Customer Relationship Management in the Business

Subject: Sociology
Pages: 18
Words: 4966
Reading time:
18 min
Study level: PhD


Competition in the international market has intensified, and companies have been required to establish strategies to achieve competitive advantage. Businesses are experiencing many challenges today than in the past because the world has accepted open market systems. The challenges are experienced by the government institutions and non-governmental institutions. With the introduction of modern technologies, governments have been required to improve their services. Public service delivery has improved in many countries, and this has been facilitated by the adoption of modern systems of knowledge management. Knowledge management has become a key instrument in improving the delivery of services within the public sector. Public institutions deliver their services to the citizens, and the demand for quality services has increased. The citizens are the customers because they pay taxes to receive the public services. It is important for the government leaders improve the quality of services delivered to customers. A lot of emphasis has been placed to improve the knowledge management systems in public institutions. This strategy aims at improving the services delivered to the citizens. Customers are very important in an organization because they sustain the organization. An organization should have strategies to implement modern technologies so that the level of customer satisfaction can increase (Boumarafi, 2009).

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The changing market environment has created the need to have reliable customer relationship management strategies. Customer relationship management has the objective of ensuring that the organization relates well with customers. It involves communicating important information to customers, and delivering services according to the expectations of customers. Companies establish CRM strategies so that they can establish strong customer loyalty. CRM improves the performance of an organization because it provides an environment of communicating efficiently with all stakeholders. Managers should embrace appropriate technologies to capture the needs of customers and to deliver the products efficiently in order to achieve success in CRM. Therefore, knowledge management systems should be used to monitor the behavior of customers and deliver the products according to the requirements of customers (Won-Moo & Seongho, 2012).

Organizations have identified knowledge as a source of competitive advantage. Such technologies are applied in the production process, in learning about customers and market needs, as well as the supply market. Knowledge determines a firm’s competence and capability to differentiate it from its competitors and give it power to enter into new markets. Knowledge management is hyped as the basis for competitiveness in the world of business. In this case, customers are considered as the key to competitiveness. Today, the attitudes towards customers have changed. Thus, organizations appreciate the need to manage customers appropriately. For instance, entrepreneurs are no longer viewed as the people who own capital, but rather as people who have the knowledge to capture customer loyalty. The need to have knowledge management is not only limited to the private sector. Therefore, the public sector has also embraced the strategy to improve the products delivered to the citizens. The introduction of information technology in organizational activities has increased the need to capture and distribute knowledge about customer relationships (Boumarafi, 2009). This paper focuses on customer relationship management as a process of knowledge management. The concept of knowledge management has been introduced to provide an overview of the paper. In addition, various aspects of CRM have been explained. A case study of Dubai Department of Development (DED) has been provided to link the theories to practical scenarios. The case study is based on a government institution in the UAE.

Major Problems

The Department of Economic Development (DED) is a section of the government of Dubai. The DED licenses businesses in Dubai and develops policies. The policies focus on creating economic growth in the region. Programs are developed to create economic development. The DED develops policies that affect investors in the region, as well as foreign investors. Initially, the department offered services manually, and this created a lot of delays. The quality of services was very poor, and there was a lot of concern from various stakeholders. The relationship between the DED and the clients was very poor because clients had to walk to the organization to receive the services. The clients were inconvenienced because receiving the services was hectic.

Identification and Evaluation of Alternate Solutions

His Highness Sheikh Mohammed bin Rashid Al Maktoum issued a decree to DED to offer services through the online channel in an effort to improve service delivery to the customers. Adoption of the online system would allow clients to access the services anywhere. In addition, the speed of accessing the services would be improved by establishing an e-government system. The IT department of the DED used the infrastructure of the organization to develop the online channel. The services were made available to the employees, the public and other departments of the government. Previously, deploying new services would take several days. However, after installing the CRM systems, the services are delivered in a few minutes (Sethi & Sethi, 2008).

The DED is a public organization in the United Arab Emirates (UAE). The DED was among the first government organizations to establish on-line services. The organization provides trade licenses to businesses in Dubai. The IT infrastructure has been developed to improve customer relationship management. The DED created an intranet to deal with the issues affecting the employees to achieve success in establishing IT infrastructure. In addition, the organization developed an Extranet to communicate with other government departments. The organization delivers information to the customers efficiently. The system performs registration of businesses. It also regulates business registration in the region. Customers can access the system through the mobile applications or through internet kiosks. His Highness Sheikh Mohammed established the policy of delivering all government services through online channels. This strategy was developed in 2000 and public organizations implemented the decree. The DED was among the first organizations to develop online systems. Even though the existing IT infrastructure inhibited the development of an appropriate system, an efficient system was established (Sethi & Sethi, 2008).

