Review Of Customer Relationship Management By National Australia Bank

SWOT ANALYSIS- CRM Approach by National Australia Bank

Discuss about the Review of Customer Relationship Management.

The most successful businesses today persistently show the ability and willingness to identify, understand and meet the customer needs to retain positive business relation (Armstrong et al. 2015). Establishing long-term customer relationship is essential in attaining stability in the current dynamic market.  The managers work towards formulating strategies that will empower their organizations to become customer-centric (Boulding et al. 2013). The customer-centric approach to increase customer satisfaction through aligning the customer-centered processes and strategies to the organizational objectives is the underlying concept of Customer Relation Management. CRM is a business strategy to optimize revenue, profitability and customer satisfaction through designing practices to anticipate insights to customer behavior and provide exceptional services (Khodakarami and Chan 2014, pg 28). An example of superior services to improve customer experience is through efficient and speedy responses to the customer instructions, a position which can be accomplished through the introduction of service automation approach in the organization.

National Australia Bank (NAB) is one of the largest financial institutions in Australia. It is a bank with the highest capital assets value in Australia and commands a large customer base in the banking sector (Sheridan and Jang 2012). The bank operates in over 1,500 branches in Australia, New Zealand and other countries around the world, serving over 12 million customers. The higher percentage of NAB revenues is earned from Australia operations which form 74% of the total revenue share according to 2014 bank financial results. With the remaining share of income received from the operations in other countries majorly in United Kingdom, New Zealand, and the United States.

To prevail in the market as a leading provider of financial and banking services, National Australia Bank has shown commitment to developing its business through understanding and supporting customers to meet their needs. The bank strives to offer outstanding services to both its retail and corporate customers through competent, innovative and inclusive manner. As stated in their core values, that NAB is not only good for managing money matters but to its people too, this value is demonstrated through its devotion in giving specific solutions to the current customer requirements.

This involves the analysis of the strategic factors within the business environment to enable the company leverage on its strengths and eliminate weakness in exploring the competitive market (Hollensen 2015).  The below is the detailed analysis of NAB internal and external factors that may affect its performance in the market.

CRM Project objectives

The bank has a good brand name and stable financial position. National Australia Bank received an excellent reputation through being the first bank in the world to issue the green bond to the Climate Bonds Standard in 2014, for financing climate change solutions. The revenues and interest income information obtained from the bank’s 2016 financial year result indicated an increase in cash earnings by $40 million (12.7% increases) compared to the 2015 economic figures. The net investment income increased with $19 million in the same year. It further shows a reduction in operating expenses by almost $28 million, 3.6% decrease from the previous resulting to a strong balance sheet (Sheridan and Jang 2012).

The financial institution also offers a wide variety of products and services to the customers.  The bank offers diverse products including asset management, business and consumer lending, deposit-taking, transactions services and favorable investment platforms. Besides, National Australia Bank provides its services and products to both retail and corporate customers around the globe.

The bank revenue declined which hindering growth and development in the market. The noted decline in profit and revenue in 2016 financial year resulted from the reduced business performance in its subsidiary company Clydesdale Bank, currently known as CYBG in the United Kingdom. The bank recorded a profit of $352 million in the fiscal year 2016, a decrease of 5.6% from the previous year.

The bank lacks global or international acclaim. National Australia Bank has not received any universal approval in the worldwide market. This implies that the bank has not made enough investments in the technology sector, which promotes innovations leading to global recognition.

The global bank presence provides an opportunity to penetrate a broader market.  National Australia Bank has expanded its services to other countries around the globe. The bank has branches in China, India, Japan, United Kingdom and the United States.

Acquisitions and joint ventures ability of NAB to acquire other companies and form joint ventures to increase revenue have been illustrated in the purchase of Cash Service Australia Pty Ltd in Australia.

The bank has a capacity to diversifying portfolio investments where the customers can access varied investment options including cash, bonds, stocks, real estate and mutual funds.

The changing government regulations are expensive in the long-run. The increased workload for the employees and time-consuming factor to ensure compliance affects the usual business operations of the bank. A risky procedure which can negatively impact the company returns.

Selected CRM Suite and Analytical Capabilities

There is stiff competition in the market.  The existence of other banks such as HSBC, CITI group and standard chartered bank in the market have intensified the game since they offer almost similar products and services in the industry (Jiménez, Lopez and Saurina 2013).

National Australia Bank is the leading institution in providing financial and banking services in Australia and other countries. The bank specializes in providing services in government, education, agribusiness and community sectors in the economy.  In the process of supporting financial needs in the market, the bank adheres to its policy of creating a positive impact to customers, society, and other stakeholders. National Australia Bank is much dedicated to delivering first-class customer services to satisfy the client needs efficiently.  This is a vital process which requires implementation of Customer Relationship Management applications in the company.

