Users Perceptions of Barriers in using ICT for CRM in the Banking Sector in Oman

AUTHOR
Salim Hilal Al-Mamari and Miguel Baptista Nunes

ABSTRACT

The advantages of using Information and Communication Technologies (ICT) based Information Systems in organisations are well known, described and criticised in the literature. ICT enabled Customer Relationship Management System (CRM) systems have been rapidly adopted in developed countries since the beginning 1990s as one of the crucial business solutions for survival. The paradigm behind this type of approach is competition focused on the customer demand and needs. This paradigm shift from product-focused view to customer-focused view advocates that organisations need to consider first and foremost the needs of their customers. However, the adoption of such systems entails barriers and risk events that may hinder successful use of CRM. This paper focuses on understanding the barriers that ICT enabled CRM systems may pose from the perspective of the customers, that are supposed to be the main beneficiaries.

CRM systems are considered as part of the ‘front office’ systems since they aim at establishing and managing the relations between an institution and the customers. Moreover, as they represent a major source of revenue and an assurance of profitability for the organisation, it is expected that the customers are satisfied and retained for sustainable growth. In this respect customer satisfaction is crucial in adopting and using CRM. A loyal and satisfied customer can be the result of meeting the expectations of that customer through proper segmentation and matched services and products. This is achieved by capitalising, implementing and using CRM. A range of previous studies have been critically examined to provide background for the study and have resulted in the perception that CRM systems fail when the relationship with customers is not addressed adequately.

Despite the adopted philosophy of customer-focused view, many organisations have failed to glean the promised benefits of CRM and resolve inherited business problems. According to a number of studies reported in this paper, the rate of CRM failure ranges between 50-75% of adopting organisations. If this is true for in more developed countries, then the adoption of CRM in developing countries can be even more difficult and fraught with barriers, both of cultural and technological nature. In order for organisations to better deal with the factors inhibiting a lasting relationship between them and their customers this relationship can be created, maintained and enhanced across three main functionalities of CRM, namely operational, analytical and cooperative. However, studies are needed to examine customer satisfaction in this relationship. This paper aims at looking at this satisfaction, by identifying potential barriers posed by the use of ICT itself in a developing country such as Oman.

It is hoped that the awareness of these barriers related to customer-centric in the financial sector, particularly in commercial banks, may lead to improvement of services and enhance the links with customers, and hence, to successful adoption of CRM. Moreover, it is hoped that this can be done taking into account the specific context of Oman as a developing country.

Therefore, this paper discusses the barriers that may have impact on potential use of CRM in banking sector in Oman. The choice of study of CRM in Omani banks emerges from a preceding analysis of political, economic, social and technological factors or PEST analysis. The barriers identified of social and technological nature are the ones that have major impact on customer use of ICT-based systems. For the purposes of gaining insight into customers’ perceptions on CRM use, the study used structured questionnaire to survey 600 customers’ opinions of five banks in Oman. The study focuses on the region of Muscat as the most developed and striving area in Oman. In order to obtain higher rate of responses, the questionnaires were distributed among customers within branches of the five major banks. The questionnaire is divided into six sections which include: personal information, banking services, customers’ satisfaction, communication with customers, customers’ commitment, and customers’ information. Six hundred questionnaires were considered valid to be processed for analysis. The data collected was analysed using the SPSS statistical package that enabled the description of different and relevant variables. The barriers towards the use of CRM by banks’ customers are examined through the correlations between significant variables in these six sections of the questionnaires. Meaningful results of this quantitative data are then translated into a narrative that forms the theoretical proposition of this paper.

Therefore, this paper discusses the barriers that may have impact on potential use of CRM in banking sector in Oman. The choice of study of CRM in Omani banks emerges from a preceding analysis of political, economic, social and technological factors or PEST analysis. The barriers identified of social and technological nature are the ones that have major impact on customer use of ICT-based systems. For the purposes of gaining insight into customers’ perceptions on CRM use, the study used structured questionnaire to survey 600 customers’ opinions of five banks in Oman. The study focuses on the region of Muscat as the most developed and striving area in Oman. In order to obtain higher rate of responses, the questionnaires were distributed among customers within branches of the five major banks. The questionnaire is divided into six sections which include: personal information, banking services, customers’ satisfaction, communication with customers, customers’ commitment, and customers’ information. Six hundred questionnaires were considered valid to be processed for analysis. The data collected was analysed using the SPSS statistical package that enabled the description of different and relevant variables. The barriers towards the use of CRM by banks’ customers are examined through the correlations between significant variables in these six sections of the questionnaires. Meaningful results of this quantitative data are then translated into a narrative that forms the theoretical proposition of this paper

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