This research tries to identify and validate the main factors that
relate (directly or indirectly) to the adoption of Customer Relationship
Management (CRM) systems by Small and Medium-sized Enterprises
(SMEs). In doing so, the work provides deeper and broader
understanding, which not only allows other practitioners to relate
their experiences to those reported in this work, but also serve as a
frame of reference for decision makers responsible for adoption of
CRM innovations. While seeking to identify and validate the factors
influencing CRM adoption in SMEs, it is outside the scope of this paper
to discuss the actual direct effects of these factors on the adoption
process or investigate their inter-relationships.
CRM and SMEs
The shift from a product-oriented business strategy to a customerfocused
relationship strategy has been identified as a major change
agent in companies in prior literature (Barnes, 2001; Goodhue,
Wixom, & Watson, 2002; Hopkins, 2000; Knox, Maklan, Payne,
Peppard, & Ryals, 2003; Ryals, Knox, & Maklan, 2001). Business
organisations have been investing heavily in business intelligence
technologies, to enable a customer-focused relationship strategy
(Swift, 2002). As a result, Customer Relationship Management
(CRM) emerged, promising to significantly improve the implementation
of relationship marketing principles (Ryals et al., 2001). The
attention of software vendors has moved recently to Small and
Medium-sized Enterprises (or SMEs), offering them a wide range of
CRM systems which were formerly adopted by large firms only. SMEs
are considered as major economic players and a potential source of
national, regional and local economic growth (Taylor & Murphy,
2004). SMEs differ from large enterprises mainly in their limited
financial abilities affecting their information-seeking practices, and
they do not normally have the same burden of large legacy systems to
integrate their CRM (Lang & Calantone, 1997). Thus, the adoption of
CRM in SMEs cannot be a miniaturised version of larger organisations.
Like in large organisations, CRM provides SMEs with opportunities
that are still largely unexploited (Horowitz, 2005). However, without a
better understanding of the complex issues involved, the drive to
implement CRM will not successfully contribute to SMEs' competitiveness
(King & Burgess, 2008). To survive in the global markets,
many Small and Medium-sized Enterprises (SMEs) have implemented
CRM, so that they can compete effectively (Ramdani, Kawalek, &
Lorenzo, 2009). Moreover, studies indicate that there are mixed results
as to how successful organisations have been implementing CRM
solutions (Goodhue et al., 2002; Alferoff & Knights, 2008). Clearly, the
challenge of managing the complex data quality issues involved has
been raised as a potentially important factor affecting the successful
outcome of CRM efforts (Friedman, 2009). In fact, it is reported that
more than half of CRM projects are failing because of the complex data
quality issues involved (Kaila & Goldman, 2006).
3. Technology adoption
Several studies on the adoption of enterprise Information and
Communication Technologies (ICT)-based technologies such as CRM
and ERP (Hashim, 2007; Irani & Love, 2001; Themistocleous, 2004),
indicate that there is a number of different factors that can influence
the adoption of ICT-based innovations in organisations. Studies by Lin
(2006) indicate that the size of organisation, among other factors, has a
strong influence on how these factors affect the adoption process. In
addition, Kimberly and Evanisko (1981) and Chen and Popovich
(2003) reported organisations' size as an important factor for the
adoption of technological, administrative innovations and web
services in organisations. However, as Levy, Powell, and Yetton
(2001) find, size is not a determinant of ICT adoption, but the owners'
knowledge of ICT and attitude to growth dominate.
Hashim (2007) reports that studies by (Pavic, Koh, Simpson, &
Padmore, 2007) show that the adoption of ICT-based technologies by
SMEs is still lower than expected and several barriers to ICT adoption
have been identified by (Blackburn & Athayde, 2000; Cavalcanti,
2006; Ndubisi & Jantan, 2003; Utomo, 2001). These barriers include
lack of knowledge about the potential of ICT-based technologies,
shortage of resources such as financial and expertise, lack of necessary
operating skills among staff and lack of management support. Many
organisations conduct a Cost Benefit Analysis (CBA) before adopting a
new technology. Thus, several authors such as Iacovou, Benbasat, and
Dexter (1985), and Wu (2004) have identified cost as a factor for the
adoption of technologies, which facilitates the organisation to
evaluate these costs prior to adoption. In doing so, Themistocleous
(2004) evaluate enterprise application integration (EAI) costs, and
classify them using the costs classification proposed by Irani,
Ezingeard, and Grieve (1997).
