Journal of Scientific and Technological Studies, 41(1), 53-63(2007) 53

A Feasibility Study of the Customer

Relationship Management Application on
Small and Medium Enterprises

1 2 3 1
Yichen Lin, JrJung Lyu, Hwan-Yann Su and Yulan Hsing
1
Graduate Institute of Technology Management, National University of Tainan
2
Department of Industrial and Information Management, National Cheng Kung University
3
Department of Asia-Pacific Industrial and Business Management, National University of Kaohsiung

Abstract
The traditional focus of IT operations no longer meets the challenges of tomorrow’s fast-changing
business environment. Conducting business through electronic commerce, the handling of transactions over
communications networks, continues to grow in a seemingly unabated fashion. In western countries, many
companies quickly grow up in a short time because of good Customer Relationship Management (CRM)
system.
Traditional enterprises such as steel companies are affected by economics desolate. This study
has deep discussion for steel companies with a broader CRM strategy aimed at maximizing the value
of the firms. The main objective of this paper is to develop a strategic CRM framework to find new
opportunities to create customer value for Taiwanese small and mediums steel companies. This study sent
the questionnaires to Taiwanese small and mediums steel companies to understand their customer-based
perspective. Moreover, successful cases in western countries are reviewed to help Taiwanese companies
build their business from a new perspective. Analysis of the field study yielded three emergent themes: the
present and future marketing strategies in Taiwanese steel company; the customer connection strategies;
and CRM total suggestions. Finally, implications for the practice and theoretical-research development of
CRM are also provided.

Key words: Customer relationship management, information technology, electronic commerce, customer
profolio
54 Journal of Scientific and Technological Studies, 41(1), 53-63(2007)

1. Introduction

Recently, companies are turning to CRM to better understand customer wants and needs. The
adoption of CRM is being fuelled by a recognition that long-term relationships with customers are one of the
most important assets of companies providing improved profitability and competitive advantage. More than
ever, enterprises are subjected to more quickly changing forces: globalization, deregulation, convergence of
industries, to name a few. CRM is a business strategy, not a specific software or hardware. Instead, it aims
to understand, anticipate and manage the needs of organizations’ current and potential customers (Brown,
2000).
CRM approach has been used for many enterprises to maintain and further create the customers.
Iron and steel is one of the most important industries in any nation, and specialty steels occupy a uniquely
critical place in the iron and steel industry. The quality of life and level of industrial development are
directly related to the availability of specialty steels in many ways. Specialty steels are essential to many
industries including motor vehicles, electrical and electronic equipment and parts, machinery, chemical
equipment, energy production, aviation and aerospace and others. While the total amount of specialty steels
is somewhat limited, they are used in a wide variety of forms and applications and involve very high levels
of technology. This study focuses on Taiwanese small and medium steel companies to see how they can
improve the relationship between companies and customers. Although this study takes Taiwanese small and
medium steel companies as examples, it still can be collated by other enterprises. In order to get a holistic
view of customers and their relationship to the entire enterprise, this paper explored three interrelated
objectives in the following.
(1) Provide a framework in making the strategic customer.
(2) Conduct a feasibility study of the CRM application on Taiwanese small and mediums steel companies.
(3) Leverage customer knowledge and find new opportunities to create value for customers.

2. Theoretical background

As the business world quickly shifts from product focus to customer focus, most companies find
that treating existing customers well will be good for profitable and sustainable revenue growth. However,
companies are challenged to really satisfy the customers in the age of electronic commerce. Customer
relationship management is an important subject more than ever before. Brown (2000) defined CRM as
‘the key competitive strategy you need to stay focused on the needs of your customers and to integrate
a customer-facing approach throughout your organization.’ The early stage of CRM is to collect potential
customers and keep customers. The middle stage of CRM is to satisfy customers and establish loyalty. The
current and future stage of CRM must include customer behavior analysis and active service. Basically,
CRM can help organizations establish long-lasting relationship with customers to improve profitability.
The reasons why organizations need CRM are to make specific selling channel resources more productive;
migrate transactions, customer relationships, and tasks to low-cost channels; get multiple sales and
service channels to work more closely with demand chain partners; and better leverage market programs
and resources. Based on customer segmentation, one-to-one marketing could be done through effective
 A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises 55

