Customer relationship management (CRM) is a concept for increasing companies’ profitability by enabling them to identify and concentrate on their profitable customers. The term “electronic commerce customer relationship management” (ECCRM) refers to the application of CRM in electronic commerce, i.e., when business relationships are maintained via the Internet or World Wide Web. Previous studies on the effectiveness of ECCRM have often focused on the process level, technical aspects, or on marketing issues. Yet only little evidence has been reported for the impact of ECCRM on the company level. In this chapter we present the results from a large-scale empirical study investigating the impact of ECCRM on corporate success in electronic commerce. The study comprises 469 cases of general companies in the German-speaking market. We find that ECCRM is a critical success factor in electronic commerce, independent of companies’ time on the Web. It is especially critical for B2C and small companies.

Customer relationship management (CRM) is a strategic concept enabling companies to systematically build up and extend the knowledge of their customers, thus empowering companies to actively conduct, ie, manage, the business relationships with their customers. CRM can be understood as a revolving process during which companies interact with their customers, thereby generating, aggregating, and analyzing customer data obtained from all channels, and employing the results for service and marketing activities.

Companies may pursue several goals when employing CRM to manage their customer relationships. An economic goal which companies seek to achieve by the use of CRM is to increase profitability by concentrating on the economically valuable customers, thus increasing revenue (“share of wallet”) from them, while possibly “de-marketing” and discontinuing the business relationship with non-profitable customers. Strategic considerations represent another motivation for companies to employ CRM: By providing customized products and services to them, companies can increase their customer satisfaction, which is likely to lead to higher customer loyalty and longer customer retention. This, in turn, makes it less probable that their customers will defect to other companies (i.e., it lowers the churn rate).
Electronic commerce customer relationship management or ECCRM strongly relies on Internet or Web-based interaction of companies with their customers, yet also includes customer data obtained through the other channels. As the term suggests, ECCRM is a key element of CRM by specifically aiming at supporting electronic commerce, which we understand as the activities related to initiating, negotiating, and executing business transactions online. Since the beginning of the commercial use of the Web, ECCRM has received increasing attention from both practitioners and researchers.

In order to enable the revolving (EC)CRM process, a number of instruments must be implemented. They comprise a technical infrastructure as a base, as well as a number of business processes conducted on top. The instruments can be grouped into the following categories, each representing a step in the revolving process:

1. Data Collection. To generate customer information, customer data should first be collected across all available channels. In electronic commerce, these are typically a company’s website, but also email, interaction with the (Web) call center, and the offline channels. Customer data can be collected either actively, i.e., with the knowledge of the customers, e.g., through interactive questionnaires on the Web, or passively, i.e., without the knowledge of the customers, e.g., through clickstream analyses or by otherwise logging customers’ surfing behavior while on the company’s website. Correspondingly, the type of the data collected may range from personal information, preferences, or purchase histories, to rather intimate behavioral data which the customers themselves might even be unconscious of.
2. Data Aggregation. In this step, customer data is first pooled from all sources (channels) and then “distilled” (i.e., concentrated) to customer information. Depending on the industry and customer type, a considerable amount of business intelligence is necessary in order to recognize certain patterns within the customer information, i.e., typical profiles. While collecting all kinds of customer data may be relatively simple, condensing it and making proper sense of it, i.e., as the final consequence, drawing the right conclusion with respect to the profitability of a customer, is a lot more difficult. Over the Internet and World Wide Web, most competitors in a market (segment) may have access to the same customer base, especially as search and switching costs tend to be very low. Therefore it is the quality of customer information and its evaluation with which companies can secure their competitive advantage.
3. Customer Interaction. With this step, one cycle of the revolving ECCRM process is closed. Companies can react to their customers based on the customer information they have. They can provide positive feedback to, i.e., actively market to their customers, thus intensifying the revolving ECCRM process, or they can provide negative feedback to their customers, i.e., de-market and terminate the business relationship with them.

