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Keywords Information systems, Transaction costs, Organizational design, Teams, E-commerce
Abstract In 1998 JP. Morgan's analysts forecast that the market for e-CRM (customer relationship management) solutions would grow rapidly. Since then more than 700 e-CRM firms have emerged. The convergence of information technologies caused enterprise information systems providers to add e-CRM functionality to their systems, thus further increasing the number of e-CRM suppliers. The proliferation of e-CRM concepts, models and technologies causes significant confusion and uncertainty. Corporate executives question the economic benefits of investing in multimillion dollar e-CRM projects, ponder about the right business and organizational models for e-CRM, and are uncertain which e-CRM models and technologies will prove both profitable and sustainable over time. With so many failed e-CRM initiatives some executives wonder whether e-CRM is not simply a hype. In the present paper what e-CRM is, from where the economic benefits from investing in e-CRM derive, and the evolution of alternative e-CRM models are elaborated. It is also argued that successful e-CRM projects are not narrowly departmental, but instead organization-wide initiatives. The paper presents a conceptual framework for e-CRM organizational architecture. The findings in the paper are based on e-CRM industry analysis, evaluation and work experience with over 50 e-CRM vendors, and on consulting experience with numerous corporations.
Introduction
What is the best business organization from a customer point of view? This is the question that executives should ask themselves when embarking on customer relationship management (CRM) projects. Yet, it is rarely asked, because CRM is considered a matter of service rather than of organizational design. The managerial conception of business organization derives from the dichotomy between centralized and decentralized organizations (Coase, 1988; Chandler and Daems, 1980). It reflects the degree to which decision making is distributed among the members or employees of an organization. The distribution of decision making implies the existence of organizational layers in hierarchical organizations and of independent functional units in decentralized organizations. From an economic perspective, this segmentation of the firm facilitates specialization in function, known also as division of labor (Smith, 1963), which increases productivity. From a management point of view, it facilitates coordination (Casson, 1987) and delineates employees' responsibilities and contributions in the production process (Alchian and Demsetz, 1972).
However, the economic and management perspectives...