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World Applied Programming, Vol (3), Issue (3), March 2013. 126-132 ISSN: 2222-2510 ©2013 WAP journal. www.waprogramming.com

Customer Relationship Management and Supply Chain Management Muhammed Kürşad Özlen

Nereida Hadžiahmetović

International Burch University, Bosnia and Herzegovina [email protected]

International Burch University, Bosnia and Herzegovina [email protected]

Abstract: Today’s global markets and fierce competition among the enterprises force them to adapt and implement new strategies and solutions for the revealed continuous challenges. The purpose of this paper is to examine the level of implementation of supply chain management, customer relationship management, and information systems in Bosnian Small and Medium Enterprises (SMEs) by employing a developed survey questionnaire through the employers of Bosnian SMEs. The results showed fair levels of implementations of the subject items in general. Even though the results show the weak level of agreement, this study is expected to be beneficial for further related research in Bosnia and Herzegovina. Keywords: Supply chain management, Customer relationship management, Information systems, Survey, Bosnia and Herzegovina

I.

INTRODUCTION

Scholars search the need for supply chain management (SCM), customer relationship management (CRM), and information systems (IS) for companies in order to enhance their performance many times. However, they are slightly considered together. The main objective of this study is to identify the level of implementation of SCM, CRM and IS in Bosnian Small and Medium Enterprises (SMEs) by employing a developed survey questionnaire through the employers of Bosnian SMEs. This research starts with this introduction and continues with the related literature review. The data and the methodology are presented in the third section. The descriptive results of the questionnaire are provided in the fourth section. Finally, the paper ends with the conclusion. II.

LITERATURE REVIEW

The need for long-term relationships between customers and suppliers has been suggested by the literature. According to Bullington and Bullington (2005), the literature of supply chain management suggests the marriage with customersupplier relationships. They aim to apply results of research on successful families to supply chain management in order to improve the critical business relationships. Their research, based on surveys and interviews of more than 6,000 successful families over 20 years, summarized six characteristics of successful families in order to construct the basis of a model of a successful supply chain relationship. They compared the proposed model for successful supply chain relationships with the existing literature and identified support in the literature. The model is identified to be weak explicitly in emphasizing supplier performance. The authors suggested SCR model that it provides three potential contributions to the literature on supply chain relationships including (1) detailed conceptual framework (a successful family) for customer-supplier relationships, (2) the additional element of a principles-centered relationship and (3) emphasize on appreciation or positive feedback more than previous research. Sahay (2003) reported the importance of trust in partnerships. He tries to integrate a number of different perspectives to develop a framework along with three issues: ways the term ``trust'' is used, factors leading to trusting behavior in the customer-supplier relationship, and the effect of trust on the behavior of a customer and a supplier. His work can be useful for supply chain managers to criticize their own partner relationships and manage their supply chain relationships

