Open Source Customer Relationship Management Solutions

Bachelorarbeit von Henrik Vogt

Introduction:

In order to stay ahead of the competition companies are more and more forced to turn their attention to their real assets: their customers.

Both, the value of the individual customer and the development of personalized relationships with them have made customer relationship management as one of the emerging topics in the last years.

Faced with the increased knowledge of the customers about existing product- and service offerings on the market, companies are more than ever required to develop specific customer knowledge in order to adapt their products and services according to the requirements of the customer.

Customer relationship management is no longer something that only huge leading enterprises use in order to gain a competitive advantage.

In the increased competitive landscape, it is now a necessity for survival even for small and medium-sized enterprises.

Customer relationship management is a complex and difficult way of doing business. CRM means more than just installing a software or automating customer touch points. It is about the reinvention of a customer-oriented organization.

According to the special requirements of small and medium-sized businesses, the degree of difficulty of the CRM approach even increased.

The following Bachelor’s Thesis reveals the overall importance of a customer relationship management system especially for small and medium-sized enterprises. In addition to the topic of CRM, the increasing importance and possibilities of open source software is revealed.

The main research question consists of the idea if open source customer relationship management systems are able to fulfill the requirements of a CRM software.

In order to be able to answer this question, the following Bachelor’s Thesis made use of the literature available on the topics CRM, special requirements of small and medium-sized enterprises, and the topic of open source software.

By revealing what a CRM have to fulfill in order to be classified as customer relationship management system according to the findings in the literature, various requirements are identified.

In the next step, the three most popular open source CRM software systems Sugar CRM, vTiger, and OpenCRX are scrutinized under the criteria if they are able to fulfill the requirements defined in the previous steps.

The conclusion discusses the previous findings and outlines the chances and limits of open source customer relationship management solutions for small and medium-sized enterprises.

In addition to this, the requirements of a successful implementation of a CRM system are revealed and the concept of seeing CRM as a corporate strategy is concretized.

The aim of this Bachelor’s Thesis is to outline the holistic approach of CRM and to examine the research question if open source CRM solutions are able to fulfill the requirements previously defined according to the underlying literature.

Table of Contents:

	List of Figures	III
	List of Tables	III
	List of Abbreviations	IV
1.	Introduction	1
2.	Importance of CRM for Small and Medium-Sized Enterprises	2
2.1	Customer Relationship Management	3
2.1.1	Definition	3
2.1.2	Reasons for Using a CRM	6
2.1.3	Opportunities and Risks of CRM	9
2.2	Small and Medium-Sized Enterprises	14
2.2.1	Definition	14
2.2.2	CRM for Small and Medium-Sized Enterprises.	17
3.	Requirements of Customer Relationship Management	19
3.1	Criteria Based Requirements of CRM	19
3.1.1	Basic Components of a CRM System	19
3.1.1.1	Analytical CRM	21
3.1.1.2	Operational CRM	23
3.1.1.3	Collaborative CRM	25
3.1.2	Main Features of a CRM System	26
3.1.3	Special Requirements of Small and Medium-Sized Enterprises	29
3.2	Requirements of a Successful Implementation of a CRM System	31
3.2.1	Prerequisites for Implementing a CRM System	32
3.2.2	How to Ensure a Successful Implementation	34
4.	Open Source CRM Solutions	37
4.1	Open Source	37
4.1.1	Definition	37
4.1.2	Why to use Open Source Software	39
4.1.3	Open Source CRM Solutions	41
4.1.3.1	Sugar CRM	42
4.1.3.2	vTiger	45
4.1.3.3	OpenCRX	46
4.1.4	Comparison of the three Open Source CRM Solutions	47
4.2	Could Open Source CRM Solutions Fulfill the Requirements	51
4.2.1	Basic Components	51
4.2.2	Main Features	54
4.2.3	Special Requirements of Small and Medium-Sized Enterprises	62
5.	Conclusion	63
	Bibliography	66
	Internet Sources	71
	Appendix	73

Text Sample:

Chapter 3.1.1.2, Operational CRM:

Nearly all customer relationship management systems on the market are providing a huge amount of various features in order to depict the CRM processes and to perform the tasks of a CRM. These features of the operational CRM could be classified into the subareas of marketing, sales, and service. Figure 5 also called them marketing automation, sales automation, and service automation.

The goal of marketing automation according to Hippner and Wilde is the control and support of the marketing activities and the holistic organization of the customer data. The campaign management module builds the centre of marketing automation and identifies, through multi channel integration, all possible sales channels.

