53
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
A Feasibility Study of the Customer
Relationship Management Application on
Small and Medium Enterprises
1
2
3
1
Yichen Lin, JrJung Lyu, Hwan-Yann Su and Yulan Hsing
1
Graduate Institute of Technology Management, National University of Tainan
Department of Industrial and Information Management, National Cheng Kung University
3
Department of Asia-Pacific Industrial and Business Management, National University of Kaohsiung
2
Abstract
The traditional focus of IT operations no longer meets the challenges of tomorrow’s fast-changing
business environment. Conducting business through electronic commerce, the handling of transactions over
communications networks, continues to grow in a seemingly unabated fashion. In western countries, many
companies quickly grow up in a short time because of good Customer Relationship Management (CRM)
system.
Traditional enterprises such as steel companies are affected by economics desolate. This study
has deep discussion for steel companies with a broader CRM strategy aimed at maximizing the value
of the firms. The main objective of this paper is to develop a strategic CRM framework to find new
opportunities to create customer value for Taiwanese small and mediums steel companies. This study sent
the questionnaires to Taiwanese small and mediums steel companies to understand their customer-based
perspective. Moreover, successful cases in western countries are reviewed to help Taiwanese companies
build their business from a new perspective. Analysis of the field study yielded three emergent themes: the
present and future marketing strategies in Taiwanese steel company; the customer connection strategies;
and CRM total suggestions. Finally, implications for the practice and theoretical-research development of
CRM are also provided.
Key words: Customer relationship management, information technology, electronic commerce, customer
profolio
54
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
1. Introduction
Recently, companies are turning to CRM to better understand customer wants and needs. The
adoption of CRM is being fuelled by a recognition that long-term relationships with customers are one of the
most important assets of companies providing improved profitability and competitive advantage. More than
ever, enterprises are subjected to more quickly changing forces: globalization, deregulation, convergence of
industries, to name a few. CRM is a business strategy, not a specific software or hardware. Instead, it aims
to understand, anticipate and manage the needs of organizations’ current and potential customers (Brown,
2000).
CRM approach has been used for many enterprises to maintain and further create the customers.
Iron and steel is one of the most important industries in any nation, and specialty steels occupy a uniquely
critical place in the iron and steel industry. The quality of life and level of industrial development are
directly related to the availability of specialty steels in many ways. Specialty steels are essential to many
industries including motor vehicles, electrical and electronic equipment and parts, machinery, chemical
equipment, energy production, aviation and aerospace and others. While the total amount of specialty steels
is somewhat limited, they are used in a wide variety of forms and applications and involve very high levels
of technology. This study focuses on Taiwanese small and medium steel companies to see how they can
improve the relationship between companies and customers. Although this study takes Taiwanese small and
medium steel companies as examples, it still can be collated by other enterprises. In order to get a holistic
view of customers and their relationship to the entire enterprise, this paper explored three interrelated
objectives in the following.
(1) Provide a framework in making the strategic customer.
(2) Conduct a feasibility study of the CRM application on Taiwanese small and mediums steel companies.
(3) Leverage customer knowledge and find new opportunities to create value for customers.
2. Theoretical background
As the business world quickly shifts from product focus to customer focus, most companies find
that treating existing customers well will be good for profitable and sustainable revenue growth. However,
companies are challenged to really satisfy the customers in the age of electronic commerce. Customer
relationship management is an important subject more than ever before. Brown (2000) defined CRM as
‘the key competitive strategy you need to stay focused on the needs of your customers and to integrate
a customer-facing approach throughout your organization.’ The early stage of CRM is to collect potential
customers and keep customers. The middle stage of CRM is to satisfy customers and establish loyalty. The
current and future stage of CRM must include customer behavior analysis and active service. Basically,
CRM can help organizations establish long-lasting relationship with customers to improve profitability.