CRM strategies. Effective and efficiency customer contact such as precise and quick response could
help organizations implement CRM approach. Chatterjee (2000) emphasized that CRM is a discipline
which focused on automating and improving the business processes associated with managing customer
relationships in the area of sales, management, customer service, and support. Srivastava, Shervani
and Fahey (1999) developed a framework for understanding the integration of marketing with business
processes and shareholder value. CRM market in Asia-Pacific has been quickly growing up in these years.
In Taiwan, high technology enterprises such as Acer and Microsoft TWN had field service and sales force
automation. Vrechopoulos (2004) suggested CRM process can be applied and related to the components on
an innovative EU funded business-to-business and business-to-consumer electronic commerce application,
though the mediation of the CRM methodology. Davis and Halligan (2002) have emphasized to extend the
brand by optimizing customer relationship.
Government and some enterprises such as communication, finance and insurance companies have
already built up call center. In general, call enter is undergoing, but lacks the integrated CRM total solution.
Curry and Curry (2000) have written a clear, step-by-step guide to profiting from this exploding movement,
with strategies that are aimed at the small and medium-sized business owners who need CRM most. This
can help Taiwanese small and medium enterprises have good examples to go on CRM strategies.
Wayland and Cole (1997) have presented the Value Compass model which can make explicit
connection between what managers know about their customers and how they can leverage that information
to create customer value. In the future, customers will increasingly seek to manage the relationship
themselves, using new technologies, and that companies need to prepare themselves for their world. Lin and
Su (2003) have revised the value compass model from Wayland and Cole (1997) for the strategic analysis of
CRM. Furthermore, Lin et al. (2006) have presented the idea about the knowledge-enabled for CRM. This
paper extends the paper of Lin and Su (2003) to verify the strategic analysis of CRM for Taiwanese small
and mediums steel companies.

3. Research Design

The research structure is presented in Figure 1. This study has five stages for implementing CRM.
First, since customer connection strategy is so important, customer knowledge management, customer-
connecting technologies and customer economics in Taiwanese companies have to be reviewed. Second,
based on the value compass model, four dimensions of relationships value (customer portfolio management,
value proposition design, value-added role and reward and risk sharing) are identified. Third, taking
Taiwanese small and mediums steel companies as examples, the questionnaire is designed to understand
Taiwan status for CRM strategies. Fourth, based on the CRM experience from western countries, CRM
strategies have been recommended for Taiwanese small and mediums steel companies. Fifth, different
CRM demands lead to choose different CRM solutions to get CRM customerization. As shown in Figure 1,
each part of research structure is discussed in the following.
 are identified. Third, taking Taiwanese small and mediums steel companies as
examples, the questionnaire is designed to understand Taiwan status for CRM
strategies. Fourth, based on the CRM experience from western countries, CRM
strategies have been recommended for Taiwanese small and mediums steel companies.
Fifth, different CRM demands lead to choose different CRM solutions to get CRM
customerization. As shown in Figure 1, each part of research structure is discussed in
56 the following. Journal of Scientific and Technological Studies, 41(1), 53-63(2007)

Customer
Connection
Strategy
Question- CRM CRM
naire Strategy System
The Value Design Analysis Design
Compass
Model
Figure
Figure 1: Research
1: Research structure
structure