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by provided in-depth analysis. Sahay (2003) concludes that trust is necessary for enhancing co-operation and collaborative relationships, for long-term relationships, and for the common benefit. Cook, Heiser and Sengupta (2011) investigated the relationships between specific supply chain practices and organizational performance and whether this relationship is moderated by the company role in the supply chain. The survey data is collected from non-academic respondents within North American membership of the Institute of Supply Management. They found the moderating influence of supply chain role of company in terms of the specific supply chain practices that lead to better performance. They expect that their results can be helpful as a practical guideline for managers by considering the role-specific context of company in the supply chain before deciding on appropriate practices. Lado, Paulraj and Chen (2011) investigated the relationships among a firm’s customer focus and some interlinked aspects of supply chain management including customer service and financial performance. They develop and test an integrated model where they proposed the influence of customer focus on supply-chain relational capabilities, and therefore on performance outcomes. They collected data from over 200 US manufacturing firms and tested the model by employing SEM. They significantly identified positive relationships between (a) customer focus and supply-chain relational capabilities, (b) customer focus and customer service, (c) supply-chain relational capabilities and customer service, and (d) customer service and financial performance. They suggest supply chain partners reconfigure their supply chains to be more customer oriented and continually develop and leverage the relational competencies in order to enhance firm competitiveness in order to be effective. The authors believe that their work is successful in that it approaches the issue from multiple and complementary theoretical perspectives, including strategic management and relationship marketing in order to gain a better understanding of the nuances involved in fostering strategic collaboration among supply chain partners. Engelseth and Felzensztein (2012) explore how responsiveness in a supply network may be approached from a combined relationship marketing (RM) and supply chain management (SCM) perspectives by employing a case study of the upstream part of an integrated supply network. They suggested developing responsiveness to technically generate value through the supply network by product transformations and to know what the end-user perceives as value. As they define, SCM is useful to generate value through technical product-transforming processes and RM helps customer perceive value in the context of business relationships. They propose intertwining SCM and RM competencies to achieve responsive product supply from both end-user and multi-tier supply network perspectives. They suggest this approach as useful in both strategic planning of a company’s role in a wider supply chain setting and planning of cross-functional teamwork in operations. Fuxiang and Yuhui (2011) investigated CRM by considering Supply Chain Integration. They stated that CRM is approached from still classical perspective and needs to be considered through supply chains. They approach the customer relations management concept from integrated supply chain perspective and explore the ways of establishing perfect enterprise supply chain integration, customer relations management system and the operational mechanism. Schniederjans, Cao and Gu (2012) considered the issue from operations management perspective and analysed the adoption of customer-relations management (CRM) software. They examined the influences of operations management (OM) customer focus policies and practices, as well as software vendor capabilities in supporting OM, on ERP reasons for adoption customer relations management (CRM) systems by employing structural equation modeling (SEM). They identified that collaboration of OM and marketing managers in using CRM software enhances business performance by supporting the previous research about the closer integration of these two functional areas. They furthermore found a possible moderating effect of OM reasons for adoption of CRM on business performance. Pai and Tu (2011) investigated the influencing factors of the acceptance and use of customer relationship management (CRM) systems in a Taiwanese distribution service by proposing a research model based on unified theory of acceptance and use of technology (UTAUT) and task-technology fit (TTF) framework as well as technological and managerial theories. As a result of the study, they identified the following factors: user’s perception about the usefulness of the CRM system in doing the job; ease of use of system, profitable conditions in the environment; task related benefits, etc. It was found that if the staff feels the system is easy to use and useful for relevant business issues, the job performance is naturally enhanced. After selecting the CRM system suitable with the industry, they suggested proper job-site education and training. Hendricks, Singhal and Stratman (2007) investigate the impacts of investments in Enterprise Resource Planning (ERP),

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Supply Chain Management (SCM), and Customer Relationship Management (CRM) systems on a firm’s long-term stock price performance and profitability measures such as return on assets and return on sales by considering a sample of 186 of ERP implementations, 140 SCM implementations, and 80 CRM implementations. The results about the financial benefits of these implementations provided mixed results. For ERP systems, they observe some evidence of improvements in profitability but not in stock returns. Early ERP adopters are observed to gain stronger profitability. SCM system adopters are observed to have positive stock returns and improvements in profitability. However, for CRM, the results could not provide a clear picture whether they improved their stock returns or profitability. Daghfous and Barkhi (2009) searched about the strategic management of information technology including TQM, SCM, and CRM implementations in UAE hotels by employing a survey based study. They searched the readiness of UAE hotels for knowledge-based competition, organizational innovations, and best practices; the particular steps that hotels in our sample must follow before competing on knowledge; sufficiency of ICT infrastructure to support the implementation of best practices and qualifications of using knowledge-based CRM, SCM, and TQM; etc. They suggested more systematic planning and learning from other industries such as manufacturing and retail industries. Despite it is costly and time-consuming to develop and maintain technological infrastructures, organizations can stay competitive by enhancing their benefits from innovative information and communication technologies (ICT) in today’s dynamic business environment (Fulford and Love, 2004). Fulford and Love (2004) proposed an “alternative enterprise service application adoption model” by considering the Application Service Providers (ASP) value chain and identified the winners and risk takers within it. Their proposed model aims to reduce the risk of open-ended upgrade services by the software author by creating upgrade tools as part of the product development process.