The reasons why organizations need CRM are to make specific selling channel resources more productive;
migrate transactions, customer relationships, and tasks to low-cost channels; get multiple sales and
service channels to work more closely with demand chain partners; and better leverage market programs
and resources. Based on customer segmentation, one-to-one marketing could be done through effective
A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises
55
CRM strategies. Effective and efficiency customer contact such as precise and quick response could
help organizations implement CRM approach. Chatterjee (2000) emphasized that CRM is a discipline
which focused on automating and improving the business processes associated with managing customer
relationships in the area of sales, management, customer service, and support. Srivastava, Shervani
and Fahey (1999) developed a framework for understanding the integration of marketing with business
processes and shareholder value. CRM market in Asia-Pacific has been quickly growing up in these years.
In Taiwan, high technology enterprises such as Acer and Microsoft TWN had field service and sales force
automation. Vrechopoulos (2004) suggested CRM process can be applied and related to the components on
an innovative EU funded business-to-business and business-to-consumer electronic commerce application,
though the mediation of the CRM methodology. Davis and Halligan (2002) have emphasized to extend the
brand by optimizing customer relationship.
Government and some enterprises such as communication, finance and insurance companies have
already built up call center. In general, call enter is undergoing, but lacks the integrated CRM total solution.
Curry and Curry (2000) have written a clear, step-by-step guide to profiting from this exploding movement,
with strategies that are aimed at the small and medium-sized business owners who need CRM most. This
can help Taiwanese small and medium enterprises have good examples to go on CRM strategies.
Wayland and Cole (1997) have presented the Value Compass model which can make explicit
connection between what managers know about their customers and how they can leverage that information
to create customer value. In the future, customers will increasingly seek to manage the relationship
themselves, using new technologies, and that companies need to prepare themselves for their world. Lin and
Su (2003) have revised the value compass model from Wayland and Cole (1997) for the strategic analysis of
CRM. Furthermore, Lin et al. (2006) have presented the idea about the knowledge-enabled for CRM. This
paper extends the paper of Lin and Su (2003) to verify the strategic analysis of CRM for Taiwanese small
and mediums steel companies.
3. Research Design
The research structure is presented in Figure 1. This study has five stages for implementing CRM.
First, since customer connection strategy is so important, customer knowledge management, customerconnecting technologies and customer economics in Taiwanese companies have to be reviewed. Second,
based on the value compass model, four dimensions of relationships value (customer portfolio management,
value proposition design, value-added role and reward and risk sharing) are identified. Third, taking
Taiwanese small and mediums steel companies as examples, the questionnaire is designed to understand
Taiwan status for CRM strategies. Fourth, based on the CRM experience from western countries, CRM
strategies have been recommended for Taiwanese small and mediums steel companies. Fifth, different
CRM demands lead to choose different CRM solutions to get CRM customerization. As shown in Figure 1,
each part of research structure is discussed in the following.
56
are identified. Third, taking Taiwanese small and mediums steel companies as
examples, the questionnaire is designed to understand Taiwan status for CRM
strategies. Fourth, based on the CRM experience from western countries, CRM
strategies have been recommended for Taiwanese small and mediums steel companies.
Fifth, different CRM demands lead to choose different CRM solutions to get CRM
customerization. As shown in Figure 1, each part of research structure is discussed in
the following. Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
Customer
Connection
Strategy
The Value
Compass
Model
Questionnaire
Design
CRM
Strategy
Analysis
CRM
System
Design
Figure
1: Research
structure
Figure
1: Research
structure
(1) Customer
connection
(1) Customer
connection
strategy strategy
In general,
companies
that ataremanaging
good atcustomer
managing
customerarerelationships
are also
In general,
companies
that are good
relationships
also good at managing
good
at
managing
customer
knowledge;
using
customer-connecting
technologies
and
customer knowledge; using customer-connecting technologies and understanding customer economics.
understanding
customer
economics.
Arthur
Andersen
(1999)
identified
that
customer
Arthur Andersen (1999) identified that customer knowledge management could help companies assess their
knowledge management could help companies assess their improvement. The CRM
improvement. The CRM status for business will be determined by a combination of customer knowledge;
status for business will be determined by a combination of customer knowledge;
customer-connecting technologies and customer economics.
customer-connecting technologies and customer economics.
