In the information system world, before a problem can be solved, it first must be properly defined. Members of the organization must agree that a problem actually exists and that it is serious. The problem must be investigated so that it can be better understood. Next comes a period of devising alternative solutions, then one of evaluating each alternative and selecting the best solution. The final stage is one of implementing the solution, in which a detailed design for the solution is specified, translated into a physical system, tested, introduced to the organization, and further refined as it is used over time.
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Unfortunately, the same mistakes happen again and again when organizations decide to embrace a new information system either as a solution to a problem or set of problems the organization perceives it is facing, or a management realization that the organization should take advantage of new opportunities to perform more effectively. These mistakes occur repeatedly due to the lack of a thorough system analysis which includes a feasibility study to determine whether each proposed solution is feasible, or achievable, from a financial, technical, and organizational standpoint.
The importance of system analysis, information requirements, and feasibility study come of their advantages in determining whether each alternative solution is a good investment, whether the technology needed for the system is available and can be handled by the firm’s information systems staff, and whether the organization is capable of accommodating the changes introduced by the system.
Customer relationship management systems are very popular information systems nowadays and have been hailed as a way for companies to find, influence, and retain customers, even though industry experts cite failure rates for CRM rollouts of up to 70 percent. That’s a disastrously high figure for initiatives that typically cost hundreds of thousands–or even millions–of dollars. Most often the complexity of CRM systems can turn deployments into expensive, time-consuming mistakes when companies embrace a complete CRM package from well known vendors like SAP, or Seibel while they need only low-cost, easy-to-implement CRM software with some common CRM features like lead generation and management, deal tracking, and customer support management.
“Citizens National Bank searches for a system solution” will be my main discussion in this case study which I think depicts a simple example of organizations that underestimate the importance of a thorough assessment to business processes and a deep analysis to the projected information system to define the requirements of the new system, available alternatives, and comparing multiple selection criteria in order to choose the best available solution which capable of performing the required tasks, satisfy users’ needs, and compatible with the organization’s legacy systems.
Singleton Needs a CRM Package
The initial problem that Mark Singleton was trying to resolve is the implementation of a CRM system to increase sales by raising the number of contacts relationship bankers were making and improving the tracking of these activities so that the bank could learn more from them. Also Singleton wanted a CRM system that places a great value on the person-to-person interactions between his relationship bankers and their customers and doesn’t interfere with those interactions and diminishes the relationship bankers’ rapport with customers. (Lauden, 2010)
In the problem-solving process which is especially valuable when we need to build new systems as a solution to a problem or set of problems the organization perceives it is facing. The problem in this case came from the management realization that the organization should take advantage of new opportunities to perform more effectively, but they didn’t apply the four steps of problem solving. In the problem-solving process to system building, we would need to take the following four steps: (Lauden, 2010)
(1) Define and understand the problem.
(2) Develop alternative solutions.
(3) Choose the best solution.
(4) Implement the solution.
Citizens National Bank CEO Mark Singleton achieved the first step with an outstanding performance in defining and understanding the problem for which they need to build a new system but he failed dramatically in applying the rest of the steps required by the problem-solving process to build a new system. Mr. Singleton did not devise, develop or try several alternative solutions before opting for a new CRM system to solve the problem of paper and manual work and replace it with a new information system to automate some of the bankers’ tasks. Because he did not develop alternative solutions, he couldn’t choose the best solution which led to a failed implementation at the first time.
Figure : Problem Solving Process
Source: Lauden, Management Information Systems
New System Implementation! Its Tangible and Intangible Benefits
Organizationally, Citizens National Bank of Texas is a private, full-service bank with headquarters in Waxahachie, Texas, and 200 employees that has operated independently since 1868. Citizens National Bank relies on personal, retail, and commercial customers and serves businesses and consumers in Ellis County and other nearby counties, primarily in communities with populations of 25,000 or less. (Lauden, 2010)
Citizen National bank operates heavily manual and count on paper system in which sometimes a salesperson that left Citizens National could take records of customer interaction with him or her, leaving the bank with no information to maintain the relationship. The paper system also created too much information for Singleton and his branch managers to process effectively. So that the old paper system cannot support the large number of new customers and the annual grow at a rate of 12 percent. (Lauden, 2010)
A major part of Citizen National’s strategy for continuing growth was to implement customer relationship management (CRM) software. The CRM strategy targeted the bank’s two main contact points with customers: the bank’s call center and its sales force. The objectives of a solution for Citizens National Bank would be to reduce the amount of time, effort, and errors in the tracking of activities made by relationship bankers and to increase sales by raising the number of contacts relationship bankers were making and improving the tracking of these activities so that the bank could learn more from them. (Lauden, 2010)
Increased productivity: Using a CRM system will enable relationship bankers to improve their tracking activities with customers, which in turn increase their productivity and give them ability to serve more customers.