METHODOLOGY AND DATA The data is collected by conducting a developed survey on the employees of Bosnian SMEs. Bosnian small and medium enterprises, especially companies whose business depends on wide supply chain channels are chosen as the target group for survey questions. 230 surveys have been delivered and 132 have been returned. Survey is consisted of 42 questions and a demographic part. The question part is divided in five groups of questions. After surveys received, they were entered into an excel spreadsheet and analyzed descriptively. III.

IV.

RESULTS

The respondents are surprisingly observed to be half male and half female. Majority (66%) of the respondents are found to have undergraduate or higher levels of education degrees. Most of the respondents (69.7%) are observed to be younger than 40 years old. Supply Chain Strategy The respondents are observed to have moderate agreement on the questions in this section. They slightly have a supply chain based coordination system and therefore arrange company works by considering their supply chain activities. Furthermore, the companies seem to fairly have a manager responsible from the management of company supply chain. On the other hand, there appears trustworthy environment among the chain members. The companies’ supply chains are slightly integrated with a common database and some enterprise systems (Table 1). Table 1. Supply Chain Strategy Items

Mean

Std. Deviation

My company arranges its work according to supply chain activities

4.73

1.336

My company has a coordination system through its supply chain

4.56

1.410

Our supply chain members trust each others

5.08

1.431

We behave according to the integrated overall supply chain elements

4.44

1.458

There is a person dedicated to managing our supply chain within our company

4.52

1.623

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Supply Chain Risks The companies are detected not to have any concern about supply chain related risks. However, they somehow identify their critical suppliers and associated risk information, and furthermore share the risk among them (Table 2). Table 2. Supply Chain Risks Items

Mean

Std. Deviation

My organization/business unit concerns about supply chain risks

4.03

1.359

I know who are our critical suppliers and what exposures they face for at least one product line

4.71

1.521

We are periodically collecting risk information from our critical suppliers?

4.48

1.575

Our critical suppliers are willing to partner or are partnered with us to mitigate the risk

4.59

1.528

Company Information System The respondents seem to be happy with their company information systems and report that those systems can provide basic reports and e-mail services but cannot produce advanced reports and facilitate the communication among company internal and external environment. Moreover, the staff is found to be fairly trained to use the systems. The companies are also observed to have social presences in order to market their products/services and to enhance customer/supplier collaboration (Table 3). Table 3. Company Information System Items

Mean

Std. Deviation

The employees are trained well to implement our supply chain management software.

4.33

1.433

My company information system can develop predictable sales forecasts.

4.19

1.717

My company information system can provide timely reports on field activities

4.80

1.480

My company information system can broadcast/send e-mails to targeted customer or prospects groups.

4.96

1.594

My company information system can provide stronger connection between inside and outside teams on customer opportunities and issues.

4.36

1.579

Our current program ads value to our organization

5.09

1.433

4.53

1.705

4.52

1.646

My company have an information system for our customers get to know or purchase our company’s products or services in social media I prefer to have a computerized system that enables direct collaboration between the customers and the suppliers through the use of social media

CRM System The respondents are observed to agree that companies have a weak customer database, can slightly track customers and their records and have a basic CRM system. They furthermore seem to slightly use Social media in their customer relations. They fairly admit that they are satisfied and happy with their CRM System (Table 4). Table 4. CRM System Items

Mean

Std. Deviation

My company has a single shared customer database for CRM related activities

4.67

1.566

My company CRM can easily access to e-mails and documents as part of customer records

4.77

1.629

My company CRM can develop and capture complete history of customer calls and activities

4.78

1.673

My company CRM can follow sales processes (Solution Selling, Spin Selling, Sandler, etc.)

4.73

1.544

My organisation has a computer based Customer Relationship Management (CRM) system

4.72

1.668

My organisation has also a Customer Relationship Management (CRM) system in social media

4.33

1.688

It is easy to use the CRM system

4.49

1.556

I am satisfied with our CRM system

4.58

1.672

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Customer Focus According to the respondents, it can be stated that the companies moderately provide special services/products and examine the needs of key customers. They have a weak strategy on their key customers. They seem to have, to some extent, customer related strategies (Table 5). Table 5. Customer Service Items