(2) The
model model
(2)value
Thecompass
value compass
There There
are fourare
dimensions
in the valuein
compass
modelcompass
which include
customer
four dimensions
the value
model
whichportfolio
includemanagement;
customer
valueportfolio
proposition
design;
value-added
role
and
reward
and
risk
sharing.
These
four
dimensions
help
management; value proposition design; value-added role and reward
and risk
business
identifyThese
the selection
and management
customer identify
relationships;
business’s
to its
sharing.
four dimensions
helpofbusiness
the the
selection
andcontribution
management
customers’
value chain;
the position ofthe
the business’s
company within
the industrytovalue-added
chain and
the basis
on
of customer
relationships;
contribution
its customers’
value
chain;
the
position
of
the
company
within
the
industry
value-added
chain
and
the
basis
on
which customers and suppliers interact to create and share value. Each company has to decide what set of
which
customers
suppliers interact to create and share value. Each company has
positions
is both
desirable and
and attainable.
(3) Questionnaire design
This study designed a questionnaire which included three parts: part 1 collected the basic information
of companies; part 2 found out the situation of customer knowledge; customer-connecting technologies and
customer economics in companies and part 3 acquired companies’ desirable position on the value compass
model. Basically, this questionnaire aimed to discuss three questions in the following.
6H ow do Taiwanese small and mediums steel companies consider their customer connection
strategies:
6What are the current and future marketing strategies on the value compass for Taiwanese small and
mediums steel companies?
6B ased on Taiwanese small and mediums steel companies, total solution of CRM has been
recommended.
We sent the questionnaire to 70 small and medium steel companies in Taiwan, usually addressed the
envelope to CEO. Our idea was that CEO will be able to realize their customer connection and marketing
strategies.
(4) CRM strategy analysis
There are many successful cases from western countries to implement CRM approach. These examples
provide better strategies for companies to get CRM approach started. CRM strategy analysis can be carried
out to get CRM total solution.
(5) CRM system design
A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises
57
According to ARC’s (1999) report, awareness ratio of CRM vendors is shown as follows: IBM (17%),
NCR (15%), ORACLE (13%), HP (10%), LUCENT (8%), MICEOSODT (8%), NORTEL (6%), SAS (5%),
SYBASE (4%), Other (14%) [1]. CRM system design not only identifies demand of computer software and
hardware but also enables consultant profession knowledge to make it successful. Consequently, this study
identifies the clear guideline for companies to build up CRM system. Moreover, CRM vendors also can be
chosen to do CRM customerization.
4. Research Findings and Discussion
This section deals with descriptive analysis of the questionnaire results. The questionnaires were sent
to 70 small and medium steel companies in Taiwan. There were 27 responses from these 70 companies.
While there were total 27 responses to 70 questionnaires, for a response rate of 39 percent, only 23 of the
returned questionnaires were suitable for use in this study. We now carry out the analysis of customer
connection strategies and position on the value compass.
4.1 Customer connection strategies
Figure 2 shows how these Taiwanese small and mediums steel companies consider their customer
connection strategies. According to Figure 2, these companies have done 51% for customer knowledge;
81% for customer-connective technologies and 78% for customer economics.
(1) Customer knowledge
As shown in Figure 2, there are just half of the respondents who care about customer knowledge.
Wayland and Cole (1997) have suggested how companies could execute and effective CRM process through
planning; focusing; generating; codifying; sharing and leveraging. Since Taiwanese small and mediums
steel companies have done 51% for customer knowledge, Wayland and Cole’s suggestion might help them
build up knowledge management system that captures information, creates knowledge, share and leverage
knowledge. Some suggestions are identified in the following.
6Building the stock of knowledge. The purposes of this suggestion are to identify what companies
already know about their customers and to build speculative knowledge to support longer-range
planning.
6Generating knowledge at the right level and depth. It is necessary to identify the level at which
companies have to generate knowledge and to decide the depth of knowledge companies have.
6Generating the right kind of knowledge. It is important to generate the right kind of knowledge
through understanding what customers want via dialogue; observing how customers use products
and services and designing analysis model to predict likely outcomes.
