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ASSIGNED BY PROF. TAHIR ASHFAQ
PRESENTED BY:
FARRUKH SOHAIL
MUHAMMAD OBAIDSADIA BAWERMARIAM AUJL A
M. PH IL BUSINESS ADMINISTRAT IONNATIONAL UNIVERSITY OF MODERN L ANGUAGES
Appraisal of CRM Practices of Eden Group
If You Want To Be the Master of the Game
You Should Know All the Rules of the Game
Appraising CRM Practices of Eden Group in 2010 – A Trend Setter and Role Model in Construction Industry
Abstract
This article measures the effects of adoption of CRM tools on productivity, procedures and growth of Eden Group – a renowned construction company of Pakistan. CRM and ECRM tools adoption is related to the use of Management Information Systems by the Group.
We have reported as accurately and objectively as possible how Eden shifted from Marketing to CRM techniques and recommended that how Eden can move towards e-CRM tools and we described the problems faced during its implementation.
We’ll observe
Impact of CRM on Sales Process and Marketing Strategies
Impact of CRM on Departments and their efficiencies
Improvements after CRM ImplementationHindrances faced in Implementation of IT based
CRMPersonalized Marketing and Sophistication of
Procedures Changes in Organizational StrategiesChange ManagementFinancial gains and Cost Effects
Objectives
To evaluate real application of CRM policies and practices observed at Eden Group. We will find out how effectively its departments are Managing Customer Relationships and which tools are being used.
To assess advantages achieved after application of CRM policies and procedures. We will compare Eden Group CRM policies with benchmark companies and define competitive edge over other groups.
To identify areas of improvements and to point out loop holes in CRM strategy of Eden Group. We will recommend measures and tools to remove deficiencies and gaps to establish e-CRM department and its policies and procedures.
Reason to Choose Construction Industry
Although the evolution of construction industry is associated with the human evolution yet we see that professional Real Estate and Construction Industry has just entered into new era of corporate culture. There are gaps and lack of confidence between customers and professionals dealing with Real Estate due to our socio-culture reasons. Keeping in view the hurdles faced by Construction Industry, we will try to apply modern techniques of CRM keeping in view “Personalized Housing” to fill in these gaps.
Company Profile
The company has been engaged in construction of affordable housing projects, commercial buildings and land development.
Focus of company has remained on residential house & providing business contemporary commercial buildings.
Eden Group was founded in 1980 by Muhammad Arshad. Mr. Arshad invested Rs. 1,000,000 in the construction of 2
houses. In 1985 his brother joined to act as Director Marketing Eden dominated two product categories: High Rise and
Living Units. They were valued in 1980 at Rs. 1.5 Million which rose to Rs.
3,500 million till the end of 1999. By 2002 Eden had introduced more than 17 projects on 8
different locations of the city. They supported 57 related industries.
2002, 16 employees were selling the Eden’s Houses .
Building Eden Group
“Advantage Eden Builders has over other builders is architectural expertise and marketing techniques I bring to the projects and to the individual units we offer to our customers.” explains Arshad.
The goal of the company is to provide top-quality services and housing and commercial units while creating structures with distinction.
CEO is very much dedicated person who initially formed D-Group and which later developed into renowned construction giant Eden Developers.
They were valued in 1980 at Rs. 1.5 Million which rose to Rs. 15 billion till the end of 2009.
CRM Strategy of Eden From Incorporation to Customization
CRM Processes should comprise a small set with critical tasks
CRM Processes should contribute to value creation process to satisfy the needs of the customer at a lower cost or higher benefit
CRM Processes should be aligned CRM & corporate strategy
CRM Processes need to display clear interrelationshipsBuilding up trust to increase reliability on Eden’s ability
to serve Indentify Customers and Development of Customer Data
Base The customer is a new business partnerCRM is expected to fill up the gaps due to uncertainty Increased transactions to a higher degree of commitmentCreating mutual importance within Internal and External
Customers
From 1980 to 1991 they were manual in Marketing, Sales, Media, Accounts, Finance, Administration, Construction Management and Architectural Works.
Software was developed in 1991 through which paved the path for computerized environment & in 1992 tried to start initial working on inventory but collapsed.
Customer database was established through Sales Officers, Marketing Officers, Receptionists and Client Service Representative.
Questionnaires placed at reception where clients has to come for information. The data helped in assessing CRM channels.
Challenges Eden Faced
Globalization
Challenges to Eden were identified as Global Market, Quality Products, Competitiveness, and Automation.
Eden bought Structural Reforms, Specialized Work Force, Research & Development and Promotion of Core Products.
Diversity
Inequity, Grievance, Cultures and Corporate Culture were challenges to Eden.
Eden focused on Employees Stability, modified Work Processes, Reduce Costs, Grievance Interviews, Performance Rewards.