Mean

Std. Deviation

My organization provides customized services and products to our key customers

4.86

1.408

All people in my organization treat key customers with great care

4.86

1.418

My organization makes an effort to find out what our key customer needs

4.98

1.392

My organisation has established and monitored customers centric performance standards at all customer touch points

4.73

1.567

My organization has established clear business goals related to customer acquisition,development, retention and reactivation

5.02

1.454

Supply Chain Management Software According to the responses about Supply Chain Management Software, the subject companies are observed to be very poor in their information system infrastructure related to the supply chain activities. They have a slightly flexible software program, the program can weakly provide the results and track social network streams. Moreover, the evaluated companies can slightly afford a software program in Social Media (Table 6). Table 6. Supply Chain Management Software Items

Mean

Std. Deviation

My company information system can easily track the customers

4.83

1.549

My company information system can measure customer satisfaction and behaviour

4.70

1.472

My company information system can give the ability to coordination of the works through the departments and the customer demand

4.66

1.456

My organization provides channels to enable ongoing two-way communication with our key customers and us

4.59

1.508

We are a retailer and sell products directly to customers

4.91

1.546

Integrated systems increase customer satisfaction levels

5.07

1.499

V.

CONCLUSION

The study has been motivated by the need of research combining supply chain, customer relationship and the technological infrastructure of the companies. Moreover, since the influence of social media has been growing, as a part of technological infrastructure, it is also searched by this study. The results show the extent of customer relationship management implementation in supply chain management of SMEs in Bosnia and Herzegovina. This study revealed a slight agreement of the questionnaire in general. From the results, we derived both positive and negative conclusions about those companies. The main positive consideration is that almost all these companies and their workers recognize customer relationship as an important component for their companies. However, they are identified to have very limited set up systems. Bosnian SMEs are observed to have very weak supply chain strategies and information system infrastructure for customer relationship and supply chain activities. They are moderately considering their customers and therefore a customer centric consideration. However, they can fairly consider and detect supply chain related risks. This study is limited in that it could reach only 132 respondents, since it is hard to find companies which are expected to have such systems. The study has become successful in that it could somehow provide a general consideration about Bosnian SMEs about the questioned items. Further studies can get benefit from this study as an initial work in this area. This study is expected to be useful for especially Bosnian company managers by pointing their needs related to the issue and identifying their level when compared to global markets.

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REFERENCES [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13]

Bullington, K.E. Bullington, and S.F. (2005). Stronger supply chain relationships: learning from research on strong families. Supply Chain Management: An International Journal, 10(3), 192 – 197. Cook, L.S., Heiser, D.R. and Sengupta, K. (2011). The moderating effect of supply chain role on the relationship between supply chain practices and performance: An empirical analysis. International Journal of Physical Distribution & Logistics Management, 41(2), 104 – 134. Daghfous, A. and Barkhi, R. (2009). The strategic management of information technology in UAE hotels: An exploratory study of TQM, SCM, and CRM implementations. Technovation, 29, 588–595. de Búrca, S., Fynes, B. and Marshall, D. (2005). Strategic technology adoption: extending ERP across the supply chain. Journal of Enterprise Information Management, 18(4), 427 – 440. Engelseth, P. and Felzensztein, C. (2012). Intertwining relationship marketing with supply chain management through Alderson's transvection. Journal of Business & Industrial Marketing, 27(8), 673 – 685. Fulford, R. and Love, P.E.D. (2004). Propagation of an alternative enterprise service application adoption model. Industrial Management & Data Systems, 104(6), 450 – 456. Fuxiang, L. and Yuhui, Y. (2011). Study and Explores on CRM Based on the Supply Chain Integration. Management Science and Engineering, 5(1), 01-09. Hendricks, K.B., Singhal, V.R. and Stratman, J.K. (2007). The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations. Journal of Operations Management, 25, 65–82. Lado, A.A., Paulraj, A. and Chen, I.J. (2011). Customer focus, supply-chain relational capabilities and performance: Evidence from US manufacturing industries. The International Journal of Logistics Management, 22(2), 202 – 221. Mitussis, D., O'Malley, L. and Patterson, M. (2006). Mapping the re-engagement of CRM with relationship marketing. European Journal of Marketing, 40(5), 572 – 589. Pai, J-C. and Tu, F-M. (2011). The acceptance and use of customer relationship management (CRM) systems: An empirical study of distribution service industry in Taiwan. Expert Systems with Applications, 38, 579–584. Sahay, B.S. (2003). Understanding trust in supply chain relationships. Industrial Management & Data Systems, 103(8), 553 – 563. Schniederjans, M.J., Cao, Q. and Gu, V.C. (2012). An operations management perspective on adopting customer-relations management (CRM) software. International Journal of Production Research, 50(4), 3974-3987.