6Leveraging knowledge. Many companies may just realize who the customers are and what they
want, but customer knowledge has to be more extensive to leverage.
6Application of knowledge management model. Arthur Anderson (1999) presented a knowledge
management model that can help companies to keep knowledge between companies and customers.
(2) Customer-connective technologies
customers are and what they want, but customer knowledge has to be more
extensive to leverage.
z Application of knowledge management model. Arthur Anderson (1999)
presented a knowledge management model that can help companies to keep
knowledge between companies and customers.
(2) Customer-connective
technologies
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
58
As shown in Figure 2, the strategy of customer-connective technologies has the
highest proportion (81%) than the other two strategies. Customer-connective
As shown
in Figure the
2, the
strategyorofelectronic
customer-connective
technologies
has theand
highest
proportion
technologies,
physical
links between
customers
companies,
(81%) than
the
other
two
strategies.
Customer-connective
technologies,
the
physical
or
electronic
can support longer-range planning. Basically, technologies could be applied links
in
between customers
and
companies,
can
support
longer-range
planning.
Basically,
technologies
could
the customer relationship to increase the value of relationship. Some suggestionsbe
applied inare
thepresented
customer relationship
to increase the value of relationship. Some suggestions are presented in
in the following.
the following.
˄˃˃ʸ
ˋ˃ʸ
ˋ˄ʸ
ˊˋʸ
51%
ˉ˃ʸ
ˇ˃ʸ
˅˃ʸ
˃ʸ
˖̈̆̇̂̀˸̅ʳ˞́̂̊˿˸˷˺˸ ˖̈̆̇̂̀˸̅ʳ˖̂́́˸˶̇˼̉˸ ˖̈̆̇̂̀˸̅ʳ˘˶̂́̂̀˼˶̆
˧˸˶˻́̂˿̂˺˼˸̆
Figure
Customer connection
strategies
Figure
2:2:Customer
connection
strategies
6Identifying
the main purposes.
The main
purposesThe
in investing
customer-connective
technologies
z Identifying
the main
purposes.
main inpurposes
in investing
in
have to be
identified to maximize technologies
the value exchange
withtothebecustomer
customer-connective
have
identified to maximize the
exchange
with
customer
6Buildingvalue
up a feedback
loop.
Thethe
feedback
loop can deliver the right message to particular customer
z
Building
up
a
feedback
loop.
The feedback
and allow the marketer to build profiles of customers
over time. loop can deliver the right
message
to
particular
customer
and
allow
thetechnologies
marketer allow
to build
profiles
of
6Setting new database systems and agent technologies. These
companies
to tailor
customers
over
time. customers.
World Wide
Web sites
to individual
z
Setting
new
database
and agent technologies. These technologies
6Conducting on-line relationship. Itsystems
is important to create mutual value and strengthen bounds to
allow companies to tailor World Wide Web sites to individual customers.
engage in E-commerce for extending market share.
z Conducting on-line relationship. It is important to create mutual value and
(3) Customer economics
strengthen bounds to engage in E-commerce for extending market share.
Based on Figure 2, Taiwanese small and medium steel companies have done 78% for customer
economics. Customer economics means the analysis of the value of companies in terms of the number and
quality of their relationships. Some suggestions are identified in the following.
6Estimating the value of customer relationships. The volume, margin and duration model and the
probability-of-purchase model have to be used to estimate the value of customer relationships.
6Understanding the distribution of customer relationship value. It is important to gain insights of
customer relationships through understanding the distribution of customer relationship value.
6M anaging the Customer por tfolio for maximum growth. Based on customer value and
responsiveness, business has to manage the customer portfolio for maximum growth.
4.2 The value compass
The current and future positions for Taiwanese small and medium steel companies on the value
compass have been shown in Table 1 and Table 2. Furthermore, some successful cases from western
countries could be good examples to help Taiwanese small and medium steel companies identify CRM
A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises
59
strategies. According to four dimensions of the value compass, a set of positions for Taiwanese small and
medium steel companies are analyzed in the following.