(1) Customer
(1) Customer connectionconnection
strategy strategy
In general,
In general, companies companies that ataremanaging
that are good good atcustomer
managing customerarerelationships
relationships are also
also good at managing
good at managing customer knowledge; using customer-connecting
customer knowledge; using customer-connecting technologies and understanding customer economics. technologies and
understanding customer economics. Arthur Andersen (1999) identified
Arthur Andersen (1999) identified that customer knowledge management could help companies assess theirthat customer
knowledge management could help companies assess their improvement. The CRM
improvement. The CRM status for business will be determined by a combination of customer knowledge;
status for business will be determined by a combination of customer knowledge;
customer-connecting technologies and customer economics.
customer-connecting technologies and customer economics.
(2) The
(2)value
Thecompass model model
value compass
There There
are fourare
dimensions in the valuein
four dimensions compass modelcompass
the value which include
model customer
whichportfolio
includemanagement;
customer
valueportfolio
proposition design; value-added role and reward and risk sharing.
management; value proposition design; value-added role and reward These four dimensions help
and risk
sharing.
business identifyThese four dimensions
the selection and management helpofbusiness
customer identify the the
relationships; selection andcontribution
business’s management to its
of customer
customers’ relationships;
value chain; the position ofthe
the business’s
company withincontribution
the industrytovalue-added
its customers’ value
chain and chain;
the basis on
the position of the company within the industry value-added chain and
which customers and suppliers interact to create and share value. Each company has to decide what set ofthe basis on
which
positions customers
is both desirable and suppliers interact to create and share value. Each company has
and attainable.
(3) Questionnaire design
This study designed a questionnaire which included three parts: part 1 collected the basic information
of companies; part 2 found out the situation of customer knowledge; customer-connecting technologies and
customer economics in companies and part 3 acquired companies’ desirable position on the value compass
model. Basically, this questionnaire aimed to discuss three questions in the following.
6H ow do Taiwanese small and mediums steel companies consider their customer connection
strategies:
6What are the current and future marketing strategies on the value compass for Taiwanese small and
mediums steel companies?
6B ased on Taiwanese small and mediums steel companies, total solution of CRM has been
recommended.
We sent the questionnaire to 70 small and medium steel companies in Taiwan, usually addressed the
envelope to CEO. Our idea was that CEO will be able to realize their customer connection and marketing
strategies.
(4) CRM strategy analysis
There are many successful cases from western countries to implement CRM approach. These examples
provide better strategies for companies to get CRM approach started. CRM strategy analysis can be carried
out to get CRM total solution.
(5) CRM system design
 A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises 57

According to ARC’s (1999) report, awareness ratio of CRM vendors is shown as follows: IBM (17%),
NCR (15%), ORACLE (13%), HP (10%), LUCENT (8%), MICEOSODT (8%), NORTEL (6%), SAS (5%),
SYBASE (4%), Other (14%) [1]. CRM system design not only identifies demand of computer software and
hardware but also enables consultant profession knowledge to make it successful. Consequently, this study
identifies the clear guideline for companies to build up CRM system. Moreover, CRM vendors also can be
chosen to do CRM customerization.

4. Research Findings and Discussion

This section deals with descriptive analysis of the questionnaire results. The questionnaires were sent
to 70 small and medium steel companies in Taiwan. There were 27 responses from these 70 companies.
While there were total 27 responses to 70 questionnaires, for a response rate of 39 percent, only 23 of the
returned questionnaires were suitable for use in this study. We now carry out the analysis of customer
connection strategies and position on the value compass.

4.1 Customer connection strategies

Figure 2 shows how these Taiwanese small and mediums steel companies consider their customer
connection strategies. According to Figure 2, these companies have done 51% for customer knowledge;
81% for customer-connective technologies and 78% for customer economics.

(1) Customer knowledge

As shown in Figure 2, there are just half of the respondents who care about customer knowledge.
Wayland and Cole (1997) have suggested how companies could execute and effective CRM process through
planning; focusing; generating; codifying; sharing and leveraging. Since Taiwanese small and mediums
steel companies have done 51% for customer knowledge, Wayland and Cole’s suggestion might help them
build up knowledge management system that captures information, creates knowledge, share and leverage
knowledge. Some suggestions are identified in the following.
6Building the stock of knowledge. The purposes of this suggestion are to identify what companies
already know about their customers and to build speculative knowledge to support longer-range
planning.
6Generating knowledge at the right level and depth. It is necessary to identify the level at which
companies have to generate knowledge and to decide the depth of knowledge companies have.
6Generating the right kind of knowledge. It is important to generate the right kind of knowledge
through understanding what customers want via dialogue; observing how customers use products
and services and designing analysis model to predict likely outcomes.
6Leveraging knowledge. Many companies may just realize who the customers are and what they
want, but customer knowledge has to be more extensive to leverage.
6Application of knowledge management model. Arthur Anderson (1999) presented a knowledge
management model that can help companies to keep knowledge between companies and customers.
(2) Customer-connective technologies
 customers are and what they want, but customer knowledge has to be more
extensive to leverage.
z Application of knowledge management model. Arthur Anderson (1999)
presented a knowledge management model that can help companies to keep
knowledge between companies and customers.
(2) Customer-connective technologies
Journal of Scientific and Technological Studies, 41(1), 53-63(2007)
58
As shown in Figure 2, the strategy of customer-connective technologies has the
highest proportion (81%) than the other two strategies. Customer-connective
As shown in Figure the
technologies, 2, the strategyorofelectronic
physical customer-connective technologies
links between has theand
customers highest proportion
companies,
(81%) thancan support longer-range planning. Basically, technologies could be applied links
the other two strategies. Customer-connective technologies, the physical or electronic in
between customers
the customer relationship to increase the value of relationship. Some suggestionsbe
and companies, can support longer-range planning. Basically, technologies could
applied inare
thepresented in the following.
customer relationship to increase the value of relationship. Some suggestions are presented in
the following.

