In the search for loyality

Despite assurances by the programmers that CRM software has been created simply for working with consumers, many local companies simply do not require such a solution.

Akzhol Sadyeshov

In short, CRM (customer relations management) software includes the storage, organization and analysis of all information about a client. The employees of the majority of companies store all data about clients, as well as all operations concerning the clients, in their personal notebooks, or at best in MS Excel or Outlook. At present, CRM systems allow the insertion of all client information into a single database for companywide usage. This database includes all necessary information on clients, including names, addresses, telephone numbers, sales history, birthdays, preferences, requests, and so on.
To be more exact, CRM is not just software, but is in fact the current business strategy, aimed at increasing the profitability of a company through an increase in client loyalty over the lifetime of a relationship. Managing the relationship means the attraction of new clients, via a transformation from a “neutral” category to one of “loyal”. The software for CRM acts merely as an instrument for the implementation of the abovementioned strategy. The core of any CRM program is detailed information on each client, thorough logging of all communications, and harmonization of the entire business process.
CRM experts distinguish three major goals for the system. First is the provision of quick access to client information during an interaction, sale, and provision of services, among others (“operational” objective). Secondly, joint analysis of company and client data is possible, permitting the dissemination of new information, conclusions, and recommendations (“analytical” objective). Finally, the client may be directly involved in the activity of the company, influencing the process of product development and quality improvement of services (“collaborative” objective).
The issue of CRM becomes raised in a company when the quantity of clients begins to quickly grow, as well as when various departments must each interact with a given client. Usually, CRM software is divided into two categories: small and medium-sized enterprises (SMEs) and large companies. In the first case, the number of clients might exceed several tens of thousands, while in the second, the volume might include hundreds of thousands – or even millions.
Broad usage of CRM programs by companies in Kazakhstan began around five years ago. The pioneers in this sphere were financial and telecommunications companies. In 2002, RBK SOFT, a Russian company, installed a CRM system in KazKommertsBank (KKB). The Russian company chose to install software from the global leader in CRM, Siebel Systems. The installed system represents a specialized system for banks, financial institutions and investment companies. RBK is the largest representative of Siebel within the CIS, based on sales of CRM software. Introduction of this software package was one of the contributing factors to KKB’s significant growth in clientele. As per the results of 2002, this increase was 215%. Prior to the launch, in the previous five years the average annual growth had been merely 45%.
In 2003, Lattelekom Verdi, a Latvian company, won a tender for the supply of CRM software for Bank TuranAlem. The system for this bank also originated from Siebel.
At present, practically all second-tier banks actively working within the retail sphere are utilizing CRM systems in one or another way. At the same time, many of them attempt to gather information on clients by both official and unofficial means, utilizing various closed databases. The costs of such systems are far from being cheap.
At the end of 2005, an announcement was made about the completed launch of the Service module of Oracle database for Kazakhtelecom. The primary imputes behind installing this product was most likely the ongoing liberalization of the telecommunications market, out of which arose a necessity to create customized business processes.
The latest well-known installation of a CRM solution in the telecoms market was a project in Kar-Tel, a mobile operator. At the beginning of March, Arstel Consulting announced together with Kar-Tel the successful installation of Amdocs CRM system. According to Zulfiya Bainekeyeva, press secretary of Kar-Tel, “The active measures taken for the development of our company in the market for mobile communications have led to the rapid growth of our subscriber base. This caused a necessity to seriously reconsider those processes pertaining to relationships with our clients. The primary aim of our company is to provide the maximum possible quality and accessible service to existing clients, as well as for those who have just joined as subscribers. The solution to this problem was the installation of a system for managing interactions between the company and clients. The CRM system permits us to simplify, speed up, and automate major business processes, such as service provision and sales, and provides for the rendering of customized services via the analysis of sales history. We finally went with Clarify CRM from Arstel. This company is a recognized leader in the market for CRM software, and the product was developed with consideration for the many years of experience of the largest telecoms companies in the world.”
Clarify CRM is an information system that has been installed in many telecommunications companies worldwide, including Vodafone, T-mobile, Mobilkom-Austria, and Vimpelcom. Because of the installation of this software, Kar-Tel has significantly decreased the time spent on client interaction. A functional delineation was made between Clarify CRM and the [existing] automatic billing system, which permitted a decrease of the load on each of them. As a rule, large companies do not release information on the costs of such systems, and Kar-Tel is no exception in this case.
As per estimates by Maxim Gandrabur, the managing partner of IGM, a consulting company, “Currently, purely automated CRM solutions only exist, in my best estimate, at 5% of the companies in the country. And, only at the largest companies within the country. Separate elements of CRM [systems] exist in approximately 40% of companies. Therefore, if we speak about the installation of CRM [software] in companies, one can state that the market remains to be covered. However, we have a question here of an entirely different nature: Do we need it?”
As has been noted by Russian experts, companies that require the installation of CRM systems can be characterized by three features. These are: broad product range, rapid interaction within any typical transaction, and last, yet most important, a highly competitive environment.
Mr. Gandrabur states, “At present, one is able to see the booming growth of markets within most industries. Many of the clients with whom we work do not have any shortage in demand, but do experience one as regards qualified human resources. CRM solutions as the key have arrived from the West. Yet, the West has already transitioned through the period in which there was an intensive growth within their economies. Currently the market with the West is seriously fragmented, with sharp competition and minimum returns stimulating companies to hone their sales mechanisms via interaction with clients. Principally, this was the reason behind the development of the CRM concept. The technology of managing relationships with clients was created to meet the needs of Western business. Kazakhstan differs greatly from the West quite a bit. At present, in our country many companies do not require CRM [systems] of the same sorts as have been traditionally provided.”
Indeed, the effectiveness of CRM depends quite a bit on the type of market and business. Many available functions within CRM packages are not utilized when a market is in the growth stage, and while the strategy of grabbing at more market share is being realized. In such a situation, being number one and extending the client base by any means are the most important goals. Certainly, there are signs of increasing competition in some industries, particularly the markets of finance, telecommunications and pharmaceuticals. CRM is a very powerful instrument in the interaction with clients due to enhanced competition and narrow markets.
Quite often, the desire to introduce CRM software at a company is just an element of fashion being promoted quite a bit by IT companies. Everything should happen in its own time. As Mr. Gandrabur says, “A CRM system can be a very useful instrument, and may generally suit a company, but taking into account the existing stage of development, only 20% of the program capacity will be utilized, though capital was expended for 100% of the package.”