Lower operational costs: using electronic records will substantially reduce papers used and results in cost saving.
Reduced workforce: this is will be the result of increasing bankers’ productivity to serve more customers, which in turn will considerably reduce the workforce required to handle the projected increase in sales.
Reduced rate of growth in expenses
Reduced facility costs: due to paper reduction, and workforce reduction.
Improved organizational planning and flexibility: because the paper system created too much information for Singleton and his branch managers to process effectively. The CRM system will give them efficient information to make effective decisions.
Improved decision making: having accurate information under executives and managers control will dramatically enhance the decision making.
Improved operations: The CRM system will enable the bank to approve credit and loan applications more quickly.
Improved asset utilization and improved resource control.
More information available in a timely manner.
Enhanced employee goodwill: because under the old paper system, a salesperson that left Citizens National could take records of customer interaction with him or her, leaving the bank with no information to maintain the relationship.
Increased job satisfaction among employees.
Higher client satisfaction: nothing will satisfy the customers more than getting a quick approvals and smooth transactions.
Better corporate image: this is will result automatically from an increase in job satisfaction among employees and a higher client satisfaction.
Why didn’t the implementation of the Siebel CRM solution work out
I believe that the implementation of the Siebel CRM solution didn’t work out for Citizens National because it was not the best solution that applies or fits into the defined problem; it didn’t work out because it was not a result of a thorough selection process that went through precise evaluation for multiple alternatives or solutions. The implementation failed for many factors, I will classify these factors in terms of organization, technology, and people issues
Organization: the approach of Citizens National toward nearly all business functions, from tracking customer leads to generating reports about them, was very basic. The Siebel software was simply too rich in features. (Lauden, 2010)
“From the start, Citizens National had trouble getting the software to fit its rather straightforward, basic customer-lead tracking and reporting needs.”With Siebel, we were spending way too much time turning off capabilities that we didn’t need,” Singleton explains. An example of functionality that didn’t fit Citizens National’s business model was Siebel’s capability for setting up customer support cases. While some large corporations may want to set up a support case with detailed complaint-tracking and resolution functions, the small bank had no use for it. Service complaints that come in to Citizens National are handled on the spot by its call center. For service inquiries that require a follow-up, such as a customer asking about the reordering of checks, the call-center representative schedules an activity by sending an e-mail to the employee who handles check orders.” (Bartholomew, 2007)
People: Employees found the software to be too complicated. They were surprised to learn, for example, that the system did not automatically generate potential business opportunities for customers on their records. Furthermore, bankers were not able to view multiple relationships between a customer and the bank on the same screen. The extra navigation was confusing and inefficient. (Lauden, 2010)
The relationship bankers were the key employees; the system was intended to be of value to them, and, in turn, provide value to the bank. However, they found no incentive in the Siebel environment because their compensation was based on sales, and sales had become harder to make.
Citizens National’s bankers found the system difficult to navigate. For instance, the banking representatives couldn’t understand why an opportunity to make a loan to a particular customer wasn’t listed under the customer’s record. “You have to assign that opportunity to that person,” explains Doug Furney, president and CEO of The Small Business Solution. “If you don’t make those relationships when entering the data, the opportunity won’t appear under that customer’s record. Not everyone easily grasped this concept.” (Bartholomew, 2007)
Furney says the way the screens were laid out in Siebel, Citizens’ bankers had to flip back and forth between the various screens to identify different relationships that customers had with the bank. “Understanding these relationships in the system was very confusing to their bankers,” he says.
As a result, the bank’s top sales representatives, who weren’t eager to change the way they did their work to fit the needs of the software, found Siebel’s learning curve too steep to negotiate. “Citizens National’s 16 relationship bankers never got over the ease-of-use problems that Siebel presented,” Furney says. (Bartholomew, 2007)
Technology: Citizens National experienced compatibility issues between the database formats in Siebel and those used by the bank’s core banking application, developed by Kirchman. As a result, the two systems had difficulty exchanging information properly. The bank was forced to spend a significant amount of time fixing such compatibility issues, which negatively impacted its ability to serve customers. (Lauden, 2010)
Citizens National also had to deal with a raft of customization issues, often stemming from the differences between databases. Furney worked to integrate Siebel with Citizens National’s core banking application. The bank uses banking software from Kirchman, whose vertical systems are used by numerous small and medium-size banks to process and track customers’ deposits, loans and trust accounts. “Trying to get these two systems to talk was a challenge,” he says. (Bartholomew, 2007)
One basic difference was the way the core banking application set up its customer data fields. The Kirchman system did not have individual fields for both the customer’s first and last names, choosing instead to include the full name in a single field. By contrast, in Siebel, the customer’s first and last name each had a data field. “That’s the kind of thing we ran into when we tried to marry data from these two different systems,” Furney says. “This kind of integration takes time, and customers don’t realize how much time is required.” (Bartholomew, 2007)
Was QuickBase a better solution for Citizens National
In my perspective, QuickBase was the best alternative solution that meets the requirements of Citizens National Bank for a new IT system that is an easy to use, capable of doing some tracking activities, and store the interactions between relationship bankers and their customers and doesn’t interfere with those interactions and diminish the relationship bankers’ rapport with customers.
