Organisational factors: CRM software solutions for business

Organisational factors CRM software solutions for business

CRM software solutions for business

In the past, the prevailing wisdom was that business success simply meant gaining and keeping customers. But the world has changed, with structural innovations, increasingly demanding and differentiated consumers and previously unforeseen competition creating a new paradigm of long-term relationship retention.

Businesses are looking to CRM software solutions to cope with these changes. The importance of customer relationship management (CRM) solutions has increased thanks to advances in cloud technology, reduced customer loyalty and increased competition, and the need to retain knowledge about consumers.

New cloud solutions allow organisations to offer more customised products and services to these customers. But other factors are also at play that leads to a reliance on IT, including:

• globalisation
• deregulation
• the development of information technology
• short product life cycles
• an awareness of the connection between customer retention and profitability.

Cloud based CRM solutions have many advantages for organisations. Cloud-based CRM solutions help:

• increase sales
• gain a greater competitive advantage
• increase customer loyalty and satisfaction
• generate new knowledge about customers
• improve customer relationships
• help with the acquisition of new customers
• encourage existing customers to purchase
• maintain good relations with and increase value for customers
• improve the organisation’s image.

But there can be downsides. CRM software solutions for business can have negative effects on the operations of organisation. The most common causes are due to:

• inadequate measurement systems
• low support from the organisation’s management
• lack of understanding of the CRM solutions’ benefits
• low quality and range of data
• exceeding the planned cost
• lack of skills in setting up and using CRM solutions
• lack of understanding of CRM solutions.|

However, many of the issues with CRM solutions are organisational rather than technical in nature. For example, changes in the organisation can affect the usefulness of CRM tools.

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Why businesses use CRM solutions

An effective CRM solution helps a business capture, analyse and share knowledge about and with customers with the aim of improving customer service. Software applications capture a business’s interactions with the customer and this data is analysed. This data helps improve customer relations.

But for the CRM to be effective there are a few important factors inside and outside the organisation that must be taken into account.

Research shows that the organisational factors of a business (which includes its management, structures and employees) have a huge effect on the performance of any CRM solutions the organisation implements. There are many factors that can affect how a CRM solution will work within an organisation, including an organisation’s orientation in the following areas:

Let’s take a look at the critical factors of an organisation and the use of business CRM solutions.

Process orientation and the use of business CRM solutions

An organisation that takes a process-oriented approach gives priority to processes rather than to hierarchy. Businesses that are structured with a clear hierarchy are known as vertically oriented. The effectiveness of a business CRM solution depends on how the CRM is integrated with existing processes and structures. As a result, it can be argued that organisations that are process-oriented more effectively use CRM solutions. The success of CRM depends on the management processes of the organisation. You can see this particularly during the implementation of CRM. It’s tricky for an organisation that is vertically oriented to become process-oriented. But research shows that if a business lacks this process orientation, the implementation of CRM solutions can be substantially delayed.

Technological orientation and the use of CRM software

CRM software need IT to capture, store, amend and distribute large amounts of data among stakeholders in the market. Important factors in CRM development include innovation and network infrastructure, client/server computing and business intelligence applications. Technology-oriented organisations promote research and development, and the acquisition of new technological solutions, while accruing technological knowledge through past experiences. Like a process-oriented business, a business that is technology oriented will embrace and use CRM software more effectively than a business that is not technologically oriented.

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Innovation orientation and the use of CRM systems

Businesses that consider themselves innovative easily overcome barriers, are better at adopting new systems and encourage the exchange and use of information. An organisation that views innovation as important is more likely to successfully adopt CRM systems than those organisations that don’t value innovation as highly. Because organisations with an orientation towards innovation are engaged in the research and development of new products, they are more supportive of new ideas, research-based innovation and involvement in projects and programs. For a new product to be successfully developed, an organisation needs adequate information about customers. This information can be obtained with the help of CRM systems.

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