˄˃˃ʸ
ˋ˄ʸ ˊˋʸ
ˋ˃ʸ 51%
ˉ˃ʸ
ˇ˃ʸ

˅˃ʸ

˃ʸ
˖̈̆̇̂̀˸̅ʳ˞́̂̊˿˸˷˺˸ ˖̈̆̇̂̀˸̅ʳ˖̂́́˸˶̇˼̉˸ ˖̈̆̇̂̀˸̅ʳ˘˶̂́̂̀˼˶̆
˧˸˶˻́̂˿̂˺˼˸̆

Figure
Figure 2:2:Customer
Customer connection
connection strategies
strategies

6Identifying
z Identifying the main
the main purposes. purposes.
The main purposesThe main inpurposes
in investing in investing
customer-connective in
technologies
customer-connective
have to be identified to maximize technologies have
the value exchange withtothebecustomer
identified to maximize the
6Buildingvalue exchange
up a feedback with
loop. Thethe customer
feedback loop can deliver the right message to particular customer
z Building up a feedback loop. The feedback
and allow the marketer to build profiles of customers over time. loop can deliver the right
message to particular customer and allow
6Setting new database systems and agent technologies. These thetechnologies
marketer allow
to build profiles
companies of
to tailor
customers
World Wide Web sitesover time. customers.
to individual
6Conducting on-line relationship. Itsystems
z Setting new database and agent technologies. These technologies
is important to create mutual value and strengthen bounds to
allow companies to tailor World Wide Web sites to individual customers.
engage in E-commerce for extending market share.
z Conducting on-line relationship. It is important to create mutual value and
(3) Customer economics
strengthen bounds to engage in E-commerce for extending market share.
Based on Figure 2, Taiwanese small and medium steel companies have done 78% for customer
economics. Customer economics means the analysis of the value of companies in terms of the number and
quality of their relationships. Some suggestions are identified in the following.
6Estimating the value of customer relationships. The volume, margin and duration model and the
probability-of-purchase model have to be used to estimate the value of customer relationships.
6Understanding the distribution of customer relationship value. It is important to gain insights of
customer relationships through understanding the distribution of customer relationship value.
6M anaging the Customer por tfolio for maximum growth. Based on customer value and
responsiveness, business has to manage the customer portfolio for maximum growth.

4.2 The value compass

The current and future positions for Taiwanese small and medium steel companies on the value
compass have been shown in Table 1 and Table 2. Furthermore, some successful cases from western
countries could be good examples to help Taiwanese small and medium steel companies identify CRM
 A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises 59

strategies. According to four dimensions of the value compass, a set of positions for Taiwanese small and
medium steel companies are analyzed in the following.

Table 1: The current and future positions on the value compass model
Position
Market Group Individual CoreProduct Extended Offer Total Solution
Situation
Present 10 6 7 6 10 7
Future 12 6 5 6 8 9

Table 2: The current and future positions on the value compass model
Position
Product Manager Process Manager Network Manager Neutral Performance Outcome
Situation
Present 12 11 0 13 8 2
Future 10 8 5 10 4 9

