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Issue of April 2006 

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“CRM can improve productivity by 20 percent”

Thomas Abraham, Managing Director of Sage India, talks to Sneha Khanna about the adoption of CRM by Indian organisations

Thomas Abraham

What is the state of CRM adoption in India?

Indian companies were slow in adopting CRM. One of the major reasons for this has been a lack of proper understanding of CRM as a concept and how it could benefit an organisation. In the past, CRM was identified with call centres. However, this has changed in recent times with a better understanding of the various components of CRM and increased awareness levels of how it can drive efficiencies across the board.

The need also arises as companies are increasingly becoming customer-centric. They have started looking at various customer touch-points such as the sales team, the customer service organisation and the marketing team. Concepts like productivity enhancement, service levels to customers and focussed marketing programmes have come to the top of the corporate agenda— hence the shift towards applications such as CRM.

In the last three years there has been a 50 percent increase in adoption within companies. This has resulted in significant benefits to customers. For example, with organisations going mobile, the office is not the only work area. In such a scenario, CRM tools enable sales organisations to stay connected. Likewise, different access modes—Web, offline and handhelds—have helped increase penetration across organisations. We also have scenarios wherein field employees can access the CRM system from cybercafes.

In the next 12 to 18 months we expect CRM to hit an inflection point which will see its adoption take off.

What are the reasons for service sectors being early adopters of CRM?

Increased competition in the sector meant that organisations had to think of more innovative ways to acquire and retain customers. This sector has seen more investments in IT infrastructure which is an enabler for applications.

Though back-end systems are always important for smooth functioning of systems, for the service sector it is also important to have a user-friendly interface. Many companies in this sector have adopted CRM before investing in ERP. Verticals in the services sector include retail and commercial banks, brokerages, insurance, mutual funds, IT services, BPO, hospitality, travel, media and logistics.

Which other verticals have been in the forefront of CRM adoption?

In recent times, manufacturing has been adopting CRM tools to counter competition. The trend is towards seeking an integrated CRM and ERP solution. Over 20 percent of present engagements in manufacturing involve end-to-end solutions which necessarily require an ERP component.

Take for instance a manufacturing firm that sells 50 percent of its products directly to corporate customers and the balance through a channel of dealers. The company has a sales force which has to manage its corporate customers, and requires tools for revenue and product forecasting. It would also like to track stock positions at C&F points, manage accounts receivables, and have available order and invoice details. These pieces of information can be viewed on a common system when data from the ERP is made available in the CRM. Likewise, sales analysis of customers, dealers and regions can be accessed by this integration.

Could you elaborate with an example of how CRM helps organisations?

Let’s take the case of media companies. Sales executives of TV channels can have a rate card built into the CRM system, thus helping them to make customised proposals to their clients. This also helps in retaining consistency while dealing with different customers and across the sales team. They would like to link their programmes to specific brands that they wish to attract, and also get the attention of media buying houses and ad agencies. This again gets streamlined in the CRM system.

There are a number of other verticals where CRM and sales force automation play a pivotal role for sales organisations to maximise their customer relationships. It is important for these organisations to have a 360-degree view of their prospects and customers. Likewise, they also need to predict business that can be generated across geographical territories, product lines and sales executives.

In insurance, instant access to customer history drives CRM adoption. Companies can document customer complaints and be able to address them in a timely manner. CRM in customer service also provides necessary escalations to supervisory staff if issues are not resolved within pre-defined time-frames. This way customer service standards can be defined for organisations to follow.

Could you elaborate on the analytical capabilities of CRM?

CRM analytics come in various flavours such as:

  • Data mining to understand past behaviour of customers that may help predict future behaviour.
  • Providing insight into organisational and individual performance.
  • Helping organisations discover root causes for performance issues, thus enabling them to take proactive and corrective actions and to make strategic decisions.
A dashboard is a visual presentation of key metrics, graphics, tables and text. It is an interactive tool for analysing data. However, the detailed analysis is performed using a reporting interface

Analytical CRM can benefit the sales organisation and the customer service department, and provide crucial data to marketing executives who design programmes for different segments.

A dashboard is one of the major initiatives in this area. The dashboard is a visual presentation of key metrics, graphics, tables and text. It is an interactive tool for analysing data. However, the detailed analysis is performed using a reporting interface. From the content displayed on the dashboard, end-users can drill out underlying reports. The reporting interface provides the analysis that end-users need to answer their business questions, identify root causes, take corrective action, and understand what proactive decisions are required in order to meet company objectives. All this is accomplished through drilling, pivoting and filtering the data displayed in the reports.

How does CRM help in revenue generation?

CRM can deliver significant benefits to companies.

  • It helps in maximising revenue from their existing customer base. By carefully targeting their installed base of customers and offering more products and services, one can cross-sell and up-sell. Also, these customers could be upgraded to newer versions of products or sold additional products and solutions. Some of our customers in India have been able to increase their revenues by over 10 percent though this targeted exercise.
  • Internal data in the CRM system can help you identify which are your most profitable customers. These customers can then be singled out for special focus and attention, thereby ensuring that the most profitable customer stays loyal to you. We have seen a reduction in customer attrition rates by over 20 percent when companies embrace this initiative.
  • The efficiency of the sales team goes up as their systems and processes are automated and they discard paper systems. The time saved by them can go into customer engagements thereby increasing their productivity which in turn should result in increased sales. There have been instances wherein productivity has increased by over 20 percent in organisations implementing CRM.
  • Customer service levels will improve as CRM helps in systematically tracking issues and addressing them with suitable systems. Customer service can also be offered on multiple channels to ensure that customers have easy and convenient access to service representatives within the organisation. Enhanced customer service leads to improved customer satisfaction and increased revenues in the long-term from the same customers.

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