„

ARAB ACADEMY FOR SCIENCE, TECHNOLOGY

AND MARITIME TRANSPORT

College of Computing and Information Technology

Department of Information Systems

Enhancing Customer Relationship

Management system Effectiveness Using

Balanced Scorecard Model

For a Telecommunication Organization

By Rehab Mohamed Hussein Salman

A thesis submitted to AASTMT in partial

Fulfillment of the requirements for the award of the degree of

MASTER of Science in Information Systems

Supervised By

Prof. Dr. Mostafa Abd El-Azim Essam El-Din Fawzy El-Fakharany, PhD.

Prof. of computer science

College of Computing and Information Technology

AASTMT

College of Management and Technology-

AASTMT

Mohamed Bakr Abdelhalim, PhD.

College of Computing and Information Technology AASTMT

2012

II

Acknowledgements

I want to express my deepest gratitude for my professors and

thesis supervisors Dr. Essam EL-Fakharany, Prof. Dr.

Mostafa Abd El-Azim and Dr. Mohamed Bakr for their major

help and support through all the phases of research and

development.

Special Dedication

I dedicate this dissertation to Prof. Dr. Mohamed Quota who

passed away few months before submitting this thesis, Even

though he is not here today to share my happiness and

success. I am sure he is happier in a better place.

III

بسم هللا الرحمه الرحيم

وقل اعملوا فسيرى هللاه "

"عملكم ورسوله والمؤمنون

صدق هللا

العظيم [٥٠١: التوبة]

IV

Published Work:

The work in the thesis is published as follows:

1. R.Salman, E.el-Fakharany, the Evaluation of CRM In

Telecommunication company Using Balanced Scorecard, The

Journal of AL Azhar University, Engineering sector, JAUES,

ISSN: 1110-6409, 2011.

V

Abstract

In this research we study and implement an evaluation model of Balanced

ScoreCard (BSC) which has an iterative process that assesses the effectiveness of

CRM. This model evaluates the CRM effectiveness through a framework of

measurements. The first step in this framework is to determine the CRM mission and

goal in the organization, then establish a CRM strategy and figure out the principle

strategic factors. Based on the completion of the previous steps, find the

interrelationships among CRM activities and business goals within the organization,

and analyzing these relationships by cause and effect relationship analysis to achieve

better outcomes and select the most efficient business perspectives in order to

achieve the targeted goals and objectives of the organization.

Based on the evaluation analysis of the actual success results versus the

business targets will help the organization in enhancing the effectiveness of CRM.

In this thesis, we used a BSC model that is measuring the effectiveness of

CRM through four perspectives, customer knowledge (CK), customer interaction

(CI), customer value (CV), and customer satisfaction (CS) and each one of these

perspectives consists of a number of appropriate metrics, which should be adapted to

suit organizations in different industries.

We applied this model to enhance the CRM system in a Telecommunication

Company. In 2010, X-Telecom moved from traditional CRM evaluation models to

BSC evaluation model that is described earlier. Accordingly, we ran this research to

evaluate the effectiveness of the new BSC model, through comparing the Key

Performance Indicators (KPIs) results of year 2011 with the year before, in order to

measure the impact of new enhancements on X telecom‘s CRM system using the

new BSC model.

The measures were selected according to the X-Telecom business goals and

objectives. And it was evaluated through expert interviews, financial reports, and

customer feedback questionnaires that will described later.

After applying the BSC model and assuming to give the four BSC

perspectives an equal weight of 25% of the total measurement, and comparing the

VI

targets and outcomes of Period 1 year (2009- 2010) and Period 2 of year (2010-

2011), we can conclude that using the Balanced Scorecard has helped the company

to achieve an increase of 8% in the Customer knowledge, 13% in Customer Value,

11% in customer interaction and 10% in customer satisfaction.

Moreover, we set other measures to separate the perpetual normal growth

percentage from the total growth of the four BSC perspectives in order to assess the

standalone impact of using the BSC, which resulted as 5.3% increase in customer

knowledge, 2.7% increase in customer interaction, 9.3% increase in customer value

and 8% increase in customer satisfaction. Based on our model, we proved that BSC

can enhance CRM system to evaluate the effectiveness of CRM in the organization.

