Recently, several organizations have increasingly recognized the necessity to be more customers oriented. As a result, Customer Relationship Management (CRM) has been a top requirement for many organizational strategies. CRM systems are usually viewed as the information systems that enable organizations to realize a customer focus. CRM has had a tremendous growth in the recent past and it was estimated that in 1998, the universal outflow on CRM was around $1.9 billion (IDC and AMR Research, 2001) while the predications were that in 2004 it was in the regions of $23.5 billion. Clearly, this shows that the number of organizations adopting the use of CRM is on an increase. However, as the number of organizations adopting the use of CRM increases, surveys also indicate that success is proving elusive because of a number of potential risks. According to a report by Dickie (2001), a CRM project of 202 organizations revealed that 30.7% of them said that they had attained enhancements in ways they serve or trade to their clients (Datamonitor 2001). Another survey by Giga (2001) revealed that most organizations underestimate the CRM complexities, tend to invest inadequately or lack a clear business objective in provision of CRM. This shows that there is a gloomy scenario in organizations making use of CRM, but it is also obvious that not all organizations are experiencing disappointment as far as the use of CRM is concerned (Gartner Group 2003).
According to Mickie (2000), CRM has grown to be different for several people. One such vision of CRM is the application of the client associated material to carry appropriate goods and facilities to consumers. Light (2001) says that as CRM develops, other deeper meanings are evolving especially the ones emphasizing on logistics, goals, and the complex character of CRM. CRM has evolved from business processes to put an emphasis on customer retention relationships by the use of effective management of customer relationships. This is because it is believed that customer relationships affect the profitability of the organization. Moreover, Sandoe (2001) and Newell (2000) have explored the strategic methods used to improve customer retention.
CRM has in the recent past become the buzzword for any major organisation and according to Ody (2000), there are three views for the CRM concept. They are i) precision marketing, ii) creating a single coherent view of customer as associated with the centre and iii) focusing on consumer database with CRM. In enumerating the importance of CRM, Ovum (1999) postulates that CRM is a business idea built on the fact that it pays to know and look after your customer. Tersine & Harvey (1998) warn that organiations should be aware that as globalization occurred, international competition levels will arise as well as threat of new entrants.
CRM is involved in organizational process modification and in the presentation of new technologies. This has a big effect on effective leadership. This is because leaders have the knowledge of the internal and external environments of the enterprise and are strategically best situated to implement CRM projects. Leaders also have influence and power to authorize and control the budget of the organization (Pinto and Slevin 1987).
CRM systems are usually based on standard software and major reasons for implementing CRM include increased development speed, maintain system integrity and reduce staff requirement (PriceWaterhouse 1996). However, it has been documented that standard software has several limitations including functionality, flexibility, control, cost and competitiveness (Butler 1999, light & Holland 2000 and Lucas et al 1998). A limitation of CRM software is that they assume that all organisations have similar business processes and if a company does not have best ways of implementing its CRM, then they will experience difficulties in aligning their the software with their business models.