An Institutional Perspective on Customer Relationship Management

Article excerpt

ABSTRACT

Customer relationship management (CRM) is an IS innovation that is becoming an important concern for many organizations; for instance a recent study suggests that over 50% of organizations may be in the process of implementing some form of CRM technology. This paper uses the organizing vision framework, introduced by Swanson and Ramiller (1997), as a tool to examine CRM from an institutional perspective. Such a perspective is valuable to researchers as it highlights the multifarious factors outside the organization that can impact adoption of CRM within the organization. For practitioners, we find that by creating, participating, and being influenced by the CRM discourse, managers do not operate in a vacuum when they consider whether to adopt and implement CRM.

INTRODUCTION

Customer Relationship Management (CRM) is an IT-driven concept used to design the business and its processes around the customers' wants and needs (Burghard and Galimi 2000). The CRM market is said to have been around $8 billion for 2004 but is expected to grow to $10 billion by the end of 2006 (Low 2002). In addition, recent surveybased research of CRM diffusion (Firth and Swanson 2003) has found that more than half of the respondents are either using or implementing some form of CRM technology (see Figure 1 below).

In addition to this evidence of extensive diffusion of CRM and the rapid reported growth in the CRM market, CRM has other facets that make it interesting to study. CRM is not simply another turnkey project that can be parachuted into an organization. With the unique ways in which different organizations handle their customers and because business processes supporting this are often complex and diverse (Gefen and Ridings 2002), it is clear that "CRM is not a tool for buffing a company's performance at the edges" (Rigby and Ledingham 2004, p. 119), but must be handled in a very strategic fashion.

Despite this, researchers seem to typically focus on specific, technical aspects of CRM (e.g., Kim 2006), or on implementation details that arise long after the decision to adopt CRM has been made (e.g., Gefen and Ridings 2002). Both of these emphases, we believe, can be attributed to viewing CRM primarily as a technology initiative (Kale 2004). One difficulty with such a perspective is that it doesn't often fit with how executives themselves grasp CRM. True, some executives see CRM as a narrowly defined and very tactical undertaking, but for others it is a broadly conceived and holistic solution (Payne and Frow 2005). To encompass and address this continuum of views, as well as the complexity inherent in CRM, we take a different research perspective, based on the "organizing vision" framework first presented by Swanson and Ramiller (1997).

The paper proceeds as follows: First we introduce the notion of an organizing vision as developed by Swanson and Ramiller (1997). We next provide a brief descriptive overview of CRM. We then look at the diffusion of the CRM innovation using the organizing vision framework. We conclude with remarks about how an institutional perspective on CRM, such as that provided by the organizing vision framework, can be useful to both academics and practitioners alike.

ORGANIZING VISIONS

An organizing vision is defined by Swanson and Ramiller (1997, p. 460) as "a focal community idea for the application of information technology in organizations." Organizing visions, they further expound, are "developed and promulgated in the wider interorganizational community" (Ramiller and Swanson 2003, p. 13). The organizing vision concept recognizes that managers who are faced with options about an innovation make those choices not in isolation but in the context of, and with reference to, processes taking place at the institutional level. Essentially, the organizing vision framework provides researchers with a way to view the diffusion of technological innovations such as CRM from a broader and more encompassing perspective. …