VII

TABLE OF CONTENTS

Abstract .................................................................................................................................... V

LIST OF FIGURES ....................................................................................................................... X

LIST OF TABLES ....................................................................................................................... XII

List of Abbreviations ............................................................................................................. XIII

Chapter One: Introduction

1.1 Overview ........................................................................................................................ - 1 -

1.2 Motivations .................................................................................................................... - 2 -

1.3 Problem Definition ......................................................................................................... - 2 -

1.4 Research Objectives ....................................................................................................... - 2 -

1.5 Research Methodology .................................................................................................. - 3 -

1.6 Thesis Contribution ........................................................................................................ - 3 -

1.7 Thesis Organization ........................................................................................................ - 4 -

Chapter Two: Customer Relationship Management

2.1 Customer Relationship Management (CRM) Definitions ............................................... - 6 -

2.2 CRM Architecture ........................................................................................................... - 7 -

2.2.1 Information Technology Perspective. ......................................................................... - 7 -

2.2.2 Customer Life Cycle ‘CLC’ Perspective ........................................................................ - 9 -

2.2.3 Business Strategy Perspective .................................................................................... - 9 -

2.3 CRM Elements .............................................................................................................. - 11 -

2.4 Characteristics of CRM ................................................................................................. - 11 -

2.5 Goals of CRM ................................................................................................................ - 12 -

2.6 Customer Information Architecture in CRM ................................................................ - 14 -

2.7 CRM Types.................................................................................................................... - 15 -

2.7.1 Operational CRM ....................................................................................................... - 15 -

2.7.2 Analytical CRM .......................................................................................................... - 15 -

2.7.3 Sales Intelligence CRM .............................................................................................. - 16 -

2.7.4 Collaborative CRM .................................................................................................... - 16 -

2.8 CRM Strategy ............................................................................................................... - 18 -

Chapter Three: Applications of CRM in Telecommunication Sector

3.1 Telecommunication sector .......................................................................................... - 21 -

3.2 Contact Center ............................................................................................................. - 22 -

3.3 Contact Center Elements ............................................................................................. - 23 -

VIII

3.4 Contact Center Structure ............................................................................................. - 24 -

3.5 Integrated CRM with contact center system ............................................................... - 27 -

3.6 Telecommunication CRM Applications ........................................................................ - 28 -

3.6.1 CRM Applications and Business Interactions ............................................................ - 28 -

3.6.2 Siebel CRM Applications ........................................................................................... - 29 -

3.6.3 SAP CRM .................................................................................................................... - 30 -

3.6.4 SalesForce CRM application ...................................................................................... - 30 -

3.6.5 CRM Application Survey ............................................................................................ - 31 -

3.7 Loyalty management in CRM ....................................................................................... - 32 -

3.8 How to build customer loyalty in Telecommunication ................................................ - 33 -

3.9 Customer Satisfaction .................................................................................................. - 35 -

Chapter Four: CRM Frameworks Literature Review

4.1 CRM measurement ...................................................................................................... - 38 -

4.2 The Measurement Orientations .................................................................................. - 40 -

4.2.1 Measurement Relation with Time ............................................................................ - 41 -

4.3 CRM Success Metrics ................................................................................................... - 42 -

4.3.1 Productivity metrics .................................................................................................. - 44 -

4.3.2 Operational metrics .................................................................................................. - 44 -

4.3.3 Resulting metrics ....................................................................................................... - 45 -

4.4 CRM Measurements Methods ..................................................................................... - 45 -

Chapter Five: Balanced Scorecard Model

5.1 Balanced Scorecard ...................................................................................................... - 51 -

5.2 Literature Review of BSC .............................................................................................. - 51 -

5.3 Why the Balanced ScoreCard ....................................................................................... - 53 -

5.4 Success stories of BSC .................................................................................................. - 56 -

5.5 BSC Design .................................................................................................................... - 63 -

5.5.1 Customer Centric Balanced Scorecard ...................................................................... - 65 -

5.6 BSC Model .................................................................................................................... - 66 -

5.6.1 Cause-and-Effect Relationship .................................................................................. - 66 -

5.6.2 Model perspectives ................................................................................................... - 68 -

Chapter Six: BSC Implementation and Analysis

6.1 BSC in Telecommunication Company .......................................................................... - 76 -

6.2 First year Analysis .................................................................................................. - 78 -

IX

6.3 Implementation of BSC model on X-Telecom .............................................................. - 80 -

6.3.1 X-Telecom CRM Goals ............................................................................................... - 80 -

6.3.2 X-Telecom Strategy Map ........................................................................................... - 80 -

6.3.3 Cause and Effect Relation Model .............................................................................. - 82 -

6.3.4 Measurement Selection ............................................................................................ - 82 -