(1) Customer portfolio management

As shown in Figure 3 and 4, it can be seen that about 44 percent of the 23 respondents currently choose
market level; 26 percent of the 23 respondents choose group level and 30 percent of the 23 respondents
choose individual level. In the future, 52 percent of the 23 respondents choose market level, 26 percent
of the 23 respondents choose group level and 22 percent of the 23 respondents choose individual level.
Consequently, the current and future positions that the 23 respondents choose are market level. Clearly, the
markets broadly, making few distinctions among customers for their products.
larger proportions
Learning of the
fromrespondents choose market
the experience of level in the future
western and thesome
countries, smallersuggestions
of the respondents
are
choose individual level. It is proved
presented in the following. that these companies still approach their markets broadly, making few
distinctionszamong customersthe
Attracting forlargest
their products.
share of Learning from the experience
the company’s potential of western countries,
customer base. some
Offering a moderate level of product variety might be more effective than
suggestionszare presented in the following.
fragmenting
6Attracting the largest sharethe of
customer portfolio.
the company’s potential customer base.
z Achieving
6Offering a moderate level the ofmost efficient
product levelsbeofmore
variety might operation
effective when producingtheacustomer
than fragmenting fairly
uniform
portfolio. product in large volumes, despite the promise of and recent
6Achievingadvances
the most in flexible
efficient manufacturing.
levels of operation when producing a fairly uniform product in large
z Relying on brand image
volumes, despite the promise of and recent and customer
advances inself-selection.
flexible manufacturing.
z Applying the strategy that the
6Relying on brand image and customer self-selection. right market is targeted with the right product
and image.
6Applying the strategy that the right market is targeted with the right product and image.
z Not trying to distinguish and manage relationships with several different
6Not trying to distinguish and manage relationships with several different customer groups.
customer groups.
˜́˷˼̉˼˷̈˴˿
˜́˷˼̉˼˷̈˴˿ ˅˅ʸ
ˆ˃ʸ ˠ˴̅˾˸̇
ˇˇʸ
ˠ˴̅˾˸̇
ˈ˅ʸ
˚̅̂̈̃
˚̅̂̈̃
˅ˉʸ
˅ˉʸ
Figure 3:3:Customer
Figure Customerportfolio
portfoliomanagement
management(current)
(current)Figure
Figure4:4:Customer
Customerportfolio
portfoliomanagement
management (future)
(future)

(2) Value proposition design

As shown in Figure 5 and 6, it can be seen that about 26 percent of the 23
respondents currently choose core product level; 44 percent of the 23
respondents choose extended offer level and 30 percent of the 23 respondents
choose total solution level. In the future, 26 percent of the 23 respondents choose
core product level, 35 percent of the 23 respondents choose extended offer level
60 Journal of Scientific and Technological Studies, 41(1), 53-63(2007)

(2) Value proposition design

As shown in Figure 5 and 6, it can be seen that about 26 percent of the 23 respondents currently
choose core product level; 44 percent of the 23 respondents choose extended offer level and 30 percent
of the 23 respondents choose total solution level. In the future, 26 percent of the 23 respondents choose
core product level, 35 percent of the 23 respondents choose extended offer level and 39 percent of the 23
respondents choose total solution level. Consequently, the strategy that the 23 respondents choose have
moved from extended offer level (current) to total solution level (future). Clearly, the larger proportions of
the respondents choose total solution level in the future and the smaller propositions of the respondents
choose extended offer level. In general, business can better assess the value it is creating for customers
and can identify opportunities to increase the value through realizing the customers’ value chain and total
experience. In the future, Taiwanese small and medium steel companies most likely choose all three level
of the value proposition design. Some suggestions are presented in the following.
6Using information and knowledge to enhance the value proposition.
6Enhancing the core product.
6Understanding the buyer’s criteria for the original component of the value chain.
6Appreciating the customer’s value criteria and decision-making process for the other factors in his
value chain or experience.
6Getting the buyer aware more information about the seller.
6Extending the range of its offer

˖̂̅˸ ˖̂̅˸
˧̂̇˴˿ ˧̂̇˴˿
ˣ̅̂˷̈˶̇ ˣ̅̂˷̈˶̇
˦˷̈̇˼̂́ ˦˷̈̇˼̂́
˅ˉʸ ˅ˉʸ
ˆ˃ʸ ˆˌʸ

˘̋̇˸́˷˸˷ ˘̋̇˸́˷˸˷
ˢ˹˹˸̅ ˢ˹˹˸̅
ˇˇʸ ˆˈʸ

Figure
Figure 5: Value
5: Value proposition
proposition design
design (current)
(current) Figure6:6:Value
Figure Valueproposition
propositiondesign
design(future)
(future)