The central message is that a skill set based on accumulating and exploiting customer knowledge, which we term companies’ ECCRM-capability, is a key success factor in electronic commerce. Yet for the time being, it must be left up to every company to decide how they can attain a sufficient level of ECCRM-capability. While some companies may have already built up their ECCRM-capability through their regular business processes, others might require the implementation of an ECCRM system. Original Article Source

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When should you leverage the relationship?

Leveraging sometimes brings a negative connotation to the mix. It does not have to be that way. Leveraging with alliances can work into a win-win situation were both parties become more profitable and they form more solid business relationships. Leveraging should be taken seriously and not as a way to step on another business to make your own headway. If you work with the alliance partner, you will both be able to leverage the relationship for mutual benefit.

For example, a store I was working with in the past had several channel partners that they wanted to leverage. A meeting was setup to discuss how the relationship could be expanded so that it benefited both parties. It was discovered that the partner wanted to learn more about the products the company was selling and get more into the training aspect for its customer base. The parent company on the other hand wanted to find ways to support the customers of the partner in order for the partner to gain more sales.

In this case, both parties were able to leverage the others’ contacts and offer better customer service. The channel partners also were able to find additional customers because they had more of an inside track on the products being offered. They were able to train new customers and give a new dimension to their offerings. The parent company profited from the additional sales.

Through leveraging the current customer base and the product lines, both companies could offer better customer service. As a result of this success, the parent company offered the same alternatives to other channel partners and found that most of them welcomed the additional opportunity. The opportunity, in order to be successful, has to be presented to the right level of decision makers.

Who You Need (to Form a Relationship With)

At what level should the relationship be established?

A question that is often asked is “How do you get to the right person in an organization for making the decision?” The answer is not an easy one as some organizations have decision making at various levels, and of course it depends on the size of the organization. If you are dealing with 10 or fewer employees, you are likely to need to work with the owner or CEO of the organization. It is imperative that you do not deal with those that cannot make the appropriate decision. You may find that you are dealing with influencers, but in the long run they cannot make the decision to go or not to go with the alliance.

So how do you get to the right person? There are many answers to this question, but the simplest answer is to start at the top. I know that many CEOs do not want to deal with sales people and certainly not with a lot of the everyday information that comes their way. So getting to them may be a bit difficult. The best way to form a relationship is to appeal to their business pain (that which concerns them the most) and offer a solution to that pain. For example, a company I worked with wanted to setup a channel or partner network to sell their products, since they only had a couple of dealers at the time but needed to move to the next level. They had to deal directly with the owners of the companies and offer them a profit, as the proverbial carrot, to entice them.

Profit is not the only way to get to the CEO, you also need to understand their business goals and see how you can fit into the formula before making the approach. The key here is to show that you have something to offer that is of value to them.

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CRM is a comprehensive business and marketing strategy that integrates technology, process, and all business activities around the customer. It is mostly defined in terms of the acquisition and retention of customers, and the resulting profitability. Effective CRM is assumed to lead to bottom-line benefits for the organization. Profits increase by 25-80% when customer retention rates increase by five points. The Internet has provided a platform to deliver CRM functions on the Web (eCRM), thus as business moves to the Web, eCRM will move to center stage.
The Internet represents a new media, with specific characteristics. The Internet is characterized by:

1 quick access and transfer of information;
2. lack of space and time barriers;
3. ease of comparison between various objects, events, or organizations;
4. interactivity and flexibility.

Also, it has to be taken into consideration that in most cases, the e-service represents a one-to-one experience (company-customer).