The main task of DED is to issue trade licenses. Permits are also issued to companies operating in Dubai. Regulatory systems are also issued, and they are based on the Power Builder program. Java technology was applied to develop the project. The team performing the project applied various technologies to establish the online system for the DED. The use of Java to write the web applications was no applicable, and the IT team had to change the system. The team had no practical experience in using Java, and there were two options remaining. The task of implementing the e-government system was tasking, and the team had to accomplish the goals (Sethi & Sethi, 2008).

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The IT department upgraded the infrastructure in order to solve the challenges experienced during development stages. Professionals in IT were outsourced because there were some complications, which were experienced when developing the system. The experts developed the structure of e-government, and the clients could access all services through an online system. The achievement was received with jubilation because clients could get services easily (Al-Khouri, 2011).

Knowledge Management

Knowledge management (KM) encompasses all possible technology and human oriented interventions and measures that are used to optimize the generation, utilisation and logistic of knowledge within an organization. Any plan developed for the implementation of KM program should integrate the pool of knowledge from various departments. However, some organizations develop plans that lack the appropriate policy to unify the presentation and content of records of information. For instance, different departments might have different methods of recording and storing information. This is difficult for employees from various departments to coordinate the information gathered. As a result, the information will be of little use if only the collecting department can use it, and no other department can apply the information. Management involvement in the implementation of the KM processes is a key determinant for the success of the project. In addition, a good start for a project is not a guarantee of its continuity and successful completion. This calls for the management to be actively involved in the whole process. However, managers have a volatile involvement, whereby they make a one-stop-appearance and are always not updated on the progress of the implementation plan. When the management is absent, employees continue working towards unspecified direction. Therefore, the members end up working outside the intended goal-plan. In addition, lack of management commitment leaves the employees with no role model to follow. Therefore, they get disillusioned at the way and stop pursuing the goals (Boumarafi, 2009).

Technology-driven knowledge management strategy is characterized by the use of information systems, which include chat forums and knowledge directories. These information systems are used to maximize the coding and dissemination of important information, as well as connectivity and usability of knowledge resources. Human driven knowledge management strategies are characterized with provision of channels, which may not be technologically enabled. These channels are meant to foster people-to-people interactions, social contact networks, as well as direct conversation. It is based on the assumption that knowledge is developed from social networks such as experience sharing or story telling (Boumarafi, 2009). Technology and information systems are also important in acquiring and dissemination of knowledge. Different information technology tools can be used depending on the knowledge creation processes. For instance, an organization can use e-meetings to encourage people to chat about the new ideas that will help in identifying tacit knowledge. In addition, the organization can improve the capacity of employees to access and retrieve explicit knowledge by using IT for document categorization. This shows that information and communication technology is so instrumental in promoting knowledge management in an organization (Boumarafi, 2009).

Customer Relationship Management

A relationship is the link between one party and another. Nurturing relationships is important because it improves the interaction between stakeholders of an organization. Customer Relationship Management (CRM) involves managing the interaction processes in an organization. Through CRM, managers develop appropriate models to interact with customers and other stakeholders. With the development of modern technologies, CRM has improved because people can interact effectively. The main goal of establishing CRM systems in an organization is to attract customers. In addition, organizations use CRM to retain customers. Establishing effective CRM reduces the costs of promotion because the potential customers understand the products (Al-Dhaher, n.d.). Communication is a major ingredient in establishing strong relationships. For effective communication to be achieved in an organization, the management should create good relationships with employees and clients. Good relationships create a good environment to make appropriate decisions. Effective communication plays a major role in improving the performance and morale of employees in any given organization. Therefore, CRM is important because it improves customer satisfaction. It also improves the performance of employees (Boumarafi, 2009).

Creating healthy relationships with customers improves the sales of an organization because it attracts and retains the customers. CRM increases the profits of an organization because the sales revenues increase when there are many customers. Therefore, for a company to maintain high levels of customer loyalty, CRM strategies should be established. Customers buy products from the company, and they increase the sales revenue of an organization. The larger amount of sales, the higher the profits. An organization should have many clients to sustain itself in the market. Therefore, CRM plays a major role in improving the number of customers that an organization has. CRM also helps reduce the costs of an organization. This is achieved when customers understand the processes of an organization, as well as the products that are manufactured. When the customers understand the products of an organization, the promotional costs are reduced (Al-Dhaher, n.d.). Implementing CRM strategies is not costly because no physical resources are required. The strategies are developed and implemented through people. The management establishes strategies and implements them for the success of the organization. The employees should be involved in the process of making such strategies. Employees interact with customers, and they should be motivated to establish healthy relationships (Al-Dhaher, n.d.).