Table 1: The current and future positions on the value compass model
Position
Situation
Market
Group
Individual
Present
10
6
7
6
10
7
Future
12
6
5
6
8
9
CoreProduct Extended Offer Total Solution
Table 2: The current and future positions on the value compass model
Position
Product Manager Process Manager Network Manager Neutral Performance Outcome
Situation
Present
12
11
0
13
8
2
Future
10
8
5
10
4
9
(1) Customer portfolio management
As shown in Figure 3 and 4, it can be seen that about 44 percent of the 23 respondents currently choose
market level; 26 percent of the 23 respondents choose group level and 30 percent of the 23 respondents
choose individual level. In the future, 52 percent of the 23 respondents choose market level, 26 percent
of the 23 respondents choose group level and 22 percent of the 23 respondents choose individual level.
Consequently, the current and future positions that the 23 respondents choose are market level. Clearly, the
markets broadly, making few distinctions among customers for their products.
larger proportions
of the
respondents
choose market
in the future
and thesome
smallersuggestions
of the respondents
Learning
from
the experience
of level
western
countries,
are
choose individual
level.
It
is
proved
that
these
companies
still
approach
their
markets
broadly,
making
few
presented in the following.
distinctionszamong
customersthe
forlargest
their products.
Learning
from the experience
western countries,
Attracting
share of
the company’s
potential of
customer
base. some
suggestionszare presented
in
the
following.
Offering a moderate level of product variety might be more effective than
6Attracting
the largest share
the company’s
potential customer base.
fragmenting
the of
customer
portfolio.
z Achieving
the ofmost
efficient
levelsbeofmore
operation
producingtheacustomer
fairly
6Offering
a moderate level
product
variety might
effective when
than fragmenting
uniform
product
in
large
volumes,
despite
the
promise
of
and
recent
portfolio.
advances
flexible
manufacturing.
6Achieving
the most in
efficient
levels
of operation when producing a fairly uniform product in large
z
Relying
on
brand
image
and customer
volumes, despite the promise of and recent
advances inself-selection.
flexible manufacturing.
z
Applying
the
strategy
that
the
right
market
is targeted with the right product
6Relying on brand image and customer self-selection.
and image.
6Applying the strategy that the right market is targeted with the right product and image.
z Not trying to distinguish and manage relationships with several different
6Not trying to distinguish and manage relationships with several different customer groups.
customer groups.
˜́˷˼̉˼˷̈˴˿
ˆ˃ʸ
ˠ˴̅˾˸̇
ˇˇʸ
˚̅̂̈̃
˅ˉʸ
˜́˷˼̉˼˷̈˴˿
˅˅ʸ
˚̅̂̈̃
˅ˉʸ
ˠ˴̅˾˸̇
ˈ˅ʸ
Figure
3:3:Customer
Figure
Customerportfolio
portfoliomanagement
management(current)
(current)Figure
Figure4:4:Customer
Customerportfolio
portfoliomanagement
management (future)
(future)
(2) Value proposition design
As shown in Figure 5 and 6, it can be seen that about 26 percent of the 23
respondents currently choose core product level; 44 percent of the 23
respondents choose extended offer level and 30 percent of the 23 respondents
choose total solution level. In the future, 26 percent of the 23 respondents choose
core product level, 35 percent of the 23 respondents choose extended offer level
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
60
(2) Value proposition design
As shown in Figure 5 and 6, it can be seen that about 26 percent of the 23 respondents currently
choose core product level; 44 percent of the 23 respondents choose extended offer level and 30 percent
of the 23 respondents choose total solution level. In the future, 26 percent of the 23 respondents choose
core product level, 35 percent of the 23 respondents choose extended offer level and 39 percent of the 23
respondents choose total solution level. Consequently, the strategy that the 23 respondents choose have
moved from extended offer level (current) to total solution level (future). Clearly, the larger proportions of
the respondents choose total solution level in the future and the smaller propositions of the respondents
choose extended offer level. In general, business can better assess the value it is creating for customers
and can identify opportunities to increase the value through realizing the customers’ value chain and total
experience. In the future, Taiwanese small and medium steel companies most likely choose all three level
of the value proposition design. Some suggestions are presented in the following.