QuickBase was designed for organizing, tracking, and sharing information among team members in the workplace while encouraging progress by notifying workers via automated e-mails of updated files, new task assignments, and approaching deadlines. Because QuickBase was not programmed as a specific business application, businesses could modify its database structure to meet specific business functions. (Lauden, 2010)
One reason some small and medium-size companies, as well as groups within larger ones, are adopting QuickBase is its flexibility. Intended not just for customer management, QuickBase-which is actually more of an easily modified database than a full-fledged business application-can be harnessed for other business tasks. For example, Procter & Gamble uses the system to track technology projects. Because it’s easy to use, runs online via any browser and doesn’t require an I.T. professional to set up, the hosted application is finding its way into all kinds of businesses. (Bartholomew, 2007)
There are many factors suggest that the bank ended up with the right approach and the right choice of product, some of these factors are:
The Citizens National staffs were able to make changes to QuickBase themselves, so the costs of ownership and maintenance fees were much lower.
QuickBase offered Citizens National flexibility that it did not have previously. Because the system was Web-based, the relationship bankers were able to use it anywhere that they had access to a browser.
Relationship bankers and management received daily updated access to all interactions and transactions, enabling them to track business in a way that was never possible previously.
For the first time, Citizens National was able to completely track sales opportunities and, as Singleton said, “where we lost business, so we know where we need to make those extra 10 or 15 sales calls.”
Also central to the success of QuickBase at Citizens National was Furney’s ability to integrate the system with the Kirchman core banking application. Furney configured QuickBase to upload new account information to the core system every night via an XML interface.
For example, a banking representative can click on a commercial customer’s file and immediate see all the contacts that have been made with that customer by bank staff, any actions that were taken on the customer’s behalf, and the end result. Citizens National bank representatives use it to check on customers to see if there has been a follow-up call to a contact, whether a voice-mail message was left with the customer, who the salesperson was and the status of the contact. “It’s been an invaluable tool for us to keep track of our customers,” Singleton adds. (Bartholomew, 2007)
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A Complete CRM package is Not for Everyone
Industry experts cite failure rates for CRM rollouts of up to 70 percent. That’s a disastrously high figure for initiatives that typically cost hundreds of thousands–or even millions–of dollars. For smaller businesses or for departments within large companies, even successful implementation at that cost is out of the question. “Anecdotally there’s a fairly high failure rate attributed to CRM implementations,” says Jocelyn Young, program manager for CRM services for IDC. (Desmond, 2010)
Customer relationship management systems have been hailed as a way for companies to find, influence, and retain customers. Packages from companies like Onyx, Pivotal, and Siebel go far beyond simple contact and sales management–they link sales, marketing, and customer support operations into a single, cohesive chain. But the complexity of CRM systems can turn deployments into expensive, time-consuming mistakes. Many companies need low-cost, easy-to-implement CRM software. Fortunately, affordable packages have finally matured. (Desmond, 2010)
Figure CRM Systems
All for one, one for all: CRM deployments can be expensive
because they touch nearly every part of a business. By driving everything from
marketing campaigns to call center operations to inventory management through a
single knowledge base, companies are able to fine-tune customer interactions at
every point of contact.
Jerry Norman, president of Market Answers, a CRM consultancy in Austin, Texas, says the broad definition of CRM is part of the problem. “If you ask 100 people on the street what CRM is, you are going to get 100 answers. The executives know that they need CRM, but they don’t know what they are getting.” (Desmond, 2010)
One way to sidestep the issue, says Norman, is to narrow the focus of the CRM effort. Lower-cost CRM products such as Microsoft BCentral Customer Manager, SalesForce.com, and SalesLogix provide common CRM features like lead generation and management, deal tracking, and customer support management. These packages can be installed on a company’s servers or hosted by an application service provider. But while a Siebel deployment can cost several hundred thousand dollars, a package like SalesLogix can be had for less than $50,000 for 20 users–a relative pittance by CRM standards. (Desmond, 2010)
So I believe that, organizations that would benefit from using Siebel CRM package are the large corporations which use it to connect multiple departments inside the firm like sales, marketing, and customer support operations which will link them into a single, cohesive chain. Example for such organizations is Verizon Wireless, we will examine in the next section of this case study how Siebel CRM helped Verizon to achieve its business objectives and gets a competitive advantage. This case study is taken from www.Oracle.com
Verizon Business Delivers New Sales and Support Tools and Improves System Performance by 35%
Verizon Business Basking Ridge, NJ
Verizon Business, a unit of Verizon Communications, is a global leader in communications and IT solutions. With one of the world’s most connected internet protocol networks, Verizon Business delivers communications, IT, security, and network solutions to many of the largest businesses and governments.