(3) Value-added
(3) Value-added role role
As shown
As shown in Figure in 7Figure
and 8, 7it can
and be8,seen
it can
that be
aboutseen
52 that
percentabout
of the5223percent of the
respondents 23
currently
respondents
choose product manager currently choose
level; 48 percent of theproduct manager
23 respondents chooselevel; 48manager
process percentlevel
ofand
thenone
23 of
respondents choose process manager level and none of the 23
the 23 respondents choose network manager level. In the future, 43 percent of the 23 respondents chooserespondents
chooselevel,
product manager network manager
35 percent level.
of the 23 In the choose
respondents future,process
43 percent
manager oflevel
the and
23 22
respondents
percent of the
choose product manager level, 35 percent of the 23 respondents choose process
23 respondents choose network manager level. Consequently, the current and future positions that the 23
manager level and 22 percent of the 23 respondents choose network manager
respondents choose are product manager level. Clearly, the smaller proportion of the respondents choose
level. Consequently, the current and future positions that the 23 respondents
product and process manager level in the future. In particular, there is not any company that currently
choose are product manager level. Clearly, the smaller proportion of the
chooses network manager
respondents level. However,
choose product there are 22% manager
and process of the respondents
level in who will wantIntoparticular,
the future. get network
manager there
level. Based on the experience from western countries, some
is not any company that currently chooses network manager level. suggestions are presented in the
following.However, there are 22% of the respondents who will want to get network
6Increasing
managerapplication
level. ofBased on and
information the technology
experience from
to forge western countries,
new relationships some
and partnerships.
suggestions
6Adding value to are presented
company’s core in the following.
product.
z Increasing
6Assuming application
responsibility of of
for some portion information and technology
the buyer’s production to forge
function or value chain. new
relationships and partnerships.
6Providing both buyers and sellers a form of connection more efficient than either can achieve by
z Adding value to company’s core product.
z Assuming responsibility for some portion of the buyer’s production
function or value chain.
z Providing both buyers and sellers a form of connection more efficient than
either can achieve by operating independently.
z Extracting a portion of the buyer’s consumer surplus or the seller’s
 suggestions are presented in the following.
z Increasing application of information and technology to forge new
relationships and partnerships.
z Adding value to company’s core product.
z Assuming responsibility for some portion of the buyer’s production
A Feasibilityfunction orCustomer
Study of the value chain.
Relationship Management Application on Small and Medium Enterprises 61
z Providing both buyers and sellers a form of connection more efficient than
operating either can achieve by operating independently.
independently.
z Extracting a portion of the buyer’s consumer surplus or the seller’s
6Extracting a portion of the buyer’s consumer surplus or the seller’s producers’ surplus.
producers’ surplus.
6Adding capacity exists in the seller’s industry.
z Adding capacity exists in the seller’s industry.
6Enjoying a knowledge-based advantage over the buyer.
z Enjoying a knowledge-based advantage over the buyer.
6Improving
z Improving operating efficiency
operatingand expandingand
efficiency professional
expandingcapacity.
professional capacity.
ˡ˸̇̊̂̅˾
ˡ˸̇̊̂̅˾ ˣ̅̂˷̈˶̇
ˠ˴́˺˸̅
ˠ˴́˺˸̅ ˠ˴́˴˺˸̅
˃ʸ
ˣ̅̂˶˸̆̆ ˅˅ʸ ˇˆʸ
ˠ˴́˴˺˸̅
ˣ̅̂˷̈˶̇
ˇˋʸ ˣ̅̂˶˸̆̆
ˠ˴́˴˺˸̅
ˈ˅ʸ ˠ˴́˴˺˸̅
ˆˈʸ
Figure 7:Figure 7: Value-added
Value-added role (current)
role (current) Figure
Figure 8: Value-added
8: Value-added role (future)
role (future)