6Using information and knowledge to enhance the value proposition.
6Enhancing the core product.
6Understanding the buyer’s criteria for the original component of the value chain.
6Appreciating the customer’s value criteria and decision-making process for the other factors in his
value chain or experience.
6Getting the buyer aware more information about the seller.
6Extending the range of its offer
˧̂̇˴˿
˦˷̈̇˼̂́
ˆ˃ʸ
˖̂̅˸
ˣ̅̂˷̈˶̇
˅ˉʸ
˘̋̇˸́˷˸˷
ˢ˹˹˸̅
ˇˇʸ
Figure
5: Value
proposition
design
(current)
Figure
5: Value
proposition
design
(current)
˧̂̇˴˿
˦˷̈̇˼̂́
ˆˌʸ
˖̂̅˸
ˣ̅̂˷̈˶̇
˅ˉʸ
˘̋̇˸́˷˸˷
ˢ˹˹˸̅
ˆˈʸ
Figure6:6:Value
Valueproposition
propositiondesign
design(future)
(future)
Figure
(3) Value-added
(3) Value-added
role role
As
shown
in 7Figure
and be8,seen
it can
seen
about
of the
23
As shown in Figure
and 8, 7it can
that be
about
52 that
percent
of the5223percent
respondents
currently
respondents
choose
manager
level;
48manager
percentlevel
ofand
thenone
23 of
choose product
manager currently
level; 48 percent
of theproduct
23 respondents
choose
process
respondents
choose
process
manager
level
and
none
of
the
23
respondents
the 23 respondents choose network manager level. In the future, 43 percent of the 23 respondents choose
chooselevel,
network
manager
level.
In the choose
future,process
43 percent
oflevel
the and
23 22
respondents
product manager
35 percent
of the 23
respondents
manager
percent of the
choose product manager level, 35 percent of the 23 respondents choose process
23 respondents choose network manager level. Consequently, the current and future positions that the 23
manager level and 22 percent of the 23 respondents choose network manager
respondents choose are product manager level. Clearly, the smaller proportion of the respondents choose
level. Consequently, the current and future positions that the 23 respondents
product and process manager level in the future. In particular, there is not any company that currently
choose are product manager level. Clearly, the smaller proportion of the
chooses network
manager
level. However,
are 22% manager
of the respondents
will wantIntoparticular,
get network
respondents
choose
product there
and process
level in who
the future.
manager there
level. Based
on
the
experience
from
western
countries,
some
suggestions
are
presented
in the
is not any company that currently chooses network manager level.
following.However, there are 22% of the respondents who will want to get network
6Increasing
information
to forge
new relationships
and partnerships.
managerapplication
level. ofBased
on and
the technology
experience
from
western countries,
some
6Adding
suggestions
presented
the following.
value to are
company’s
core in
product.
z Increasing
application
of of
information
and technology
to forge
6Assuming
responsibility
for some portion
the buyer’s production
function or value
chain. new
relationships
and
partnerships.
6Providing both buyers and sellers a form of connection more efficient than either can achieve by
z
z
z
z
Adding value to company’s core product.
Assuming responsibility for some portion of the buyer’s production
function or value chain.
Providing both buyers and sellers a form of connection more efficient than
either can achieve by operating independently.
Extracting a portion of the buyer’s consumer surplus or the seller’s
suggestions are presented in the following.
z Increasing application of information and technology to forge new
relationships and partnerships.
z Adding value to company’s core product.
z Assuming responsibility for some portion of the buyer’s production
orCustomer
value chain.
A Feasibilityfunction
Study of the
Relationship Management Application on Small and Medium Enterprises 61
z Providing both buyers and sellers a form of connection more efficient than
either
can achieve by operating independently.
operating
independently.
z Extracting a portion of the buyer’s consumer surplus or the seller’s
6Extracting a portion of the buyer’s consumer surplus or the seller’s producers’ surplus.
producers’ surplus.