6.4 Result analysis after BSC Model ................................................................................... - 84 -

6.4.1 Questionnaire analysis .............................................................................................. - 85 -

6.4.2 Interview Analysis ..................................................................................................... - 87 -

Chapter Seven: BSC Results

7.1 The Evaluation of X-Telecom BSC Model ..................................................................... - 93 -

7.2 Comparing Results ....................................................................................................... - 95 -

7.3 The Impact of BSC on Total Growth ............................................................................. - 98 -

Chapter Eight: Conclusions, Recommendations and Future Work

Chapter Eight: Conclusions, Recommendations and Future Work ................................ - 102 -

8.1 Conclusions ................................................................................................................ - 102 -

8.2 Recommendations ..................................................................................................... - 104 -

8.2.1 Objectives of “Recommend the Best” program ..................................................... - 104 -

8.2.2 Program Facts ......................................................................................................... - 105 -

8.2.3 The Benefits of the Program: .................................................................................. - 105 -

8.3 Limitations and Future Work ..................................................................................... - 105 -

References .................................................................................................................. - 107 -

Appendix ........................................................................................................... -116-

X

LIST OF FIGURES

Figure NO Caption Page

1.1 Research Methodology 3

2.1 Relationships Between IT And CRM 7

2.2 The Industry Data And Information With, Marketing And

Customer Support

8

2.3 Customer Life Cycles ‗CLC‘ 9

2.4 CRM Marketing Teacher Model And Business Strategy 10

2.5 Key Elements Of CRM Architecture 10

2.6 CONVIO Approach For E-CRM 18

3.1 Static SBR Example

25

3.2 Dynamic SBR Example

25

3.3 Handle Calls Machine 26

3.4 Loyalty Management In CRM

32

4.1 The Measurement Orientations 40

4.2 Measurement Related To Time 41

4.3 Human Capital Intelligence Systems 46

4.4 Strategic Workforce Intelligence Framework 47

4.5 Lev Value Chain Scoreboard Model 48

XI

5.1 Regional Airline Balanced Scorecard 62

5.2 Generic Government Strategy Map 63

5.3 BSC Design as Norton and Kaplan 64

5.4 Company Centric Vs. Customer Centric BSC

65

5.5 BSC Evaluation Model 66

5.6 Cause-And-Effect Relationships 67

5.7 BSC Model Perspectives 68

6.1 X-Telecom Organization Chart 77

6.2 Evaluation To Target Before BSC For 2009-2010 79

6.3 X-Telecom Strategy Map 81

6.4 Cause and Effect Relationship Model

82

6.5 Questionnaire Results 87

6.6 Evaluation to Target Results after BSC 91

7.1 Evaluation Results of CK 95

7.2 Evaluation Results of CI 96

7.3 Evaluation Results of CV 97

7.4 Evaluation Results of CS 97

7.5 Comparing Two Years Results 98

7.6 BSC Impact On Total Growth 100

7.7 The Combination Results 100

XII

LIST OF TABLES

Table No Caption Page

3.1 Top CRM Vendors Comparison 31

5.1 Customer Knowledge Measures 70

5.2 Customer Interaction Measures 71

5.3 Customer Value Measures 72

5.4 Customer Satisfaction Measures 74

7.1 Evaluation Of BSC Model 93

XIII

List of Abbreviations

Symbols Nomenclatures

ACD Automatic Call Distribution

ACW After Call Work

APIs Application Programming Interfaces

ARPU Average Revenue Per User

BSC Balanced ScoreCard

BSP Business Strategy Perspective

CBA Cost Benefit Analysis

CCC Call Center Contact

CI Customer Interaction

CIA Customer Information Architecture

CK Customer Knowledge

CLC Customer Life Cycle

CRM Customer Relationship Management

CS Customer Satisfaction

CTI Computer Telephony Integration

CV Customer Value

XIV

CVM Customer Value Management

DBMS Database Management System

DFAS Defense Financial Accounting Service

DM Data Mining

EBU Enterprise Business Unit

EVA Economic Added Value

GCRM Geographic Customer Relationship Management

GUI Graphical User Interface

HCI Human capital Intelligence system

IVR Interactive Voice Response

KPIs Key Performance Indicators

LANs Local Area Networks

PLC Product Life Cycle

ROM Return On Management

SBR Skill Based Routing

SFA Sales force Automation

SME Small-Medium Enterprise

SOHO Small Office / Home Office

WWW World Wide Web