Studies that focused on identifying external factors that influence
ICT adoption in organisations indicate that external factors such as
government policies, as well as competition, suppliers, software
vendors, and customers attitude pressures have a direct influence on
the adoption and implementation of ICT technologies, especially in
CRM and e-commerce related applications (Hashim, 2007; Wilson,
Danial, & McDonald, 2002; Dasgupta, 2000; Lai & Hsieh, 2007; Scupola,
2003). A study by Themistocleous (2004) identified organisational
factors such as organisation support and management support which
can influence the adoption of enterprise ICT integration. Lucchetti and
Sterlacchini (2004) identify financial resources and technical skills as
factors affecting ICT adoption among SMEs. Seyal, Abd Rahman and Hj
Awg Mohamad (2007) find that management support, government
support, and perceived benefits are significant predictors that
influenced SMEs to adopt ICT. Levy et al. (2001) add that adoption of
ICT related technologies relate to the organisation strategic focus and
customer domination.
Several authors have reported the ICT infrastructure as a factor in
their integration technologies adoption models. Grimson, Grimson,
and Hasselbring (2000) reported non-integrated IT infrastructures in
organisations as a key obstacle in providing better performance. The
level of integration between processes was also identified by Chen
(2003) as an important factor to achieve successful CRM adoption.
Benefits refer to the level of recognition of the advantages that ICT
technologies could provide to organisations, and Shang and Seddon
(2002) introduced a benefit classification model developed by for the
adoption of enterprise systems. Iacovou et al. (1985), in their model of
Electronic Data Interchange (EDI) adoption, classified perceived
benefits into direct and indirect. In the context of organisational
system integration adoption in multinational and public organisations,
Themistocleous (2004) categorised the benefits as: (a) operational
(b) technical (c) strategic (d) managerial and (e) organisational. King
and Burgess (2008) proposed a model ofCRMinnovation in their study
of critical success factors for CRM adoption which indicates that
organisational context and top management support play a role in
CRM innovations. Wilson et al. (2002) also emphasise the importance
of considering the project management perspective besides the IT
perspective when implementingCRMand ERP technologies, and argue
that overlooking implementation related management can have
severe consequences despite the employment of modern technology.
Few studies have examined the relationship between ICT skills and ICT
adoption. Shiels, Mclvor, and O'Reilly (2003), for example, assert that
strong ICT capability including the specific ICT skills of small firm
owners/managers has significant influence on the adoption of ICT. In
fact, Wainwright, Green, Mitchell, and Yarrow (2005) add that
managerial ICT skills, ICT knowledge, and ICT practices are important
determinants of whether ICT is adopted or rejected by the SMEs. This is
also supported by Levy and Powell (2003) who found that owner
attitude influences ICT adoption, particularly in Internet related
technology, and by Hashim (2007) who states that the level of ICT
knowledge among managers has a leaner relationship with how early
(or late) the adoption of new innovations can take place.
Due to the diversity of EAI products and technologies available,
there appears to be a market confusion surrounding the adoption of
ICT related technologies and packages. In addressing this issue,
Themistocleous (2004) indicates that the adoption of evaluation
frameworks facilitates organisations to overcome the confusion
regarding the selection of ICT related technologies and packages. As
a result, these evaluation frameworks are considered as a factor for the
adoption of ICT technology.
4. The relationship between data quality and CRM
Researchers and practitioners studying or dealing with the impact
of data quality on Business Intelligence (BI) applications in general,
and enterprise-wide CRM efforts in particular, often assume that the
common language provided by data quality tools and processes exists,
or that they will be developed because of the benefits of increased
communication within (or across) the whole organisation (Malone,
Yates, & Benjamin, 1987; Huber, 1990; Goodhue, Wybo, & Kirsch,
1992). However, there is evidence that this common language of
logically compatible data does not exist in a great many organisations
that have implemented BI applications in general, and CRM in
particular (Gartner Report, 2002; Nelson, Singhal, Janowski, & Frey,
2001; Goodhue et al., 2002; Eckerson, 2004).
It is widely reported that poor data quality can have a severe impact
on the overall performance of an organisation (Eckerson, 2002). For
example, within a single organisation even minor inconsistencies in
key business entities identifiers, such as customer,