6Adding capacity exists in the seller’s industry.
z Adding capacity exists in the seller’s industry.
6Enjoying a knowledge-based advantage over the buyer.
z Enjoying a knowledge-based advantage over the buyer.
6Improving
operating efficiency
expandingand
professional
capacity.
z Improving
operatingand
efficiency
expanding
professional capacity.
ˡ˸̇̊̂̅˾
ˠ˴́˺˸̅
˃ʸ
ˣ̅̂˶˸̆̆
ˠ˴́˴˺˸̅
ˇˋʸ
ˡ˸̇̊̂̅˾
ˠ˴́˺˸̅
˅˅ʸ
ˣ̅̂˷̈˶̇
ˠ˴́˴˺˸̅
ˈ˅ʸ
7: Value-added
role (current)
Figure 7:Figure
Value-added
role (current)
ˣ̅̂˷̈˶̇
ˠ˴́˴˺˸̅
ˇˆʸ
ˣ̅̂˶˸̆̆
ˠ˴́˴˺˸̅
ˆˈʸ
Figure
8: Value-added
role (future)
Figure
8: Value-added
role (future)
4.3 Reward and risk sharing
4.3 Reward and risk sharing
As shown in Figure 9 and 10, it can be seen that about 56 percent of the 23
respondents
currently
choose
neutral
level;
percent
of the
23 23
respondents
As shown in Figure
9 and
10, it can
be seen
that 35
about
56 percent
of the
respondentschoose
currently
performance
level
and
9
percent
of
the
23
respondents
choose
outcome
level.
In the
the23
choose
neutral level;
35 percent
of the 23 respondents
choose
performance
and 9 percentchoose
of
respondents
choose
performance
level and 39
percent
of the level
23 respondents
future,
44
percent
of
the
23
respondents
choose
neutral
level,
17
percent
of
the
23
respondents
level. In the
percent
of the
23 respondents
neutral level,
outcomechoose
level.outcome
Consequently,
the future,
current44and
future
positions
that thechoose
23 respondents
chooseofare
level. choose
Clearly,
the largerlevel
proportions
of the
respondents
choose
17 percent
the neutral
23 respondents
performance
and 39 percent
of the
23 respondents
choose
outcome
in the future
and and
thefuture
smaller
propositions
the respondents
choose
outcome
level. level
Consequently,
the current
positions
that the 23ofrespondents
choose are
neutral
neutral
and
performance
level.
It
means
that
these
companies
want
a
mutual
level. Clearly, the larger proportions of the respondents choose outcome level in the future and the smaller
investment
both the choose
buyer neutral
and seller
in anticipation
a future
Based on
propositions
of thebyrespondents
and performance
level. of
It means
that payoff.
these companies
want
the experience
some suggestions
are Based
presented
in the
a mutual
investment by from
both thewestern
buyer andcountries,
seller in anticipation
of a future payoff.
on the experience
following.
from western countries, some suggestions are presented in the following.
(1) Defining clearly what is meant by the value created in a relationship, what
(1) Defining clearly what is meant by the value created in a relationship, what constitutes the shares of the
constitutes the shares of the value received by buyer and seller and how the shares
valuecan
received
by buyer and seller and how the shares can be changed.
be changed.
(2) Offering
severalseveral
manufacturing
and engineering
companies thecompanies
opportunity the
to share
in the revenue
(2) Offering
manufacturing
and engineering
opportunity
to
flow.share in the revenue flow.
