Deriving information from CRM for knowledge management--a note on a commercial bank.(Research Paper)(customer relationship management)

INTRODUCTION

Over the last decade, the scope of enterprise information systems is enlarging and includes ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and SCM (Supply Chain Management). ERP II includes both CRM functionality that links to customers, and SCM functionality that links suppliers (Weston, 2003; Wang et al., 2005a, b; Ward et al., 2005; Wang et al., 2005b). In recent years, the competition among the commercial banks in China is getting very fierce due to the entering of banks from other countries into the Chinese banking market. The focal point of the competition is on market shares because customers are the vital resources to a bank's existence and operations. Satisfying customer needs becomes the key element for a bank to survive the competition. In this study, we focus on integrating knowledge management into CRM in the commercial banking industry using the case study approach.

Knowledge management maximizes enterprises' value through creation, communication and application of knowledge acquired when business enterprises interact with their customers. Knowledge management is a process through which banks can generate value from their intellectual assets such as customer management practices and experience. Knowledge management can help banks to create and transfer new service ideas that are generated from CRM, and can also help to manage and improve the relationships among customers, business partners and service providers (Tiwawna, 2002).

In seeking new approaches to increase or maintain market share, CRM system has been adopted by some Chinese banks as an instrument to improve customer service. Some banks have constituted CRM implementation plans and use CRM as an effective way to build up their competitive advantages. But there are not many reports on the implementation of CRM system and how to relate the results of CRM to knowledge management in order to enhance a bank's competitiveness. In this study, we report some preliminary results of utilizing the results from CRM to improve knowledge management.

The customer satisfaction index (CSI) of a bank is a tool that is used to evaluate a bank's reputation, competitiveness, and the level of service (Wang, 2003). In practice, customer satisfaction index and loyalty are a measurement of CRM. In recent years, commercial bankers in China are aware of the importance of CRM because they must cultivate a group of satisfying and loyal customers to sustain the market competition. In order to maintain long-term customers, to attract new customers, and to increase market shares, the commercial banks have established the 'customer-centred' principle and concentrated on high-quality financial products and services. Through implementing customer relationship management information systems, the banks are able to obtain customer's information at any time to meet customer's need in a timely manner (Wang, 2003). Integrating knowledge management into customer relationship management becomes necessary for commercial banks in China to discover the needs of …