Information Technology
To manage Disruptive Change, New Skill for Employees, Automated Decision, Process, Speed & Accuracy, Training Cost, and Data Security.
Eden worked on specialization, Skills, Automated Equipments, Focus on Customers, Quality and employees Training & Development.”
Total Quality Management
To manage Competition, Demand of Quality Products at Competitive Price, Growth & Profitability and Customer Satisfaction.
Eden focused on customer, Continuous Improvement, Accurate Measurement, Empowerment of Employees, Team Work and Feedback on Performance.
Ethics
Discrimination & Reward, Career Management, Succession, and Whistle Blowing are the factors.
Eden distributed Standards Codes of Ethics, conducted Seminars, Workshops & Training Programs to Improve Ethical Behaviors, announced Performance based Reward, Career Development programs etc.
Grading
A PE2 grading has been maintained for Eden,
indicating strong project execution capacity.
Early Years Growth – A Sale View Projects 1980-97
Project Year Units Location
Race View Villas 1983 18 Race Course
Gulberg Homes 1984 14 Maratib Ali Road
Eden Homes 1986 16 Jail Road
Liberty Homes 1987 12 Liberty
Green View Homes 1989 10 Liberty
Eden Villas 1990 14 Model Town
Eden Cottages I 1992 30 DHA Lahore
Eden Cottages II 1992 15 DHA Lahore
Eden Park 1992 20-Farms Raiwand Road
Eden Centre 1992 200 Jail Road
Eden Heights 1997 130 Jail Road
Total Units 479
Separation – Differentiating Eden Group from Eden Housing
At this stage due to difference of opinion and performance attitudes
both partners decided to dissolve Eden Developers. Said dissolution gave birth to “Eden Group” owned by Muhammad
Arshad.
Eden’s CRM Model A Reason to be on Top
Data Collection
Data are collected through Accounts, HR, Sales and Marketing departments. The data can be directly added into database for further analysis.
Data Analysis
Main characteristics of employees, suppliers and customers profiles Grade-vise employees, product-vise suppliers and customers Most preferred unit by customers
Information Application
On the basis of information, Eden can set targets better as ever, as an example:
Customer segmentation: to segment the customers on similarity
Customer acquisition: to identify and attract customers Cross-selling: to offer customers new products
matching their needs
CRM Executive Team
Defining a New Trend for Construction
From 2000 to 2008 Eden spent Rs. 15 million to establish CRM department. Its process starts from:
Land Acquisitions & Town Planning Architectural Drawing Works Project Planning & Purchase Orders Materials and Inventory Management Quality and Quantity Issues Accounts and Finance procedures Resource Mobilization & Human Resources - Recruitment to Exit
Interviews Print and Electronic Media Planning CRM and e-CRM Solutions & Client Database Allotment of Houses and Online Booking Payment and Receipts Management Project and House Handing
Journey from Marketing to CRM to ECRM
Customized and personalized reporting, front office and back office integrations, feedback and feed forward, IT based customer services centers providing personalized services project vise and unit vise.
Eden developed in house IT Team in 2004 and started working on the idea “If we have information we have solutions”.
Back Office Function Front office FunctionsDesign, Plan and Development MarketingLand Development and Construction SalesProduct Quality Customer Service
Product Support
Projects from 1998 to 2010
Projects Year Units Location
Eden Avenue 1999 200 Defence Road
Eden City 2002 2302 DHA
Eden Avenue Ex. 2002 240 Defence Road
Eden Defence Villas 2002 170 DHA Lahore
Eden Towers 2003 06 St Main Gulberg
Eden Canal Villas 2005 352 Thokar Niazbeg
Life Style Homes 2010 2000 Raiwand Road
Eden Value Homes 2010 1200 ultan Road
Eden Point 2010 800 Bedian Road
Total Units 8118 Units
Project Planning
Project planning at Eden is very comprehensive and analytical.
Eden has a complete in-house technical manpower infrastructure, including qualified engineers with different disciplines and specializations.
Company has developed its in-house computerized land record of its projects. Primavera a project planner is being used for Project Management and Planning.
