It must be noted however, that healthcare organizations have achieved a level of understanding of the importance of CRM from the fundamental understanding of the CRM life cycle.
The CRM lifecycle is a commencement of the combined systems and information that the business organization possesses. The first phase of the CRM lifecycle deals with integrating information and business processes. The advantage of the first phase of CRM is the improvement in both the efficiency and productivity of the business organization, from the mere understanding of the customer information the business organization holds. The completion of the first phase of the CRM lifecycle results in the centralization of customer related information. In addition, the first phase of the CRM lifecycle also results in the understanding of the customer’s value to the organization, as reported by Cheung and Stephens in their study conducted in 2009 (Cehung & Stephens, 2009).
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The second phase of the CRM lifecycle is the analysis phase. The second phase of the CRM lifecycle is the most important phase. This phase analyses the critical components of the CRM elements or components that are needed to ensure success. The second phase of the CRM lifecycle helps the business organization develop the strategic decisions based on the relationships existing between the customers and the service providers. The analysis phase also reveals the specific customer behaviors, patterns, trends and other key indicators that help the business organization understand the causal nature of the relationship between customers and the business organization. These findings are generally discussed in a study conducted by Cheung and Stephens in 2009.
Finally, the last phase of the CRM lifecycle takes the information analyzed and the strategies crafted into action. The last phase of the CRM lifecycle carries out the results of the analysis and strategic formulation by implementing key activities that include specific action for the marketing, sales and post-sales customer services departments of the business organization. The last phase of the CRM life cycle closes the loop and provides the greatest value by to the customers and to the business organization.
A summary of the CRM lifecycle is shown in Figure 1 the CRM Life Cycle.
Figure 1 the CRM Life Cycle
There are numerous examples of CRM successes in the healthcare services industry. However, there are also large sample set of CRM failures. There are numerous reports that highlight how organizations have failed to adopt a workable CRM strategy. The reasons behind the failure of business organizations to implement a CRM strategy can be generalized as the failure that is due to the attitude, behavior and culture of the organization and the failure do the misconception of CRM strategies as merely technological strategies with no long-term implications or measurable results. These failures were summarized in a study conducted by Paul Greenberg in 2004 (Greenberg, 2004).
The failure of these organizations highlights the importance of managing change within the organization. According to a study conducted by Greenberg in 2009, organizational change is the expected result of implementing a CRM initiative. Therefore, the effective approach to crafting a CRM strategy is the examination of the organizational development strategies that affect the business organization’s people, culture and processes.
In healthcare organizations, the effect of organizational development and organization proved to be critical to effectively administering CRM strategies. Like any other service-oriented industry, the healthcare industry faced numerous challenges before CRM was fully accepted, promoted and practiced. The healthcare industry is a complex industry. According to a study published in 1999 by Raghupathi and Tan, the healthcare industry was lagging behind other service-driven industries such as the finance and banking, airline, manufacturing, as well as other service industries back in 1999.
In addition, the healthcare industry back in 1999 was challenged by dwindling national healthcare budgets, the virtual removal of competitive advantages and prevalence of new health concerns and requirements that were affecting national economies. Raghupathi and Tan reports than in 1999, the healthcare industry seriously started applying technology as one way of improving business performance. Their report states that as much as US$ 14 billion per year was devoted to technological applications for the healthcare industry in the United States alone. The technology that healthcare organizations applied involved technologies for managing client records, for organizing and sharing information, for providing remote diagnostic capabilities, for client feedback, among others. The result of this massive investment in the United States was significant growth in terms of revenues and quality of services. The investment also paved the way for additional opportunities in the healthcare sector. The growth of the healthcare sector has in fact helped the United States generate more jobs and income as shown in Figure 2 Employment Growth in the US Healthcare Sector Versus Other Industries. The graph states that the United States’ healthcare industry has driven employment opportunities faster than all other industries in the country. The growth is sustained in the last ten years and shows no sign of falling (Thompson, 2014).
Figure 2 Employment Growth in the US Healthcare Sector versus Other Industries
The reason behind the amazing growth is simple. The healthcare industry is undergoing a shift from being an “industrial” provider of service to an “information-driven” sector (Smith, 1997). The paradigm shift that the healthcare industry is helping to reshape the healthcare systems around the world and transforming how customers develop and maintain their relationships with healthcare organizations. The transformation of customer-healthcare professional relationship is supported by a study conducted by Ball and Lillis in 2001 on what they call as “E-Health” or the medical relationship between the physician and the physician’s patient.