In this specific environment, the customer will therefore be able to access the company’s website from any place in the world (as long as it has a working Internet connection), to compare the company’s offer and to interact with the organization on a one-to-one basis. On the other hand, the company is capable of attracting and developing relationships with customers located anywhere in the world, to make an ongoing competitors’ analysis, and to personalize its interaction with the customer.
Balancing the two sides of the experience (company/customer), an online service provider will have to define and select its target customers (focus) to analyze the specific competition for that particular market segment (competitive analysis), and to design its long-term interaction with the customer in order to achieve sustained customer satisfaction (strategic planning and implementation).
eCRM can be therefore defined as an interactive, content-centered, and Internet-based customer process, driven by the customer and integrated with related organizational customer support processes and technologies, with the goal of strengthening the customer-service provider relationship.
The Internet empowers the customer. The Internet user has the opportunity to switch the suppliers with several mouse clicks, to compare price and products on a worldwide basis, and to select without external pressure the best available offer. The winning combination of low-price/high-quality product does not work properly on the Internet because the same offer may be available to hundreds of other online retailers. The only possibility to increase the competitive advantage of online retailing is to create not only product-related satisfaction, but also customer-firm relationship satisfaction.
The implementation of customer relationship management (CRM) represents the key to increasing customer loyalty in the digital environment.
Besides the necessity of CRM systems in online businesses, the Internet also offers the possibility of implementing effective customer management operations through the use of complex IT applications (e.g., database software, customer management applications).

Consequently, the selection of CRM applications needs to be strategic and based on relevant criteria for implementation to stand a chance of success. These criteria will include functionality, company strategy, legacy back office systems, and application architecture. Current classification of CRM applications identifies three groupings:

1. Operational CRM products - for improving customer service, online marketing, automating sales force, etc.
2. Analytical CRM products - for building data warehouses, improving relationships, analyzing data, etc.
3. Collaborative CRM products - for building online communities, developing business-to-business customer exchanges, personalizing services, etc.

The implementation of an efficient CRM strategy requires the introduction of a customer-focused organizational culture Customer-centric organizations are defined as being very committed to raising customer satisfaction levels, using customer data to increase sales, improving customer data quality, gaining a deeper knowledge of customers, and implementing customer-management systems The key operations for building an effective CRM strategy include:

• identifying unique characteristics of each customer within the targeted customer segments
• modeling the current and the potential value of each customer
• creating proactive strategies and operational plans, or business rules that will support the desired experience for the customer, starting with the highest value customers
• redesigning the organization, processes, technology
• reward system to implement the relationship strategies.

DJ note: Article Source

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Companies that survived the dot-com bubble were those that provided value-added services to end-users by providing a unique experience or additional value that was either not possible through an offline mechanism or that made a particular job comparatively easier, when made available online.
One such category of companies was dot-coms that offered Software as a Service (SaaS).

What is SaaS and on-demand software?
Software as a Service (SaaS) is a model of software delivery where a software company provides maintenance, daily technical operations, and support for the software provided to their clients. SaaS is a software delivery model and not a market segment.
The key characteristics of SaaS include:
* Network-based access to, and management of, commercially available software.
* Activities that are managed from central locations rather than at each customer’s site, enabling customers to access applications remotely via the Web.
* Application delivery is closer to a one-to-many model to comprise of architecture, pricing, technical support and partnership.

There are two types of SaaS providers. The first has often been referred to as an Application Service Provider (ASP) wherein a customer, primarily a software company, purchases and brings to a hosting company, a copy of software.

The second type of SaaS provider offers what is often called Software On-Demand. This is where a company develops and hosts a suite of software applications to be used by multiple end-users or clients.
One of the biggest success stories of SaaS and particularly on-demand software provider is salesforce.com, a provider of CRM solutions on the web, founded by Marc Benioff, a champion of SaaS delivery model. Today, SaaS is emerging as a preferred option for most software companies due to the inherent benefits that the model provides. Oracle, SAP, Microsoft and many others have been aligning a considerable portion of their business to leverage the benefits. iEmployee, an On-Demand HRMS (Human Resource Management Systems) software provider in the US of A started with a strong service delivery vision to corporate customers and is today amongst the top 10 HRMS provider in the US of A.

The focus in SaaS is more on what the customer wants rather than what the vendor could give, as was the case in an ASP.
ASP applications were hosted by third-parties that basically did not have application expertise, but were only managing servers. Owing to the fact that applications were not written as native internet applications, performance was poor and application updates were no better, either. By comparison, current native internet SaaS applications are updated at much regular intervals than traditional delivery methods. For that matter, updates are done even monthly or daily.

