History of CRM
While corporations have had more or less issues in solving their problems that concern their back-end operations through the usage of Enterprise Resource Planning system (ERP), business as we know it is now focusing on how to improve their front-end of their operations with the objective towards amplify the value of products and services that they offer to their customers in both business and consumers. This is where the adoption of Customer Relationship Management (CRM) comes into play as the key role in managing their customer’s satisfaction (resulting to loyalty) and retention, while also, profitability (Ngai, 2005). Much debate from both academic and practitioners that is concern about the discipline(s) in which CRM genuinely belongs. To be clear we would also have the need for researchers to work towards conceptualizing, redefining and classifying the subject area of CRM that will governed the structured and documentation of the discipline.
The introductory of CRM has been from parallel roots of Relationship Marketing (RM), Information System (IS) and Supply Chain Management (SCM) that was formulated into the concept of CRM. Nevertheless we could say by the work of Ives and Learmonth (1984) that proposed the concept that customer resource life cycle could be managed by the use of IS and later on research help clarify that Information Technology (IT) could reinvigorate the usage with the organization’s customer service (Ives & Mason, 1990) has been the starting point of the overall conceptualization of CRM. Despite their best effort in somewhat visionary articles, mainstream research on the relevant topic has not taken preceded by a pace of several years (Romano & Fjermestad, 2003). Whilst other articles on CRM may have been published prior or at the same time in other subject area as these two possible IS articles, especially in marketing, but the fact remain that the two articles which was identified by Romano and Fjermestad (2002) extensive literature study of IS-CRM that these two articles were the accelerator in the field of CRM.
Nevertheless, during the pass twenty years, a great deal of journal articles with relevant to CRM have been published (Kevork & Vrechopoulos, 2009). The number of governing body in the international literature has been reviewed and classified by several authors whose aims are to identify the conceptualization and frameworks of CRM. Romano and Fjermestad (2002) were among the first to review and classify the literature since 1984 with more than 300 papers that concern about electronic commerce customer relationship management (ECCRM). Continue on to Kevork and Vrechopoulos (2009) finding that the discipline has increase by one fourth in the number of total research with relevance to CRM/e-CRM publications in the past 5 years. Therefore it’s safe to say, CRM has become a mainstream research domain for both academic and practitioners in the recent development of enhancing the front-end of the business operations with the aim to escalate its profitability.
CRM by the concept we could say that the discipline has become a widely recognized as a crucial business approach, but matter of the fact about the definition in the concept of CRM is not universally had be agree upon in the academic arena. Kumar (2009) define that CRM is way to determine the corporate practice and method that would maximize the lifetime value of each individual customer to the business with the practice of analysing and utilizing marketing databases and leveraging communication technologies. While Peelan (2005) on the other hand define CRM as a business strategy that is not operates only as a functional strategy, providing that it would affect the organization as a whole, including IT, Service, logistics, finance, production, and development, HR, management, and etc. The two definition of CRM has provided good understanding to how CRM is to be as scope in the boundary of the extent that CRM belongs. But the for the definition of CRM to explain in the discipline of relationship marketing is missing, this where Russell-Jones (2002) help clarify this missing link with definition of CRM in the marketing perspective, showing that CRM is about enhancing the customer service, sales effectiveness and marketing strategy which is intended to maintain the relationship with the customer over a longer period as well as to gain a greater portion of the customer wallet or spending. Although scholars has well-crafted the definition of CRM in the way as looking the discipline as a function or a process for business, but the author would like to point out that CRM should be define as “integrated connecting of systems that lay the customer in the central heart of an never ending circular sales process around it with the three dimensional knowledge of customer (for/about/from) creating a joint for the marketing channel, interaction, and opportunity to the circular sales process”. The reality of this definition shall be utilized and explain throughout the research paper.