Industry: Annual Revenue:
Communications US$93.5 billion
“Our work with Accenture to upgrade our Oracle systems has improved system performance significantly. In a recent survey, 84% of users said performance was ‘faster’ or ‘much faster.’ Plus, our sales and support staff have new tools to improve productivity and customer service, which ultimately drives customer retention and revenue.” – Rob Moore, Director Verizon Business
Empower sales and support staff with new tools to provide end users with a better experience, supporting customer retention, which is vital in today’s competitive communications industry
React to market demands and growing competition from new and traditional players in the market with more flexible pricing
Improve system performance and lower maintenance costs
Strengthen reporting and enable “what if” scenario testing
Worked with Accenture to upgrade to Oracle’s Siebel CRM 8.0 and Oracle Business Intelligence Enterprise Edition, taking advantage of evolving technology to support a range of customer-facing communications industry business processes
Gained new sales and support tools-for tasks ranging from quoting to contact management-to help 15,000 users better serve 250,000 large and midsize business customers
Improved pricing flexibility with new, dynamic pricing features that allow the company to introduce new pricing or customer retention offers on demand, instead of requiring code changes and a separate release, which previously took several months
Provided sales and support staff with a new, easy-to-use interface that supports best practices and improves productivity
Expanded reporting functionality to drive greater visibility
Upgraded hardware and middleware and enabled a service-oriented architecture (SOA) to extend integration across the enterprise and further consolidate systems
Lowered support costs and positioned the company for long-term cost savings by reducing customizations
Improved system performance by 35% and accelerated processes by up to 12 hours-vital for a system that processes about 120 quotes, 104 contracts, and 340 opportunities daily
Improved user satisfaction, with 84% noting faster performance
Completed the upgrade within a short, eight-month timeline
Could Citizens National have made a better choice?
I think everyone would agree with me that Citizens National Bank could have made a better choice from the beginning if its management followed the required rules and procedures of building a new information system. Citizens National Bank could have made a better choice if its CEO Singleton analyzed the size and scope of the needed system and tried to find answers for the following questions:
What system will provide us with a genuine business benefits?
How can the firm adjust to the changes introduced by the new system solution?
What alternative approaches are available for the needed system solution?
In the information system world, building a new information system in order to alleviate an existing problem in the business operations requires a deep system analysis. “Before a problem can be solved, it first must be properly defined. Members of the organization must agree that a problem actually exists and that it is serious. The problem must be investigated so that it can be better understood. Next comes a period of devising alternative solutions, then one of evaluating each alternative and selecting the best solution. The final stage is one of implementing the solution, in which a detailed design for the solution is specified, translated into a physical system, tested, introduced to the organization, and further refined as it is used over time.” (Lauden, 2010)
Transforming business processes into an automated information system and taking advantage of new opportunities available through the rapid development of information systems and technologies is never an easy task and should not be taken for granted. In order to achieve high results and gain the expected returns from the investment in new information system, organizations should follow the recommended procedures in building a new system from defining the system requirements, determining its scope, to choosing the best available solution that is capable of performing the required tasks without going through a series of complicated screens that lead to the frustration of end-users.
The systems analysis lays out the most likely paths to follow given the nature of the problem. Some possible solutions do not require an information system solution but instead call for an adjustment in management, additional training, or refinement of existing organizational procedures. Some, however, do require modifications to the firm’s existing information systems or an entirely new information system.
Sometimes the lack of a thorough system analysis and feasibility study make you get lost in the forest of a complete business application that fits only large corporations and that is exactly what happened to Citizen National Bank in its search for CRM system. While the approach of Citizens National toward nearly all business functions, from tracking customer leads to generating reports about them, was very basic, they chose Siebel CRM system that was simply too rich in features which employees found it to be too complicated.
Citizen National Bank could have prevented the demise of five hundred thousand dollars in a learning lesson if they conducted a thorough system evaluation and selection process from the outset in which they would find that the required system was an easy to use system that doesn’t exceed a thousand dollar in its implementation cost.
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