Rather than buying and installing software in-house, companies access the application online. On-demand software allows a business to capitalize on its existing technology investment by outsourcing its other software needs.
An on-demand software company hosts the software and all related data on its servers in a centralized location. Clients pay a monthly or annual fee to access the software, hardware, data storage and even technical support.
In fact, on-demand software providers such as iEmployee may provide several product modules through a single application and authentication system for a complete integrated solution within a domain.

Cheers
Paul
Resource:
Article by Akash Dave (iemployee.com)
Workforce Management Software

Quite a few of these dot-coms were highly successful but most that went bust, ran out of capital and were acquired or liquidated. It looked like all such companies focused to increase their valuation to consequently being funded by Venture Capitalists or being bought over. One primary reason for such companies to fail was that, most such start-ups did not focus on the end-users.

The “dot-com bubble” spanning a period roughly between the late 1990s and the beginning of the century saw numerous upsets and stock market collapses. Companies in the new Internet sector and related fields noticed their value increase rapidly in a short span of time. The period was marked by the founding of numerous new Internet based companies commonly referred to as dot-coms.

About the Author

Exploring Internet & Learning

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Sarbanes Oxley act had been levied for tighter controls and stricter regulations for company’s internal controls. According to the Sarbanes Oxley compliance companies with market capitalization of more than $75 million need to file their financial reports by the June 15th. This date was alter amended up to 15th November. All other companies need to files their financial return for any fiscal year by 15th July.Sarbanes Oxley compliance with section 302 requires any CEO or CFO to certify the accuracy of annual or quarterly financial reports for the company. Any inaccurate or falsified facts are subject to penalty under law. This section also makes a CEO or CFO to establish and maintain internal controls. It also makes them eligible to evaluate these controls and measure their effectiveness. As per Sarbanes Oxley compliance, a CEO or a CFO is eligible to report any deficiency in the design and operations of internal controls. They can report any fraud and rectify any errors in the system of internal controls.

Sarbanes Oxley compliance with section 404 requires the company’s annual report to carry a report on internal controls of the company. This report on internal controls as per the Sarbanes Oxley compliance should state the role of management in maintaining and establishing total internal controls in the financial system of the company.

In case of IT companies, they are also required to be in Sarbanes Oxley compliance while filing their financial reports for any fiscal year. An IT person with business perspective can spearhead the compliance effort of any IT project. IN case of IT companies the internal controls need to be broken up in to two categories of general controls and applications controls. As per the Sarbanes Oxley compliance for an IT company it is required to evaluate the systems processes that end up effecting key controls over financial reporting.

A good idea to implement Sarbanes Oxley compliance is to begin with simple and normal Sarbanes Oxley compliance controls. Then one should work backwards to determine the systems and processes that need to be documented in the financial report.

In case of companies where the work is outsourced the Sarbanes Oxley compliance needs to be documented in differently. This is because the total work is done by an external agency. This is also especially important because any external agency would never give any document or certificate like SAS70 Type II or similar report. In such a case the company is required to document the whole process that has been outsourced as if the whole process has been done internally and state all the internal controls and regulation applied on that process which has been outsourced.

Editor’s Note: ServiceCycle is researching a SAS70 Type II certificate for project management hosting.

In some cases it is suggested that as per Sarbanes Oxley compliance that the IT department is required to hold the keys to maintaining logs, usernames and passwords for the financial controls. This is not mandatory for all companies. Usually an IT department is required to create the roles and finance department directs as to who would hold the keys to those roles specified. But some times it is risky to implement such a practice. This is because if the IT department reviews the logs and holds the key to manage them it might be possible that some important records would be deleted. Thus in such a case the Sarbanes Oxley compliance states that the usernames and passwords etc should be with the IT department and finance department should have the last word on the same.

About the Author

Earl Powers, US Lawyer and Sarbannes expert - focusing on SOA and Sarbanes Oxley Software

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