Yearly Growth Marketing, CRM and e-CRM
Strategic Phases Periods Annual Budget
What is marketing! 1980-----1985 0
Somebody told me about Marketing ! 1985-----1990 50,000
Marketing we need …is it workable! 1991-----1997 800,000
Adopt Marketing tools to succeed 1998-----2006 3,000,000
Go for CRM, SOP & IT 2007-----2009 4,500,000
Prepare your team for e-CRM 2010-----2011 6,700,000
Yearly Growth Chart – IT
Strategic Phases Periods Budget (Rs)
IT…! …What is it…? 1980-----1985 0
Somebody told me about IT….! 1985-----1990 50,000
IT is ok we need this…is it secure! 1990-----1998 750,000
Implement IT, SOP, make sure excess 1998-----2005 1,100,000
Go Connect and Globalize 2005-----2009 2,700,000
Should do more than CRM, SOP & IT 2010-----2011 3,500,000
Yearly IT Equipment Growth
IT Equip 1980-85 1985-90 1990-98 1998-05 2005-09 2010-11
Laptops 0 0 0 0 1 21
PCs 0 1 8 44 67 91
Printers 0 1 2 8 14 19
Internet 0 0 3 6 67 112
Four Steps to Adopt CRM Model
Director Hammad. Arshad elaborates his proposed CRM Model and says:
First, we prepared our-self for a challenge.
Second, we were in a hurry, if someone wants to achieve market differentiation.
Third, we kept alignment our marketing and CRM strategies
Four, Eden acquired talent. “It’s not about a concept or a strategy. It’s not about the best platform
Financial Performance
Amounts in Million
Jun-05 June 2007 Jun-09
Operating Profit 245.8 326.27 433.58
Net Income 61.5 34.19 44.47
Total Assets 7,155.80 6,832.20 7,242.13
Equity 2,274.50 2,309.00 2,389.86
Debts 2,106.18 2,466.00 1,959.69
Total Debt/Equity (%) 92.60% 106.80% 82.00%
Evaluating Using 5 Point Likert ScaleEffect of CRM adoption on Customers – 16 Nos
56% respondents expressed Satisfaction with Eden Products and were positively inclined to do business with Eden Group.
28.5% Customers said that Eden is charging higher prices
77% respondents showed Satisfaction with Eden’s CRM Practices
Eden to improve CRM to tap over 20% not satisfied customers
91% customers are of the opinion that CRM practices are of prime important in customer satisfaction.
44% customers were either not aware of e-CRM concept
56% customers showed Satisfaction with e-CRM practices
Evaluating Using 5 Point Likert Scale Effect of CRM adoption on Employees – 18 Nos.
74% respondents were of the opinion that CRM polices significantly help improve not only internal procedures but leads to satisfied and motivated internal customers
26% of the respondents highlighted the need for awareness / training of the employees regarding CRM polices & practices of their company.
69% respondents positively supported that CRM policies adopted by Eden have a significant effect on its Growth
23% was silent, leading us to conclude that employees need more awareness regarding CRM policies
Defence Housing Authority CRM Policy
DHA works in partnership with suppliers and customers both in consumer and business to business markets.
Maximizing customer value is the goal of DHA. Managing and enhancing the value to both customer and DHA within the relationship.
The focus on satisfaction received a relatively low level
of mentions, yet this is the most popular customer measure DHA adopts.
Bahria Town CRM Policy
Bahria Town seeks partnerships with employees, suppliers, customers to build a longer relationship developed into loyalty.
We maximize customer value through creating effect of personalization, interactions and relationship. For this we managed database for CRM.
Our focus is on the ultimate customer but we need satisfied suppliers and employees ALSO. Our CRM team should be satisfied to satisfy the clients.
Comparison with Bench Mark Companies
Variables DHA Bahria Town Eden Group
Technology General Advance Advance
Average Sales Rs. 8,000,000 Rs. 3,500,000 2,900,000
Customer Classification Rich Class Up Middle, Upper Middle, Up Middle, Upper
Product Classification Executive Budget & Executive Budget, Executive, Luxury
CRM Staff 38 – 5 Cities 29 – 2 Cities 16 – 2 cities
CRM Budget 2009-10 Rs. 1,800,000 Rs. 2,500,000 Rs. 6,700,000
IT Budget Rs. 1,000,000 Rs. 1,600,000 Rs. 3,500,000
Minimum Price Rs. 3,700,000 Rs. 2,000,000 Rs. 1,000,000
Maximum Price Rs. 15,000,000 Rs. 8,500,000 Rs. 10,000,000
Completion Period Un-Identified 4 to 6 years 3.5 years
CRM and Employees Compensation
Designation
Salary (Rs.)
1980 - 89 1990 - 99 2000-09 Year 2010
Managers 10,000 30,000 45,000 85,000
Executives 8,000 17,000 25,000 38,000
Officers 6,000 11,000 14,000 19,000
Workers 2,000 5,000 8,000 10,500
Recommendations - Characteristics of e-CRM A Proposed Neural Network
Neural Network Model improve efficiency in CRM, Procurement, Accounts procedures, Project Management and HR etc.
The objective of the organization seems to develop a simple MIS analytical system, which uses Neural Network as a model.
The ultimate system would also be able to classify online customers and predict their purchasing behavior, to help further e-marketing campaigns of Eden.
