Concepts .................................................................................................................. vii

    Concept Diagram of the Thesis ....................................................................................... ix

    1. Introduction ................................................................................................................... 1

    1.1. Objectives and background .................................................................................... 1

    1.2. Research Methodology ........................................................................................... 2

    1.3. Structure of the thesis ............................................................................................. 3

    2. Theory ........................................................................................................................... 4

    2.1. Process performance and Quality ........................................................................... 4

    2.1.1. What is quality and its management ................................................................ 4

    2.1.2. Why Quality – Costs of poor process performance and quality ...................... 4

    2.1.3. Past and the future ........................................................................................... 5

    2.1.4. Key concepts – how to develop and measure quality ...................................... 5

    2.1.5. Integration of quality management in the organization ................................... 9

    2.2. Balanced Scorecard .............................................................................................. 10

    2.2.1. Measures That Drive Performance – The Balanced Scorecard ..................... 10

    2.2.2. From performance measures to a strategic management system .................. 12

    2.2.3. Mapping organization‘s objectives with Strategy maps ................................ 13

    2.2.4. Using Balanced Scorecard as a Strategic Management System .................... 20

    2.2.5. Benefits of the Balanced Scorecard ............................................................... 24

    2.2.6. Challenges and critique ................................................................................. 25

    2.2.7. Balanced Scorecard in cooperation with different systems ........................... 26

    2.3. Marketing Performance Measurement ................................................................. 28

    2.3.1. Marketing and its location in the organization .............................................. 28

    2.3.2. Marketing in practice: The Kotlerian view ................................................... 31

    2.3.3. Measuring Marketing Performance ............................................................... 31

    2.3.4. Challenges in measuring performance .......................................................... 36

    2.3.5. Measuring marketing within systems in the organization ............................. 36

    2.4. Customer Relationship Management ................................................................... 37

    2.4.1. CRM is about managing customer relationships profitable .......................... 37

    2.4.2. Strategic Framework and Different Perspectives .......................................... 37

    2.4.3. History and future of the CRM ...................................................................... 41

    2.4.4. What is the CRM for? .......................................................................