The importance of a high quality healthcare system is necessary for ensuring growth in the economy. In the United States, serious problems with healthcare and healthcare services quality are identified by government and private agencies. The US Federal Government utilizes quality improvement strategies to address healthcare deficiencies. Quality improvement strategies rely on databases to provide immediate systematic relief for service sectors. Fortunately, change has always been a part of the healthcare system, due to the many developments in healthcare in the last decade. Quality improvement takes advantage of these changes and enables the health care systems to enhance their services through the application of new knowledge, technologies, or approaches to healthcare delivery. Quality improvements address issues in a systematic and orderly manner and enable the industry to assess and evaluate the impact of the proposed changes. These changes are fed back into the system enabling healthcare participants to make suitable changes and small adjustments to come to satisfactory outputs. The benefits translate directly to healthcare recipients.
In the last decade, quality improvements in the medical field have achieved significant success. However, there are still several hindrances to full implementation of quality improvement strategies. Some of the hindrances for implementing full quality improvement strategies are regulatory in nature due to the sensitive nature of healthcare information. However, these can be overcome because the urgency for improving healthcare services is recognized as a critical factor behind national economic success.
A very good example of this shift to an information age for the healthcare industry is the use of the World Wide Web in managing healthcare information. Powell, Darvell and Gray stated that the World Wide Web has changed the healthcare-patient relationship worldwide simply by engaging both the healthcare professional and the healthcare professional’s clients through the provision of accessible information. This is supported by a study conducted by the Pew on the Internet and American Life Project in 2005. According to this report, a large number of internet users claim that their primary use for the internet is to acquire information about healthcare. While this may no longer be true today, the fact that people utilize the internet for acquiring information on healthcare and healthcare services is significant.
In a study conducted by Batista in 2010, internet usage was found to be the most important medium for CRM. The study concluded that the power of the web is evident in service-oriented organizations because it gives these organizations the capability to enhance and strengthen the causal relationship that exists between the healthcare professional and the healthcare professional’s clients (Batista, 2010). The study further highlights the customizable application of CRM to improve the relationship between healthcare professionals and their clients.
Figure 3 Sample CRM process
The process shown in Figure 3 Sample CRM process indicates how CRM can be used to improve the relationship between the healthcare provider and the healthcare provider’s customers. The CRM process highlights the fact that healthcare professionals can go beyond simply treating patients. In the example shown, the CRM process enables the healthcare professional to provide proactive healthcare treatments thereby establishing a better, longer-term and more productive healthcare relationship. As a matter of fact, healthcare professionals can improve their relationships with their patients through an increase in the level of satisfaction of the patients, by coordinating the delivery of health care, and by having a proactive approach to clinical treatment, especially for chronically ill patients. Patient satisfaction is increased when the processing time for patient treatment is shortened. This is accomplished when unnecessary tasks are removed from the entire treatment process. The result of the time saved from the removal of the unnecessary tasks is an increase in the level of customer satisfaction.
The automation of care coordination is another way of improving customer satisfaction. With a coordinate delivery of healthcare, workflows can be modified such that costs are reduced and operational efficiencies are achieved. In addition, a proactive approach to managing chronically ill patients can be achieved as well. With effective information exchange, patients can be flagged and their treatments can be automated, analysed collectively and coordinate through several healthcare organizations to effect speedy delivery of healthcare services.
Despite the advancements in CRM strategies, it is still a work in progress. CRM for healthcare providers is an approach that not all healthcare organizations have mastered. Effective CRM strategies must take advantage of timely information that can be communicated in a timely manner and tracked so that adjustments, when needed, can be made.
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Because of the rate by which CRM strategies are implemented, there is still a critical issue of finding the best way of utilizing CRM-related data to improve the quality of customer services that healthcare organizations provide their clients. The adoption of CRM systems throughout the world has increased significantly, with web-based applications for sales, marketing and customer information management systems increasing significantly in the last ten years (Fell & Shepherd, 2000). A study by Fell and Shepherd in 2000 indicate that the rate of growth for the adoption on internet technologies for healthcare applications increased by 59% from 1995 to 2000.
The ability to measure the success of these implemented CRM strategies is still an issue of concern. With the objective of customer satisfaction, there is still a variety of approaches that are undertaken by healthcare organizations in their pursuit of providing clients with the right kind of products and services needed. An overall conceptual framework for CRM that generalizes the needs of clients and the responses for healthcare organizations are still wanting. A conceptual framework that utilizes CRM systems and measures the variables that determine the CRM system’s success or failure is still a construct that is under study. This paper endeavours to provide the multivariate analysis of these systems to determine the conceptual framework that drives CRM success in the healthcare sector.
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