Appendix Demographics a

Your department/unit:

b

Your current position/role in dept/unit:

c

How long have you been in current position/role?:

d

Your highest education level:

e f

Doctorate

Gender: Age:

≤30

Master

Male 31-40

Undergraduate

Other______

Female 41-50

51-60

≥61

A

Integrated Supply Chain

Agreement Level

a

My company arranges its work according to supply chain activities

1 2 3 4 5 6 7

b

My company has a coordination system through its supply chain

1 2 3 4 5 6 7

c

Our supply chain members trust each others

1 2 3 4 5 6 7

d

We behave according to the integrated overall supply chain elements

1 2 3 4 5 6 7

e

There is a person dedicated to managing our supply chain within our company

1 2 3 4 5 6 7

f

Our organization's databases are compatible with different members of the supply chain

1 2 3 4 5 6 7

g

Our company’s various enterprise systems in terms of business processes are very much integrated through the overall supply chain

1 2 3 4 5 6 7

B

Supply Chain Risks

Agreement Level

a

I know who are our critical suppliers and what exposures they face for at least one product line

1 2 3 4 5 6 7

b

My organization/business unit concerns about supply chain risks

1 2 3 4 5 6 7

c

We are periodically collecting risk information from our critical suppliers?

1 2 3 4 5 6 7

d

Our critical suppliers are willing to partner or are partnered with us to mitigate the risk

1 2 3 4 5 6 7

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C

Company Information System

Agreement Level

a

The employees are trained well to implement our supply chain management software.

1 2 3 4 5 6 7

b

My company information system can develop predictable sales forecasts.

1 2 3 4 5 6 7

c

My company information system can provide timely reports on field activities

1 2 3 4 5 6 7

d e f g h

D

My company information system can broadcast/send e-mails to targeted customer or prospects groups. My company information system can provide stronger connection between inside and outside teams on customer opportunities and issues. Our current program ads value to our organization My company have an information system for our customers get to know or purchase our company’s products or services in social media I prefer to have a computerized system that enables direct collaboration between the customers and the suppliers through the use of social media

1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7

CRM System

Agreement Level

a

My company has a single shared customer database for CRM related activities

1 2 3 4 5 6 7

b

My company CRM can easily access to e-mails and documents as part of customer records

1 2 3 4 5 6 7

c

My company CRM can develop and capture complete history of customer calls and activities

1 2 3 4 5 6 7

d

My company CRM can follow sales processes (Solution Selling, Spin Selling, Sandler, etc.)

1 2 3 4 5 6 7

e

My organisation has a computer based Customer Relationship Management (CRM) system

1 2 3 4 5 6 7

f

My organisation has also a Customer Relationship Management (CRM) system in social media

1 2 3 4 5 6 7

g

It is easy to use the CRM system

1 2 3 4 5 6 7

h

I am satisfied with our CRM system

1 2 3 4 5 6 7

E

Customer Focus

Agreement Level

a

My organization provides customized services and products to our key customers

1 2 3 4 5 6 7

b

All people in my organization treat key customers with great care

1 2 3 4 5 6 7

My organization makes an effort to find out the key customer needs

1 2 3 4 5 6 7

c d e

F a b c d

My organisation has established and monitored customers centric performance standards at all customer touch points My organization has established clear business goals related to customer acquisition, development, retention and reactivation

Supply Chain Management Software Our supply chain management software is very flexible to promote gradual change in our organization Our supply chain management software can deliver the results expected or promised by the company My company can afford the budget related to a new supply chain management program in social media My company information system can track social networking streams in our CRM program.

132

1 2 3 4 5 6 7 1 2 3 4 5 6 7

Agreement Level 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7