Change Management according to a CRM implementation

Table of content

Table of abbreviations

Table of figures

1. Introduction

2. Disambiguations and definitions
2.1 Change Management
2.2 Customer Relationship Management

3. Change Management
3.1 Relevance of Change Management
3.2 Characteristics of Change Management
3.2.1 Change Management processes
3.3 Change Management programs for a CRM implementation

4. CRM
4.1 CRM as a corporationwide strategy
4.2 CRM processes
4.3 CRM systems and tasks
4.3.1 Operational CRM
4.3.2 Analytical CRM
4.3.3 Collaborative / Communicative CRM
4.4 General requests for CRM applications

5. Resistances to changes
5.1 Reasons for resistances
5.1.1 Emotions as a central theme of resistances
5.2 Phases of resistances
5.3 Overcoming resistances

6. Success factors of Change Management
6.1 Importance of a corporate vision (for Change Management)
6.2 Change Management instruments
6.2.1 Organisational instruments
6.2.2 Communication- and information instruments
6.2.3 Motivational instruments
6.2.4 Qualificational instruments

7. Conclusion
Literature index
Table of Appendix
Appendix

Table of abbreviations

illustration not visible in this excerpt

Table of figures

Figure 1: Relevance of Change Management for organisations (2003 vs. 2008)
Source: transalated on the base of ’Abbildung 1: Bereits heute wird dem Change- Management eine hohe Bedeutung zugemessen – Tendenz steigend’. Capgemini Consulting
(2004), in: Personal- wirtschaft 6/2004 (p.28).

Figure 2: The Change Management fields of action
Source: Own graphic, transalated and created on the base of ‘Abbildung 7.14: Handlungsfelder des Veränderungsmanagements’, in: Vahs (2007): Organisation – Einführung in die Organisationstheorie und -praxis (p.320).

Figure 3: Three phases of a Change process (according to Lewin)
Source: Own graphic, created on the base of Kurt Lewins ‘3 stages of change processes’

Figure 4: Top-down approach of Change Management processes
Source: Own graphic, transalated and created on the base of ‘Abbildung 7.27: Vorgehensweise bei der Einführung von Veränderungen’, in: Vahs (2007): Orga- nisation – Einführung in die Organisationstheorie und -praxis (p.362).

Figure 5: Bottom-up approach of Change Management processes
Source: Own graphic, transalated and created on the base of ‘Abbildung 7.27: Vorgehens- weise bei der Einführung von Veränderungen’, in: Vahs (2007): Organisation – Einführung in die Organisationstheorie und -praxis (p.362).

Figure 6: Center-out approach of CM processes & Multiple-Nucleus approach of CM processes Source: Own graphic, transalated and created on the base of ‘Abbildung 7.27: Vorgehens- weise bei der Einführung von Veränderungen’, in: Vahs (2007): Organisation – Einführung in die Organisationstheorie und -praxis (p.362).

Figure 7: The Change Management success factors 2005 vs. 2003
Source: Translated graphic according to Abbildug 23: Commitment und Glaubwürdigkeit des Managements sind der wichtigste Erfolgsfaktor bei Veränderungsprozessen. In: Capgemini (2008): Change Management-Studie 2008, Business Transformation – Veränderungen erfolgreich gestalten (p.40).

1. Introduction

In our world which is rapidly changing, with saturated markets, fast technological developement and merciless competition, companys are forced to rethink their organisation and to create successful strategies, to react adequar to changes and to differ from their competitors.

Changing customer needs, replacement of the leading Management, new employees or the implementation of new information technology – there are many reasons why organisations change. Change is nowadays a central element of every organisation. Some are driven by the change, others drive the change and are managing it active and foresighted. The surrounding of companies changed and they are on the brink of new challenges with an integrated orientation on profitable customer relations and therefor a successful Customer Relationship Management (CRM) is basically and is a central competitive advantage (Rapp, 2000, p. 35). The implemen]tation of new IT-systems focusing the CRM aspect is important to understand the customer needs and handle the customers adequare to their relation to the organisation.

The assimilation of the organisation to the changed market- and environmental terms are leading to deep changes. Changing structures, a new organisation of company divisions, introduction of new managment systems, adjustment of the companys strategy are mostly driven or intensified by the globalisation and are first and foremost concerning the industrial nations (Vahs, 2007, p.281).

So changes concern the company, executives and employees, for all these affected participants a change means to learn new working techniques, the handling of new IT or the coorperation with new colleagues. Employees often react to this kind of changes with ressistance. Change Management (CM) operates these change processes and reacts to the ressistance of the affected people. Further more it handles the implementation of CRM, which failed numerous in the past. The reasons are mainly the neglect of the affected people, their positions inside the companys and the still prevailing opinion about CRM as a pure IT-system (Pattloch 2001, p.26).