4.3 Reward and risk sharing 4.3 Reward and risk sharing
As shown in Figure 9 and 10, it can be seen that about 56 percent of the 23
respondents currently
As shown in Figure choose
9 and neutral
10, it can level;
be seen that 35 percent
about of the
56 percent 23 23
of the respondents
respondentschoose
currently
performance
respondents
choose level
choose
neutral level; and 9 percent
performance
35 percent of the 23
level and 39
of the 23 respondents respondents
percent
choose choose outcome
of the level
performance level.
23 respondents In the
and 9 percentchoose
of the23
future, 44 percent
outcomechoose
respondents of
level.outcome the
Consequently, 23 respondents
the future,
level. In the choose
current44and neutral
future
percent level,
positions
of the 17 percent
that thechoose
23 respondents of the
23 respondents 23
neutral level,
chooseofare
17 percent the neutral level. choose
23 respondents Clearly, the largerlevel
performance proportions
and 39 percent of the respondents
of the choose
23 respondents choose
outcome
outcome level. level in the future
Consequently, and and
the current thefuture
smaller propositions
positions that the 23ofrespondents
the respondents choose
choose are neutral
neutral and performance level. It means that these companies want a mutual
level. Clearly, the larger proportions of the respondents choose outcome level in the future and the smaller
investment
propositions of thebyrespondents
both the choose
buyer neutral
and seller in anticipation
and performance level. of a future
It means that payoff. Based on
these companies want
the experience
a mutual investment by from
both thewestern
buyer andcountries, some suggestions
seller in anticipation are Based
of a future payoff. presented in the
on the experience
following.
from western countries, some suggestions are presented in the following.
(1) Defining clearly what is meant by the value created in a relationship, what
(1) Defining clearly what is meant by the value created in a relationship, what constitutes the shares of the
constitutes the shares of the value received by buyer and seller and how the shares
valuecan
received by buyer and seller and how the shares can be changed.
be changed.
(2) Offering severalseveral
(2) Offering manufacturing and engineering
manufacturing companies thecompanies
and engineering opportunity theto share in the revenue
opportunity to
flow.share in the revenue flow.

ˢ̈̇˶̂̀˸
ˌʸ ˢ̈̇˶̂̀˸ ˡ˸̈̇̅˴˿
ˆˌʸ ˇˇʸ

ˣ˸̅˹̂̅̀˴́˶˸ ˡ˸̈̇̅˴˿
ˆˈʸ ˈˉʸ ˣ˸̅˹̂̅̀˴́˶˸
˄ˊʸ

Figure9:9:Reward
Figure Rewardand
andrisk
risksharing
sharing(current)
(current) Figure
Figure 10:10: Reward
Reward and
and risk
risk sharing
sharing (future)
(future)

4.4 CRM system design 4.4 CRM system design

As mentioned earlier, there are many vendors who provide CRM solution. The
answer to how
As mentioned to choose
earlier, there areCRM
many system willprovide
vendors who depend CRMonsolution.
the original MIS tosystem
The answer that
how to choose
exists
CRM systemin will
a company.
depend on Through theMIS
the original analysis
system of
thatCRM
exists strategies, theThrough
in a company. demand theofanalysis
CRM of
system could be identified and furthermore customerization could be done. In the
CRM strategies, the demand of CRM system could be identified and furthermore customerization could be
beginning of building up CRM system, it costs a lot of money that may keep
Taiwanese small and medium steel companies away from it. However, minimum
CRM could be done to show up a blue-picture for the future.

5. Conclusion
Customer relationship management is neither a concept nor a project. Actually, it
62 Journal of Scientific and Technological Studies, 41(1), 53-63(2007)

done. In the beginning of building up CRM system, it costs a lot of money that may keep Taiwanese small
and medium steel companies away from it. However, minimum CRM could be done to show up a blue-
picture for the future.

