Organizational Change and CRM Success: A Research Framework

By | February 9, 2018

Goodhue et al. (2002) note that “in general, changing the technology without transforming the organization often leads to less-than-optimal results. Companies may need to develop a customer- centric culture, hire personnel with the vision and skills needed to implement and practice CRM and change business processes, organizational structures and reward systems.” If, for instance, the sales people, as a result of inadequate training, unsatisfactory reward system, or incomplete restructuring of sales processes, refuse or are unable to use the CRM system, customer knowl- edge acquisition might suffer significantly. The company might therefore fail in gaining an up-to- date customer database, which would contain all the transactions that salespeople would otherwise have stored as a result of their personal interactions with customers. Ultimately the customer database might degrade and become practically useless.

 

 

In order to help in analyzing the research results, we constructed a research framework (Figure 4.1), which is mainly based on the research findings by Rigby et al. (2002), Starkey and Wood- cock (2002), and Wigand (1997).

Our research framework contains the presumption that a company first needs a clear relation- ship marketing strategy to become customer focused. In order to be able to implement this strat- egy, a company needs to transform its core marketing, sales, and customer service processes. This transformation of processes again has effects on individuals (changes in reward system, changes in job division). As an enabler to these new customer-focused processes there is the CRM system, which will be implemented in coordination with the transformation of processes and utilized by organizational actors (sales people, marketing professionals). Along the way of implementing this new strategy, the organization is likely to face emergent as well as planned change events (triggered by putting the relationship marketing strategy into action).

The framework implies some causal relationships between various entities, but our main pur- pose here is not to search for evidence on whether some of these relationships do or do not exist in our case company. The motivation is to give the reader a clearer view of the potential change entities. We use this framework as lenses when we try to find answers to questions like: What types of organizational change events, both intentional and emergent, may occur in a CRM imple- mentation? How in practice have these change events been dealt with in our case company? How did our case company succeed in the transformation of its key marketing, sales, and customer service processes? In the next two sections we shall introduce our case company and present the research methodology.

 

RESEARCH SETTING AND METHODOLOGY

 

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We selected Tieto-X Plc for our study for three reasons. First, the company operates very closely with its customers. Tieto-X is Finland’s leading contract work solutions company specializing in IT expertise.

Most of its revenue comes from contract work services supplied by software designers and programmers, who often work inside the customer’s premises, and who participate in the customer’s IT development project as if the customer firm had employed them. It is therefore crucial that the customer also has access to Tieto-X’s operational system in order to follow up the progress of an IT project, control its task-related transactions, and have access to all other information con- nected to the history of the cooperation with Tieto-X. Second, Tieto-X has over 120 Finnish companies and organizations as customers, including industry leaders from various business sec- tors—for example, from finance, public administration, trade and industry, telecom and media. Many of them, such as Nokia, have a demand for advanced electronic interconnection with their IT suppliers. They are willing to participate in the development of new and innovative technolo- gies to streamline and enhance supplier–customer interaction in general. Third, by selecting Tieto- X for the study, we gained the opportunity, in the case company, to take on the role of actors in the implementation process of a new CRM solution. We acted as a consultant to Tieto-X’s project group and we were also nominated to the steering group of the implementation project. This gave us the unique opportunity to observe in a more insightful way the multifaceted phenomenon of organizational change.

Tieto-X’s turnover in 2002 was EUR 17.3 million and its operating profit EUR 2 million. The entire turnover was generated in Finland. Tieto-X has its headquarters in Helsinki and six local

 

 

offices in other regions of Finland. The number of personnel is close to 270. Tieto-X was listed on the HEX Helsinki Exchanges NM-list in the autumn of 1999. Since Tieto-X’s founding in 1995 (the first year’s turnover was 0.59 million EUR) it has grown as fast or even faster than many other global and domestic IT companies. Tieto-X reached its best year—in terms of revenue figures—in 2001, when the turnover reached 21.39 million EUR. For Tieto-X, as well as for many other IT companies worldwide, year 2002 brought a slowdown due to a decrease in demand for IT services both globally and locally. The company’s turnover declined by 19 percent. None- theless, Tieto-X has retained its profitability.

 

DATA COLLECTION AND ANALYSIS

 

We chose to conduct a single case study “which focuses on understanding the dynamics present within a single setting” (Eisenhardt 1989). Related to the differences in research approaches rep- resented by Deetz (1996), we leaned toward the local/emergent approach. We first constructed a research protocol. We then chose to focus on gathering data of organizational change events related to both the project of the CRM application implementation and the process of implement- ing a relationship-marketing strategy. We used various methods and sources for data gathering. We conducted person-to-person interviews and interviewed members of the business manage- ment (CEO), marketing people (chief marketing executive, key account managers), members of the sales organization (salespeople, sales assistants), as well as IT experts (CRM project manager, CIO, members of the CRM software vendor’s project group). We used documents extensively (annual company reports, process descriptions, CRM project requirements definition reports, CRM implementation project memoranda) and utilized our own side notes.

We interviewed persons, asking mostly questions related to the phenomenon of change. We followed the logic of first asking an open-ended question, “Have you experienced any changes during the CRM systems implementation project?” If the answer was “Yes,” we asked for some clarification with more detailed questions, such as: “Would you please describe in more detail the changes on the individual level, which you mentioned you have experienced?” All interviews were recorded and transcribed. A total of twelve interviews were conducted during the period of December 2002 through September 2003. Each interview lasted from 30 to 120 minutes. Several meetings and recheckings with the interviewees were conducted during the process, in order to clarify our understanding of the topics that arose when we analyzed the material. In this research we chose to operationalize the definitions of process, change events, and entity from Van de Ven and Poole (1995).

First, we used our framework in order to connect all the different change events found in the material to the respective entities in our framework. An example of an answer that led us in this analysis to locate a change event is: “Well, in the situation in the autumn of the year 2000, and in the winter of the year 2001, you could see that the big things were over, and now you had to sort of turn around the whole sales organization from being a recruiting organization, which just needed to recruit more IT experts, to become a customer-oriented sales organization working on the front line.” These types of answers led us to categorize this particular change event to be emergent by its nature and to belong to both process and individual entities in our framework.

In order to be able to distinguish minor from major change entities we compared the answers of different individuals, and when we could determine that several of the interviewees had men- tioned the same change entity, we interpreted it as a major change event and listed it in Table 4.2. Then we arranged the observed change events of these entities into chronological order and lo- cated them on some of the observational levels (environmental, organizational, and individual).

In Table 4.2 we have gathered the results of our inquiry by listing the change events and the observational level at which they were identified. The table also includes the notion of whether the event was by its nature an emergent or a planned one.

Second, we analyzed the recorded interviews in order to find any discursive elements such as stories, metaphors, and humor that might help us in constructing meaning in organizational change.

 

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