2. Disambiguation and definitions

2.1 Change Management

Capgemini Consulting - ‘one of world's foremost provider of consulting, technology and outsourcing services’ (Capgemini 2008, p.1) - is conducting that there is no general accepted definition of CM, due to the fact that the comprehension of the terms of change is influenced by situative, personel and theoretical aspects and should be defined in the individual context (2006, p.16).

Gabler’s economic encyclopaedia concludes CM as the strategy of the planned and systematic change, which comes by the influence of the organisational structure, cooperative culture and individual behavior, under greatest possible participation of the employees concerned. The selected wholistic perspective considers the reciprocal effect between individuals, groups, organications, technology, environment, time as well as the communication, structures of value and power constellations which are existing within the organisation (Gabler 1997, S.2897).

Historically the beginning of the popularity of this expression can be classified in the middle 1990s. It was the time when Business Reengineering was criticised to change the operating level of a company, but the Top-Management level not in any comparable way.

Nowadays CM in general deals with alteration and changes that affect the organisation in all parts (Thom 1997, p.201). CM is also a combination of so called ‘soft’ factors of the development of the organisation and ‘hard’ factors of the reengeneering (Reiß 1995, p.293; Buchner et al. 2001, p.16; Buchner et al. 1999, p.30). Buchner et al. put the focus, that CM also includes the human aspects of changes and mental processes (1999, p.30). Also Boening/Fritschle and Mohr/Woehe include this explicit in their definition of CM and call it further ‘the acceptance of the affected’ of change measures (1997, p.34) while Mohr/Woehe define the coaction of humans, the structures and the technology of organisations to navigate and control as a subject matter of CM (1998, p.31). CM is further the target-oriented analysis, planning, realisation, evaluation and ongoing development of wholistic adjustment measures within an organisation (Vahs, 2007, p.281). To alter employees, teams, or whole organisations from a current state to a desired future state, Change Management manages the peoples perspective of change.

‘This not necessarily means it is getting better if it will be something else, but if it should be good in the future, it must be different – it must be changed’ (according to Georg Christoph Lichtenberg, german physican and author). This realisation of changes is mostly complex and must be planned and managed, because there are plenty of possibilities - the central task is to analyse, decide and find the right way to implement the management steps. But beside these abstract definitions the term Change Management should be reckoned in the context of Customer Relationship Management (CRM). Within the explanations of many authors a better comprehension of CM in context of CRM is badged. The acceptance of employees and the resistances, that can appear within the implementation of CRM (Helmke/Uebel 2001, p.65; Pattloch 2001, p.26) is the central point. Capemini Consulting further concludes that CM concentrates nowadays on this second side - the overcoming of resistances - which mostly was transferred to the experts of the organisational change. This led to the awareness that CM is an area to develop best fitting procedures and programs and leaves few space for standard solutions in the sense of ‘best practice’-concepts (Claßen 2007, p.4). According to Hippner et al. (2001, p.12) this definition of CM is the base for further explanations in this assignment, where CM handles these resistances appearing prior and within an implementation of CRM and the proactive dealing of far reaching changes inside a company. It includes especially concepts and instruments to reduce or even avoid the resistances and to support the acceptance of CRM.

2.2 Customer Relationship Managemet

Saturated markets parallel to a higher customer potential and decreasing customer loyality as well as a higher customer sensibility for prices and services the leaders and managers of an organisation are faced with new challenges (Schulze 2001, p.235). With this approaches a succesful CRM is the precondition for a longterm survival in the markets (Engels/Ritter 2000, p.49).

CRM is further defined as a term applied to implementations of IT-systems, to manage and optimize contacts with the implementing organisation and its customers. CRM software is used to support these processes, storing information of customers and prospective customers. Information in the system can be accessed and entered by employees of different departments (for example Sales, Marketing or in the specific Customer-Service department). Details of any customer contacts and additional information should also be stored in the system, in particular the knowledge of the employees about the customer that the employees gain and improve during their cooperation with the specific customers. This knowledge should be transfered in the CRM systems. The objective behind this approach is to improve the services, provided directly to the customer, and to use the information in the system for targeted marketing and sales activities (Rigby et al. 2002, p.101–109) and to handle the customer adequate. So the term CRM was generally used to refer to a software-based approach of handling customer relationships, but most CRM software vendors point out that a successful CRM implementation requires a wholistic approach. These implementations often fail, because the perspective was limited to software without providing the appropriate motivations for employees to learn, understand and take full advantage of the information systems (Weinreich 2002, p.20-26).

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