In specific, marketing automation means: Performing the right offer to the right customer at the right time, in the right communication style, and through the right communication channel.

The required information in order to be able to perform an efficient campaign management derives from the previously performed analysis of the customer data. Insofar, does the realization of a successful campaign management depend to a great extent on the results achieved in the analytical CRM. In addition, the features of the collaborative part of the CRM are needed which importance will be revealed in the next chapter.

A typical marketing campaign begins with the identification of appropriate customers which could be addressed by direct mailings with for example specified brochures about one special new product the company developed.

After a certain amount of time, the company starts follow-up calls and invites the customers, who are interested, to the presentation or sends them additional information material. After giving the customer another certain amount of time for studying the additional information, further follow-up calls or direct mailings could be done with the overall goal to create a specified offer to the individual customer or the identified customer group.

Especially this approach ensures a successful and efficient administration and supply in form of a developed archive where all the information are saved and stored. Through the help of the analytical CRM all information about products, advertising material, telephone calls, emails, fax or other communication activities are provided in an efficient manner in the information system.

This specified information could be delivered directly to the employee who requires the information in order to perform their next step in the acquisition process.

The use of sales automation in the selling process is another sub-are of the organizational customer relationship management.

In the preparation phase, those customers are analyzed and selected who should be contacted in the future. In addition, special targets were defined which should be achieved by the contacting approach. The features of the CRM should help the company to make an efficient planning of the meetings in form of a shared calendar.

Like already mentioned in the marketing automation, does also the sales automation part require the information from the analytical CRM component.

With the use of analytical CRM it could for example be analyzed why a special offer did not match the requirements of the customer in the past and how the new offering should be adapted in order to achieve the desired result.

The term service automation describes the service area of the company and includes employees in the office work (call center etc.) as well as in the sales force. Especially this service area is responsible for the achievement of customer satisfaction.

Therefore, service automation is implemented in the operational CRM and has the task to assure an increased provision of the customers which in the end should lead to the overall goal of an increased customer satisfaction.

In conclusion, it could be stated that the overall goal of operational customer relationship management is defined in the improvement of the processes between the organization and the customer (Knöpp and Helling 2006: 20). Operational areas are, next to the campaign management, the customer service and the complaints management service.

In order to enhance customer satisfaction and to increase the service level of the organization, the operational part of the holistic CRM approach is indispensable.

Collaborative CRM:

The definition of collaborative CRM is discussed in various different approaches in the literature. According to Knöpp and Helling does collaborative CRM just mean „a frictionless and consistent interaction between the company and the customer through various communication channels”.

However, this definition does not reveal the holistic approach of collaborative CRM but defines its main goal.

In addition to the definition of Knöpp and Helling (2006: 25), some professionals state that also the communication between the partners and suppliers is depicted in the collaborative part of CRM. The communication channels used in this concept could be for example: telephone, e-mail, letter, personal contact, fax, etc.

The goal of collaborative CRM is the efficient handling of the communication activities and the systematic transmission and allocation of consistent information to the customer.

Insofar does collaborative CRM also include the technical requirements in order to establish and assure the communication process between the company and the customer. This communication process is defined as the integration and interaction of the CRM software with the call center. In the literature this is defined as Computer Technology Integration (CTI). With the help of CTI, it is for example possible to display all relevant information of the customer to the employee when he/she phones and asks for a specific service.

Next to the CTI, Unified Messaging (UMS) is the next technological approach in order to establish a holistic communication platform in the collaborative CRM part. Unified Messaging is defined as the function of integrating different communication channels like telephone, fax, e-mail, and classical letters into one communication platform.

All these inquiries were collected in the communication platform and worked off in an equal manner in a universal queue.

According to the outlines above, it can be stated that an efficient customer relationship management consists out of three different phases which were described according to the three different CRM areas explained above.

First, it is about the identification of profitable and unprofitable customer groups through various analyses which were performed in the analytical as well as in the operational part.

In the second step, CRM involves actions in order to win the target customer which has been identified through the analysis. These steps are mainly performed in the operational part with the help of the campaign management tool. After identifying and winning the target customer, ties should be developed in order to keep the customer. Ideally, this is performed through the goal of achieving customer satisfaction and customer retention. Especially the operational and collaborative part are responsible for performing this task of CRM.

However, it has to be stated that customer retention has to be understood as a product of customer satisfaction and the whole CRM approach have to be implemented as a business philosophy in order to be able to exploit the whole opportunities of the holistic CRM understanding.