A CONCEPTUAL MODEL OF CUSTOMER RELATIONSHIP MANAGEMENT ALIGNMENT

Norshidah Mohamed, Nor Shahriza Abdul KarimInternational Business School, Universiti Teknologi Malaysia http://www.ibs.utm.my

Murni Mahmud, Abdul Rahman AhlanInternational Business School, International Islamic University Malaysia

Ramlah HusseinSri Jentayu Sdn. Bhd.

Jasber KaurFaculty of Computer & Mathematical Sceiences, Universiti Teknologi Mara

IADIS International Conference Information Systems 2012 Berlin Germany10 March, 2012

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OUTLINE• Introduction

• Literature review

• Propositions

• Conceptual model

• Conclusion

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INTRODUCTION• Customer relationship management (CRM) –

the process of acquiring, retaining and growing profitable customers on service attributes that customers would value and create loyalty to the organisation (Brown, 2000).

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INTRODUCTION ..CONT’CRM – a business strategy that provides seamless integration among marketing, sales, customer service and field support business areas that touch the customers through integrated management of people, process and technology (Pan and Lee, 2003).

LITERATURE REVIEW

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PERSPECTIVES OF CRM

• Metrics for customer satisfaction, customer value, customer interaction and customer knowledge (Kim et al., 2003)

• A process to support customers i.e. relationship initiation, maintenance, termination. Reinartz et al. (2004)

• A typology of CRM strategy, customer insight, customer contact and marketing (Batenburg and Versendal, 2004)

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PERSPECTIVES OF CRM ..CONT’

• CRM processes: customer acquisition, customer selection, customer extension and customer retention (Boddy et al., 2008)

• eCRM – technological perspective comprising operational, collaborative, analytical and strategic CRM (Aurelie and Laid, 2008)

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PERSPECTIVES OF CRM ..CONT’

In summary, CRM covers

• Strategy

• Processes

• Technology

• Need to be quantified – metrics

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BUSINESS-IS STRATEGIC ALIGNMENT

• Fit between business strategies and IS strategies

• “… the degree to which the IT mission, objectives and plans are supported by business mission, objectives and plans” (Reich and Benbasat, 1996)

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BUSINESS-IS STRATEGIC ALIGNMENT ..CONT’

• Over the years business-IS strategic alignment models have applied / adapted / extended STROBE (Venkatraman, 1985), STROEPIS / STROIS (Chan et al., 1997) and SAM (Luftman, 2000)

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BALANCED SCORECARD• Traditional financial measures and historical

perspectives are insufficient for monitoring performance (Kaplan and Norton 1992; 1996)

• Balanced Scorecard uses actual performance vs. set targets

• Based on four perspectives : financial, customer, internal business process and learning and growth (Kaplan and Norton 1992; 1996)

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RESEARCH QUESTION• Does the relationship between business-

IS strategic alignment and CRM process-IS alignment explain CRM alignment?

• What are the impacts of CRM alignment?

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RESEARCH OBJECTIVES• To clarify the relationship of CRM

alignment

• To use prior research findings on business-IS strategic alignment, CRM and balanced scorecard to develop and test an integrated model on CRM alignment

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PROPOSITIONS

P1: CRM process-IS alignment is positively and significantly correlated to CRM performance.

P2: Business-IS strategic alignment is positively and significantly correlated to CRM performance.

P3: Business-IS strategic alignment is positively and significantly correlated to CRM process-IS alignment.

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CONCEPTUAL MODEL

CRM PROCESS–ISALIGNMENT

BUSINESS–IS STRATEGIC

ALIGNNMENT

CRM PERFORMANCE

CRM ALIGNMENT

IMPACT OF CRM ALIGNMENT

P3

P2

P1

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PILOT STUDY• 50 survey questionnaires distributed to

Malaysian small and medium enterprises

• 18 survey items adapted from prior researches

• Likert scale 1 (“strongly disagree”) – 5 (“strongly agree”)

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PILOT STUDY .. CONT’

Constructs Source of constructs and items used in the research

No. of items

Cronbach’s alpha

Business-IS alignment CRM process-IS alignment CRM performance

Kearns and Sabherwal (2007); Viaene et al. (2007) Reinartz et al. (2004); Chen and Ching (2004) Kim et al. (2003); Chen and Ching (2004)

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8 6

0.800

0.848 0.802

All Cronbach’s alpha > 0.7 suggesting reliability for all constructs.

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CONCLUSION• The research builds on business-IS strategic

alignment, CRM process-IS alignment and Balanced Scorecard perspectives to conceptualise a model for CRM alignment.

• Progress : Pilot study has shown reliability of instrument used

• Next step : data analysis using structural equation model to test the model

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ACKNOWLEDGEMENTThe research is supported by the

Fundamental Research Grant Scheme Ministry of Higher Education Malaysia

(504/RES/G/14/3/2/2 FRGS).