• Improved efficiency in customer service. The timeliness of customer services and the improved customer interaction under the CRM systems is a sign of quality services (Verhoef and Lemon 2013, pg12).
• Profit maximization. The increased efficiency experienced in the service sector as a result of automated customer service adds more value to customers. Hence higher customer satisfaction is encouraging a healthy business relationship resulting in more revenue generation (Cui, Wong and Wan 2012 pg. 360).The self-service approach also creates more free time to the bank staffs, allowing for shifts to other revenue-generating activities such as sales. The bank can reduce costs and save more resources which may be required for operations at customer service desk by reducing the paperwork and minimizing face to face customer interaction.
• Enhance customer loyalty. Apart from the quality services provided through CRM strategies, the system reduces the cost of transactions for the customers. This is a value-creating experience to encourage the customers to maintain a stable relationship with the bank.

• CRM provides instant reactions to the changing business environments (Nguyen and Mutum 2012)The use of high technology to develop CRM applications incorporated more concepts or ideas regarding the dynamic nature of the business hence the capacity to sustain the company in a competitive market.
• Personalized services. This promotes personalized customer experience making the customer feel recognized and valued in the organization. It also creates a convenient and reliable point of service to the customers.
• Boosts the company revenues. The result of using CRM systems is a tremendous decline in the company expenses, creating a positive net of return.
• Target the high-value customers and developing programs to increase their loyalty to the company.

Considering the competitive nature of the banking industry, NAB needs to acquire CRM application which will allow it to sustain competitive advantage in the market, the CRM application with the capacity to promote constant improvement in customer experience and ensure quality, convenient and competent services to customers. The best CRM software suggested to National Australia Bank to meet the bank-specific goals is the Oracle’s Siebel Customer Relationship Management (CRM). The decision to select Siebel Oracle’s CRM among other vendors or software was based on the following analysis:

• An examination and evaluation of the Siebel CRM system spearheaded by the project team in the bank. In particular, considering the impact the system will initiate in the customer service department, the core department in the banking industry.
• A comprehensive demonstration of how the Siebel CRM works to deliver fast services to the customers. The project team also carried out a comparison to other organizations that use the system, receiving positive feedback from all the agencies contacted.
• In the analysis, it was established that Siebel Oracle’s CRM system could offer complete customer solutions from various points of customer requirements. That would deliver excellent customer experience.

The selection of Siebel CRM was aligned to the visions and missions of the organization. It was found to be the most reliable system to drive the company goals and objectives. The detailed analysis contributing to the selection of Siebel CRM includes:

• Optimal resource deployment at the service centers.
• Fast and more efficient customer service.
• Speedy customer issue resolution.

The self-service initiated by the system does not require additional personnel at the customer service desk, contact centers and in any other service point. This lowers the costs of labor and increases revenue to the company. The mobile field services provided under the Siebel CRM system allows complete access to the customer information is making it not mandatory for the customers to visit the branches seeking for services (Grandhi and Chugh 2012, pg 390).

Siebel Oracle’s CRM reduces complexity and the errors in service which might have been experienced through human interaction (Oracle International Corporation 2013).The system takes less time to serve the customer and is more accurate on executing the customer instructions. It also collects the performance data for the bank providing a platform for improvements especially in areas where the standard of quality service not met. The system is capable of monitoring the organization deliverables to ascertain whether it meets the set essential metrics to achieve objectives (Hsieh et al. 2012). It also Increases the speed of service delivery.

Siebel CRM can access complete customer information or details to facilitate faster resolutions to issues arising from the customer side. Besides, it provides instant access to critical customer information anytime, anywhere to speed up the resolution process (Yang, Liu and Ni 2013). This is a guarantee of value creation to the customer at the point of service.

• For the Siebel CRM system to retain the information and knowledge about the customers, data gathering is a crucial process to help integrate the data from essential organization departments.
• The marketing approach required to identify and target customers to provide relevant information for integration in the system.
• Customer service considers critical requests and genuine complaints of the customers.
• Finance to determine the cost of implementing the CRM project.

Since the organizational departments are interrelated, successful implementation of CRM occurs if all the units show commitment in developing such sustainable project. Each department must play its roles and responsibilities and efficiently communicate to achieve the overall benefit of the CRM program.

• Increases adoption rate. This is to help employees feel comfortable using the Siebel CRM system. The right training programs if developing will motivate the employees to use the CRM. Where there is a low rate of adoption, the CRM may be under-utilized resulting to company losses considering the high installation cost of the CRM system (Basarab and Root 2012).
• Improve knowledge of the Siebel CRM features. Training improves the employees’ experience on the characteristics of the CRM application and develops an understanding of the system capabilities to enhance organization performance (Goetsch and Davis 2014). The employees are supposed to be trained on the use of Siebel CRM from fundamental to advanced functions to allow a deep understanding of CRM functional processes.