Benefits of program

The system reduced the cost of training the employees about IT services. The introduction of the e-government system has eliminated the manual system of performing duties. Initially, all employees had to be trained to handle the manual system. Continuous training was done to ensure that the workers know all the systems of the department. With the introduction of the e-government system, clients can access the services. This system allows customers to access services through the online system. Therefore, there is no need to have many employees. The DED has reduced the number of employees, and this strategy has increased the performance of the organization (Al-Dhaher, n.d.).

Several e-government services were deployed in many channels. The clients can access several services through the online channel. This has reduced congestion at the DED offices. The organization has facilitated the delivery of many services. The new strategy has improved the business environment in the country because people can acquire trade licenses easily. The business arena has changed, and this has been caused by the ease in accessing the trade licenses. This strategy has attracted many investors because there are few impediments to establishing a business. The new strategy has attracted investors from the country and abroad (Al-Dhaher, n.d.).

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Accountability in the department was increased because employees could be monitored through the online system. The CRM is monitored by several people. The activities of all workers are monitored and regulated. The system has improved accountability because the performance of all people can be monitored. This system has reduced cases of corruption and has increased the performance of the DED. The e-governance system has also reduced cases of corruption because all parties are accountable (Al-Dhaher, n.d.).

Inventory maintenance costs were reduced after the introduction of the online system. Initially, information would be stored in hard copies, and it was costly to maintain the documents. Cases of lost documents would be reported. In addition, there were people employed to maintain the documents. However, after the introduction of the online government system, the maintenance costs reduced. There was no need to employ people to maintain the documents because everything could be accessed through the online system.

Efficiency in delivering government services to people from different languages was improved. The services were delivered in Arabic language, as well as in English. The CRM system was developed to accommodate the needs of all people in the country and foreigners. The system uses the two languages to encourage investors from within and from other countries. Therefore, communication among various stakeholders has been improved because there are no language barriers. The people using the system can communicate easily, and this reduces the process of implementing goals (Al-Dhaher, n.d.).

With the implementation of the CRM system, DED has managed to improve communication with clients and employees. This has increased efficiency, and it is easy to perform activities of the organization. Today, the DED can communicate effectively with all the clients seeking services from the organization. Communication is the act of passing messages from one person to another through a given medium. Communication in an organization is vital because it facilitates how decisions are passed from the top level management to the lowest level management. The government officials at DED can share information easily because the new system allows communication between stakeholders. Communication is used to facilitate the delivery of guidelines and policies that necessitate the proper management of the organization. Thus, communication is a crucial process the operations of the organization because it determines how guidelines are followed. The CRM has improved the process of developing new ways to manage the resources and the human power in the organization (Brink & Berndt, 2008).

For effective communication to be achieved in the organization, the management should create good relationships with employees and clients. Good relationships create a good environment to make appropriate decisions. The organization should have an excellent leader so that the decisions made are accurate. Therefore, the qualities of a leader are important in encouraging employees to perform their tasks. Leadership also helps to execute a good plan to make decisions and pass them to employees. Effective communication plays a major role in improving the performance and morale of employees in any given organization. The government leaders at DED should possess effective communication skills to pass the appropriate message to the followers. Good communication skills are a necessary tool for a leader because people are influenced by the ability of the leader to express ideas to the subordinates. A leader should communicate effectively about the issues arising in an organization and give proper advice on how to meet the set goals and objectives. The government leaders should possess management skill in the sense that the leader can manage human skills and talent. The leaders should inspire the followers to work towards achieving goals of the DED. In addition, leaders should possess a good attitude to facilitate leadership of people towards achieving the goals of the organization. A leader should possess business skills in the execution of duties because they set how each decision plan is applied in the organization. Good business skills help in the management of finances and how to draw viable plans that are of great help to the whole team. Harnessing good business skills help the leader to assign and delegate duties and responsibilities to the subordinates. An excellent manager should create a good working relationship with people within and outside the organization. They should create friendship with all stakeholders so that people can approach the leaders for consultation (Brink & Berndt, 2008).