5. Conclusion

Customer relationship management is neither a concept nor a project. Actually, it is a business strategy
to help companies understand and anticipate the need of an enterprise’s current and potential customers.
Some points are concluded in the following.
(1) There are just half of the respondents who care about customer knowledge. Most likely, these companies
do not realize the importance of customer knowledge and even don’t know how it works. However, it is
time for awareness of customer knowledge. In the future, customer relationship management together
with knowledge management will help companies accumulate customer knowledge and furthermore
build up good relationships between companies and customers.
(2) Although the respondents have higher proportion for customer-connective technologies, it is important
to create mutual value and strengthen bounds to engage in E-commerce for extending market share.
(3) The respondents have shown up that they understanding the distribution of customer relationship
value because of higher proportion for customer economics. However, the companies can furthermore
maximize their rate of profitable growth by deploying their resources in proportion to the value of
relationships.
(4) Basically, Taiwanese small and medium steel companies want to stay where they are on the value
compass. But the strategy of value proposition design has been changed from extended offer level to
total solution level. Consequently, three components of a total solution strategy can be considered:
leverageable competencies, reputation, and identification with the customer base.
(5) None of the respondents has built up CRM system. Although it is still a long way to go to get CRM
system ready, the support from government will be necessary.
(6) Taiwanese small and medium steel companies lack in strategic league and competitive ability. They
might think something more to upgrade to a new perspective for the demand of global E-commerce.
Recently, many Taiwanese companies have built up Enterprise Resource Planning (ERP) system and
furthermore identify the demands of Supply Chain Management (SCM). New stage will go for building up
Customer Relationship Management (CRM) system. This study collected the information about CRM and
take Taiwanese small and medium steel companies as examples. However, this new research can be collated
by other enterprises to enhance enterprise’s competitive strength. In this changeable and competitive world,
it is necessary to develop a e-business to save cost and make business upgrade to a new perspective. Tiwana
(2000) presented a real-world guide to the essential principles of Knowledge Management (KM). This book
shows how KM and CRM technologies work, and how they impact existing processes and IT infrastructure.
Lin (2000) presented a systemic integrated communications model that might help enterprises identify
the issue of CRM and furthermore tackle these issues. Su and Lin (2006) proposed the framework of
corporate knowledge management for enhancing knowledge-based service quality of franchise stores.
This study indicated Knowledge management can provide businesses with many competitive advantages
including average level of knowledge enhancement, service quality improvement, cost and time reduction,
 A Feasibility Study of the Customer Relationship Management Application on Small and Medium Enterprises 63

strengthened relationships among colleagues and quicker knowledge creation. So CRM together with
KM could be further studied to leverage enterprise’s strengths, maximize employees efforts and deepen
customer loyalty.

Acknowledgement

Supported by National Scientific Council (Taiwan) under grant 95-2416-H-024-001.

References

ARC, (1999). Integrating Strategy. Technology & Process to Implement e-Customer Relationship
Management. eBusiness Executive Report, 3, pp.13.
Arthur Andersen Business Consulting, (1999) Knowledge Management: Jissen No Tame No Best Practice.
Tokyo: Toyo Keizai.
Brown, S. A. (2000). Customer Relationship Management: A Strategic Imperative in the World of e-Business.
Canada: John Wiley & Sons.
Chatterjee, J. (2000). Managing customer relationships in the e-business economy. Journal of Scientific &
Industrial Research, Aug-Sep, 749-752.
Curry, J. and Curry, A. (2000). The Customer Marketing Method. New York: The Free Press.
Davis, S. and Halligan, C. (2002). Extending your brand by optimizing your customer relationship. Journal
of Consumer Marketing, 19(1), 7-11.
Lin, Y. (2000/2001). Assessing the applicability of integrated communications: a systemic view. Journal of
Integrated Communications, 46-51.
Lin, Y. and Su, H. (2003). Strategic analysis of Customer Relationship Management - a field study on hotel
enterprises. Total Quality Management, 14(6), 715-731.
Lin, Y., Su, H. and Chien, S. (2006). A knowledge-enabled procedure for Customer Relationship
Management. Industrial Marketing Management, 35(4), 446-456.
Srivastava, R. K., Shervani, T. A. and Fahey, L. (1999). Marketing, business processes, and shareholder
value: An organizationally embedded view of marketing activities and the discipline of marketing.
Journal of Marketing, 63, 168-179.
Su, H. and Lin, Y. (2006). Enhancing knowledge-based service quality: a knowledge management
perspective. The Service Industries Journal, 26(7), 1-15.
Tiwana, A. (2000). The Essential Guide to Knowledge Management, e-Business and CRM Applications.
Upper Saddle River: Prentice-Hall.
Vrechopoulos, A. (2004). Mass customisation challenges in Internet retailing through information
management. International Journal of Information Management, 24(1), 59-71.
Wayland, R. and Cole, P. (1997). Customer Connections: New Strategies for Growth, Boston: Harvard
Business School Press.
Submission Date: 2006/11/15
Revision Date: 2007/1/18
Acceptance Date:2007/3/8