To achieve the training objectives, the National Australia Bank should ensure the following:

• Allocating adequate resources and time to the training program.
• Ensure that all employees from every organization department are well trained and to be competent enough to use the Siebel CRM system.
• Provide detailed information about the Siebel CRM project to help users understand the objectives of introducing the program and the changes that it may cause in the organization structure.
• The manager and the project implementation team to provide an opportunity for employees to ask questions on areas they do not understand in the CRM system. This will broaden their knowledge about the CRM and place them in a position where they can use the system more efficiently to realize desired results.
• Demonstrate to the employees the positive benefits arising from the practical use of the Siebel CRM. This will be a way of motivating them to embrace the purpose of this CRM system in the organization.

Month 1

Management to select project team and provide guidance on the project

Project team to be trained on the CRM application by a representative from the vendor- Siebel

Brief introduction of CRM to staff

Customization of Siebel program to NAB systems

Data migration from the traditional data system to new CRM system

Implementation of CRM software programs

Month 2

Month 3

Establish initial staff training programs

Month 4

Post analysis on the use of the CRM application by the vendor and the bank

Review of the progress using the set metrics

Activate the users to the system

Implementing CRM automation system at workplace Budget

Project Expenditure	Rate $ per unit	Month	Month	Month	Month
		1	2	3	4
Implementation costs	750
Consultation costs	150
Database user license	240
Data migration cost	300
Customization	140
Training programs	120
Operating system application cost	180
Annual costs
Software license	270
Software maintenance	300
Continuous training programs	50
TOTAL	2500
Approximately $2500 per user in a year, Assuming there are 800 users
For the implementation stage, it will cost 800*2500= $2 million.

Conclusion

The stiff competition in the banking industry requires banks to employ more efficient, economical and lower-risk approaches to improve customer service and reduce the cost of operations to attain competitive advantage in the market. The successful implementation of Siebel Oracle’s CRM by the National Australian Bank (NAB) will automatically result in increased rate of return (ROI) and increased profits shortly.

Customer Relationship Management remains a complex project which is critical to the success of the business. An advantageous development of CRM initiative requires good planning, implementation and management of the entire project to be appropriately done using the expected time and resources to realize the CRM benefits. The Customer Relationship Management assists the bank to identify, attract more clients, and to retain profitable customers.

References

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Basarab Sr, D.J. and Root, D.K., 2012. The training evaluation process: A practical approach to evaluating corporate training programs (Vol. 33). Springer Science & Business Media.

Boulding, W., Staelin, R., Ehret, M. and Johnston, W.J., 2013, May. A customer relationship management roadmap: What is known, potential pitfalls, and where to go. American Marketing Association.

Coelho, P.S. and Henseler, J., 2012. Creating customer loyalty through service customization. European Journal of Marketing, 46(3/4), pp.331-356.

Cui, G., Wong, M.L. and Wan, X., 2012. Cost-sensitive learning via priority sampling to improve the return on marketing and crm investment. Journal of Management Information Systems, 29(1), pp.341-374.

DaSilva, C.M., Trkman, P., Desouza, K. and Lindi?, J., 2013. Disruptive technologies: a business model perspective on cloud computing. Technology Analysis & Strategic Management, 25(10), pp.1161-1173.

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Grandhi, S. and Chugh, R., 2012. The strategic value of mobile CRM applications: a review of mobile CRM at dow corning and DirecTV. In 2012 International Conference on Innovation and Information Management (ICIIM 2012) (pp. 388-394).

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.

Hsieh, J.J., Rai, A., Petter, S. and Zhang, T., 2012. Impact of user satisfaction with mandated CRM use on employee service quality. MIS Quarterly, 36(4).

Hsu, D.K., 2015. Case Studies in Operating Systems and Global Marketing. E-Leader International Journal, 10(1).

Jiménez, G., Lopez, J.A. and Saurina, J., 2013. How does competition affect bank risk-taking?. Journal of Financial Stability, 9(2), pp.185-195.

Joshi, M., Cahill, D., Sidhu, J. and Kansal, M., 2013. Intellectual capital and financial performance: an evaluation of the Australian financial sector. Journal of Intellectual Capital, 14(2), pp.264-285.

Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.

Machiraju, R.R.P., Nash, C.S. and Wu, J.A., Oracle International Corporation, 2013. Framework for integrating applications. U.S. Patent 8,473,970.

Nguyen, B. and Mutum, D.S., 2012. A review of customer relationship management: successes, advances, pitfalls and futures. Business Process Management Journal, 18(3), pp.400-419.

Sheridan, N. and Jang, B., 2012. Bank capital adequacy in Australia. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1997738 IMF working paper.

Verhoef, P.C. and Lemon, K.N., 2013. Successful customer value management: Key lessons and emerging trends. European Management Journal, 31(1), pp.1-15.

Weinstein, L. and Mullins, R., 2012. Technology usage and sales teams: a multilevel analysis of the antecedents of usage. Journal of Personal Selling & Sales Management, 32(2), pp.245-259.

Yang, P., Liu, Z. and Ni, J., 2013, September. Performance Tuning in Distributed Processing of ETL. In Internet Computing for Engineering and Science (ICICSE), 2013 Seventh International Conference on (pp. 85-88). IEEE.