Creating the e-government system improved professionalism in conducting government activities. The CRM improved the delivery of services with accuracy and without delays. After implementing the e-government system, the DED increased the quality of services delivered to the customers. In addition, the quantity of services that could be delivered increased. This improved the level of professionalism in the organization. Professionalism is the process of achieving the goals of an organization according to the standards of the organization. It involves adhering to the standards of a certain work (Al-Dhaher, n.d.).

The CRM system has improved management of employees at the DED. The DED leaders have been encouraged to create a good relationship with the workers. This has increased the performance of employees. The creation of good relationships in the organization improved the relationship between employees and the executive team. This improved the level of employee management. For example, the leaders can learn the emotions of the workers when they interact through the online system. This has helped reduce conflicts in the organization. The government leaders are encouraged and trained to learn the emotions of their subordinates. Therefore, leaders should have emotional intelligence in the workplace. They should apply this strategy when interacting with various people in the organization (Sethi & Sethi, 2008).

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The e-government system has improved communication between various stakeholders of the DED. Communication in an organization is crucial because it helps to increase productivity of the firm. When decisions are to be made in the DED, the leaders should know how such changes affect the work ethics of the employees. This is important because it helps to lower the possibility of encountering resistance by fellow employees when the changes are implemented. Communication is an integral part of management because it incorporates changes in the organization. Professionalism is evident when the management chooses to use modern forms of communication that are effective. Modern communication methods have improved the way people in the organization communicate and pass information. This is crucial because it establishes clear plans and goals for the organization. Information in the organization is crucial because leaders need to have a clear feedback of operations at the lowest level, and this helps in the continuation of services (Al-Dhaher, n.d.).

The the DED receives feedback from clients and the employees concerning the efficiency of the new system. In addition, feedback is provided about the satisfaction levels of the clients. Feedback system guides the DED on areas of weakness, and this helps them improve on the communication process and other areas where there are problems. Providing feedback is important in solving the communication problems facing the workers and clients. As a manager, there is a need to formulate a good way to solve problems facing employees at the workplace. A leader may install suggestion boxes that act as information gathering tools in the organization. A leader may open a joint email where employees can send their suggestions and the leader should reply to emails sent. As a good leader, one should exercise professionalism when passing information across the organization. This facilitates proper decision making and execution of plans and goals for the organization. This strategy ensures that the business is monitored, and the performance of employees improves over time (Sethi & Sethi, 2008).

The introduction of the new system has motivated the employees at the DED. Performing tasks at the DED is easy because the online system is easy to operate compared to the manual system. Motivation is the drive that an employee has to achieve the goals of an organization. Motivation increases the efficiency of employees in any given organization. Motivating factors do not only have to be financial incentives, but non-monetary incentives may be offered to employees to improve their performance. A good manager should improve the working conditions of employees in the workplace. Good communication in the organization facilitates how leaders know the complaints from the subordinates and clients. In addition, good communication facilitates effective decision making because the employees contribute towards making appropriate decisions. When employees are trained in effective communication, they improve their communication in the workplace (Sethi & Sethi, 2008).

Challenges of implementing the CRM at DED

It is complicated to implement CRM in an organization because there are many people involved in the implementation process. The CRM strategy is not simple because there are many processes involved. In addition, the process increases the activities of the organization. The interaction processes of an organization should be monitored. In addition, appropriate communication processes should be created. The use of modern technologies is required in implementing the CRM. Technology is used in tracking the customer processes. Furthermore, opportunities available in the market should be tracked. Information about the clients should be monitored to ensure that any information about the customers is obtained (Sethi & Sethi, 2008).

The use of CRM has been poor in organizations using this strategy. This is because the application of CRM requires navigating and implementing all the processes of an organization. Most of the clients are not computer literate, and the use of the e-government system has been a challenge to such people. This has required the use of assistants, who might not deliver the services according to the needs of the clients. The system has complicated the delivery of services to many people in the country. In addition, the system requires the use of the internet, and in some cases, the internet connections are not available. This hinders access to the services because the system cannot be used without the internet (Sethi & Sethi, 2008).

With the increase in computer crimes, the e-government system is prone to attacks by criminals. Cyber attacks have increased and and organizations have lost a lot of assets. This indicates that the DED is also prone to attacks by the cyber criminals. This can affect the delivery of services. In addition, most people have been used to use of the e-government system and changing to any other system might be challenging (Sethi & Sethi, 2008).