ˢ̈̇˶̂̀˸
ˌʸ
ˣ˸̅˹̂̅̀˴́˶˸
ˆˈʸ
ˢ̈̇˶̂̀˸
ˆˌʸ
ˡ˸̈̇̅˴˿
ˈˉʸ
Figure9:9:Reward
Rewardand
andrisk
risksharing
sharing(current)
(current)
Figure
ˡ˸̈̇̅˴˿
ˇˇʸ
ˣ˸̅˹̂̅̀˴́˶˸
˄ˊʸ
Figure
Reward
and
risk
sharing
(future)
Figure
10:10:
Reward
and
risk
sharing
(future)
4.4 CRM system design 4.4 CRM system design
As mentioned earlier, there are many vendors who provide CRM solution. The
answer
to how
to choose
willprovide
depend
onsolution.
the original
MIS tosystem
that
As mentioned
earlier,
there areCRM
many system
vendors who
CRM
The answer
how to choose
exists
in will
a company.
theMIS
analysis
theThrough
demand
CRM of
CRM
system
depend on Through
the original
system of
thatCRM
exists strategies,
in a company.
theofanalysis
system could be identified and furthermore customerization could be done. In the
CRM strategies, the demand of CRM system could be identified and furthermore customerization could be
beginning of building up CRM system, it costs a lot of money that may keep
Taiwanese small and medium steel companies away from it. However, minimum
CRM could be done to show up a blue-picture for the future.
5. Conclusion
Customer relationship management is neither a concept nor a project. Actually, it
62
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
done. In the beginning of building up CRM system, it costs a lot of money that may keep Taiwanese small
and medium steel companies away from it. However, minimum CRM could be done to show up a bluepicture for the future.
5. Conclusion
Customer relationship management is neither a concept nor a project. Actually, it is a business strategy
to help companies understand and anticipate the need of an enterprise’s current and potential customers.
Some points are concluded in the following.
(1) There are just half of the respondents who care about customer knowledge. Most likely, these companies
do not realize the importance of customer knowledge and even don’t know how it works. However, it is
time for awareness of customer knowledge. In the future, customer relationship management together
with knowledge management will help companies accumulate customer knowledge and furthermore
build up good relationships between companies and customers.
(2) Although the respondents have higher proportion for customer-connective technologies, it is important
to create mutual value and strengthen bounds to engage in E-commerce for extending market share.
(3) The respondents have shown up that they understanding the distribution of customer relationship
value because of higher proportion for customer economics. However, the companies can furthermore
maximize their rate of profitable growth by deploying their resources in proportion to the value of
relationships.
(4) Basically, Taiwanese small and medium steel companies want to stay where they are on the value
compass. But the strategy of value proposition design has been changed from extended offer level to
total solution level. Consequently, three components of a total solution strategy can be considered:
leverageable competencies, reputation, and identification with the customer base.
(5) None of the respondents has built up CRM system. Although it is still a long way to go to get CRM
system ready, the support from government will be necessary.
(6) Taiwanese small and medium steel companies lack in strategic league and competitive ability. They
might think something more to upgrade to a new perspective for the demand of global E-commerce.
Recently, many Taiwanese companies have built up Enterprise Resource Planning (ERP) system and
furthermore identify the demands of Supply Chain Management (SCM). New stage will go for building up
Customer Relationship Management (CRM) system. This study collected the information about CRM and
take Taiwanese small and medium steel companies as examples. However, this new research can be collated
by other enterprises to enhance enterprise’s competitive strength. In this changeable and competitive world,
it is necessary to develop a e-business to save cost and make business upgrade to a new perspective. Tiwana
(2000) presented a real-world guide to the essential principles of Knowledge Management (KM). This book
shows how KM and CRM technologies work, and how they impact existing processes and IT infrastructure.
Lin (2000) presented a systemic integrated communications model that might help enterprises identify
the issue of CRM and furthermore tackle these issues. Su and Lin (2006) proposed the framework of
corporate knowledge management for enhancing knowledge-based service quality of franchise stores.
This study indicated Knowledge management can provide businesses with many competitive advantages
including average level of knowledge enhancement, service quality improvement, cost and time reduction,
A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises
63
strengthened relationships among colleagues and quicker knowledge creation. So CRM together with
KM could be further studied to leverage enterprise’s strengths, maximize employees efforts and deepen
customer loyalty.
Acknowledgement
Supported by National Scientific Council (Taiwan) under grant 95-2416-H-024-001.
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Submission Date: 2006/11/15
Revision Date: 2007/1/18
Acceptance Date:2007/3/8