The electronic extension of departments come into birth, so called e-CRM for Eden that will help to boost revenue and strengthen relationships with customers.
Neural Network is a widely used data mining technique and is among the most powerful general nonlinear modeling techniques available.
Main Features of Eden’s New e-CRM Model
E-CRMTrack by Project Share Information Key Client Management Knowledge Management Proposal Management Project Portals Marketing Campaign
management Manage RFI & Client Issues Email & Letter
CommunicationsUtilize Existing Client Information
Comprehensive Reporting
Main Features of Eden’s New e-CRM Model
HRIS
Track by Employee Track by designations Key Performance Parameters Education, Skills and Certification Payroll Management Track by Department Increment and Confirmation Comprehensive Reporting Tests, Training and Development Compensation and Benefits Survey
Main Features of Eden’s New e-CRM Model
Inventory
Material Planning Material Tracking item-vise Identification of Suppliers Product ViseRate ComparisonPO Approval Inwards and Outwards Inventory Data up-datingMaterial Issued to Project or JobConsumption Report
From Customization to Personalization Effect
Selling effectively requires personalization with customers.
Eden not only differentiates their clients but also foster partnerships that are relevant to their practices and deliver value.
CRM head at Eden; “We don’t want to have a customer-centric organization,” says Arshad, CEO of the Group. “What the customer wants and needs we want to put at the beginning of every strategy we are elaborating.”
Eden’s New Way to Analyze Internal Customer
There are 9 IT-supported HR applications contain 78 sub-applications:
HR audits and surveysEmployee benefitsCompensation and rewardsHealth and safetyPerformance management HR planning and career developmentStaffingTraining and developmentEmployee relations
Procurement and Inventory Management Model
Eden’s New CRM Pyramid
Collaboration - A 360-degree view of customers
“Eden needs to better collaborate with their customers by sharing information and building trust”, says CEO Arshad.
All sales members carry Blackberries to facilitate flow of information. “If you want to impact your customer, you need all the information for your customer”.
The Marketing Executives involved, the last time they engaged with a client, how many times they were visited, the products they’re dealing with, and the services they’re delivering to.
Eden’s New CRM Pyramid
Added value The second dimension of Eden’s new CRM pyramid is
added value. Eden makes the customer’s experience more
personalized and convinces them that their product provides the value to the customers.
Hammad Director of Eden says “We are not pushing a
product. We let our clients choose what they want to learn about Eden.”
Eden’s New CRM Pyramid
Customer Management
Eden wants to achieve higher personalization, and higher personalization means higher complexity.
To manage this complexity, Eden first moved from classic segmentation to adoption curves to achieve better differentiation.
Adoption curves “are much more elaborated, but if you look at the segmentation, we’re still looking for the Eden interest, the industry interest,” says CEO. “I’m interested in the speed of adoption, but I ALWAYS SEE, does that really mean something for our customer!”
Hindrances in Implementing e-CRM Practices
CEO’s own fear theoriesFire Walls between departments although IT minimized itMarketing team faced troubles in establishing data baseThe employees were not literate to carry on CRM
activitiescustomer was not ready to adopt the changeUnrealistic expectations from Market and CustomersProduct Centric Approach rather than Customer CentricTrends and socio-economic culture in Real EstateQuick shift in business strategy created difficulties for
Marketing and CRM team.
Future Research Prospects
Eden is a very large construction group, the management of which has its own fear theories.
These fears restricted researchers also to access other database which is very sensitive in nature for the group.
Employees were shy and hesitated to provide us the required information.
The management of Group was reluctant to provide strategic information and figures.
The customer’s data base we have taken in this research was through physical efforts.
Procedures and process were gathered after detailed interview of MIS Manager.
Compliments
Researchers are very thankful to following honourable professionals:
Prof. Tahir Ashfaq – CRMM. Arshad CEO Eden Group Hammad Arshad DPD EdenMuhammad Azam Manager MISM. Farooq Manager HR Eden
References
Eden Group, www.eden.pk Hammad Arshad
Director MIS and Planning & Development Judith W. Kincaid
Customer Relationship Management (4th edition – 2009) Muhammad Azam
Senior MIS Manager, Eden Group Muhammad Arshad
Chief Executive Officer Sung Min Kim and Joseph T. Mahoney (2006). Mutual Commitment to
Support Exchange: Relation-Specific IT System As A Substitute For Managerial Hierarchy. Strategic Management Journal 27: 401-423 (2006)
Victor Y. Haines III and Geneviève Lafleur (2008). Information TechnologyUsage and Human Resource Roles and Effectiveness. 2008 Wiley
Periodicals, Inc Yonggui Wang, Hang Po Lo, Renyong Chi and Yongheng Yang (2004).
Framework for Customer Value and Customer Relationship Management Performance. Managing Service Quality Volume 14