Implementing the program and managing the change

The change in the traditional system to the e-government system was a major challenge to the employees at the DED. The workers were used to the traditional system, which used manual infrastructure. The executive team had to conduct change management processes to ensure that the clients and employees accepted the new program. Organizational change is comprised of many activities that an organization engages in with the aim of improving the performance of the organization. Change is a process that combines many activities. These activities are often sidelined by organizational leaders who assume that they will be addressed in a passive manner. These activities are discharged in organizational programs that are introduced into the organization. Whereas the main objective of organizational change is to bring improvements in the organizational functions hence improving the performance of an organization, change still faces many hindrances.

One factor that was a major constraint to change management at the DED was poor communication. The communication of change in the firm was a complicated process. This was considered a serious issue because success in implemented the new system determined by acceptance by the users. Many people were reshuffled, and this caused resistance to change the system. The new system required a few workers, and there were speculations that many people would lose their jobs (Sethi & Sethi, 2008).

Therefore, appropriate change management mechanisms were required to avoid resistance to change. Change management involves all the stakeholders of any given organization while communications links the stakeholder to one another and to the change initiative of the organization. Change involves influencing behaviour and routine working patterns of employees. Managing change needs strong communication techniques. In large organizations, change information has to be communicated to a very wide audience including the customers of the organization. Organizational stakeholders will often react or participate in change depending on the way they understand the change messages that are passed to them by the management of firms. Therefore, communication is of great importance in organizational change. Communication is the main hindrance in the attaining change, in many organizations. This happens in spite of the argument that strategic communication can help with the full realization of organizational change (Boumarafi, 2009).

Communication still remains a key issue in the realization of change in firms thereby attracting more research. Research also reveals that communication is a central pillar of organizational change, yet it is often ignored or taken with little seriousness during the implementation of change. Many theories of organizational change and organizational development only highlight the role of communication in organizational change. They do not explore the essence of communication in organizational change programs. Lapses in communication which is also termed as poor communication within the organizational change process often result in failure of very minimal achievements of the goals of change. Most of the failure aspects in organizational projects are often blamed on poor or breakdown in communication between organizational stakeholders (Boumarafi, 2009).

Without communication, change cannot begin or run in the firm. Change begins with communication and is supported by communication. The internal and external communication is used for enhancing the adoption of change in firms. Any firm that transforms in the current economy requires to have set effective communication to back up the transformation process. This is what is referred to as strategic communication in modern management practices. Research points to the relevance of effective or strategic communication in the change process, in organizations. Research also points that many organizations find it hard to attain the objectives as a result of the breakdown of communication in the process of implementing change. The change process involves many activities like organizational learning. These activities purely need communication meaning that the communication of change in the firm is a complex process. Change may involve activities that go beyond the organization, like cross-organizational communication (Boumarafi, 2009).


  • The government should continue to train the workers about the new system so that they are well acquainted with the technology.
  • The technology should be improved with time to ensure that it does not become outdated.


The use of CRM in government institutions has increased in the modern times. This has been facilitated by the need to increase performance as well as the need to have a competitive advantage. The DED has embraced the use of e-governance to improve communication with all the stakeholders. The use of CRM has improved accountability in the DED. In addition, communication among all stakeholders has improved. The e-government system has experienced several shortcomings, such as the illiteracy of the people. Some people do not have the skills to operate the system. This has complicated the system. In addition, there are possibilities of cyber attacks. However, despite the few challenges experienced in implementing the system, there are many benefits. For instance, the CRM system has improved communication among the stakeholders. The new system has improved the economic growth of the UAE because many investors are willing to work in the country. Barriers to entry in the market have been reduced, and people can invest easily after the introduction of the e-government system at the DED. Communication is an important process in the organization because it links various stakeholders. People understand the processes of the organization through communication. In addition, decisions are made through communication. The management of any organization should account for the economic importance of its work force and the role the employees play in attaining organizational goals and objectives. This ensures that the performance of employees is improved. Motivation of employees may take the form of non-monetary incentives through recognition and offering training facilities. When communication is improved in an organization, the employees interact well , and this helps to motivate them, and the performance is improved. Therefore, managers should embrace good communication strategies to improve the performance. Change management is a strategy that the leaders should embrace so that all the stakeholders can readily accept the new system. The introduction of the e-government system experienced resistance because many people were not ready to accept the change. The leaders should have conducted proper research to identify the needs of the people. In addition, the leaders should have involved all the people affected by the new system. Imposing things to people causes resistance while engaging people improve the relationship between all the stakeholders.


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