UGB_UFR-SEG_M1SG_MS&GRC_Pr GUEYE_TD 

: DAN RANI GUERO

MASHKIN GROUP
Tamilla Curtis*, Nova Southeastern University, 317 Aleatha Drive, Daytona Beach, FL 32114
Donald Barrere, Nova Southeastern University 1900 Pelican Landing Blvd, #1023, Clearwater, FL 33762
Tom Griffin, Nova Southeastern University 2900 NE 30th St. Unit 8G, Fort Lauderdale, FL 33306

Mashkin Group Inc. (Mashkin), a wholly owned subsidiary of Amir Inc., a British financial conglomerate, is a
medium-size, asset-management group based in the US. Mashkin consists of three primary divisions: a mutual
fund company with $10 billion in assets; a separate, but closely affiliated asset management company with $15
billion in assets; and a financial services company. Since the early 1990s, these three enterprises have shared the
same client database and other software programs. The first program utilized, an inexpensive, off-the-shelf
system with limited capabilities, was used by the sales department of both the mutual fund company and the
asset management company primarily to store names, telephone numbers, and notes of salespeople. A second
program was used by the IT department to update the database as new clients arrived and record daily sales data.
A third program was installed at all internal and external salespersons’ workstations and laptops to provide
current data to the sales force. In addition, the Client Service Call Center used a separate designed-in-house
program to track incoming call activity.

The technology systems utilized by employees in Mashkin were designed to support general sales activities.
None of the software was designed specifically for the needs of their financial divisions (either the mutual fund
or the asset management side) and lacked the analytic functionality as well as the collaborative functionality to
interface with other systems within Mashkin. This limited functionality of technology forced employees to spend
an inordinate amount of time manually jumping between applications and creating new reports to import and
export data between applications that could not be currently integrated. Significant effort was also expended in e-
mail and other communications between users throughout the firm to collect information that was not recorded
in the system.

Working around the limitations of the technologies had been possible when the sales volume and number of
clients was small, but with the expansion of the company the situation had become unacceptable. Management
felt that it was time to implement a comprehensive CRM strategy with integrated technology specific to the
needs of their financial divisions (both the mutual fund and the asset management sides). The three companies
under the umbrella of Mashkin shared the same objectives for their new CRM approach:

1. To provide superior service to customers in addition to the benefit of the core product;
2. To identify, focus on and retain key customers;
3. To develop customer’s profiles; and
4. To improve managerial decisions and workflow.

The desired (and expected) outcome of the new strategic approach, which included the internal reorganization of
the use of resources, was increased productivity through faster access to comprehensive client records; faster
response to customer needs; better reporting and analytical capabilities; reducing duplication of efforts; and
gaining data manipulation capabilities.

THE CRM PROJECT

In order to deal with the complex issues of identification and implementation of the appropriate CRM program, a
CRM taskforce was formed consisting of managerial level employees. While large firms have the resources
required to buy comprehensive custom systems, smaller firms are often forced to use low cost, off-the-shelf
products, modify products developed for other firms, or build a system in-house; and in Mashkin’s situation,
budgetary constraints prohibited the outright purchase of a fully integrated custom system. An outside CRM
consultant was hired to assist in the program and help select an off-theshelf, integrated system for use throughout
the firm. Working with the consultant’s input, the task force determined the strategy for the implementation
process including software requirements, vendor selection, budget, project timeframe, personnel involved and
user training. After months of comparing programs that could be adapted to the unique needs of the companies
within Mashkin, one was selected that was successfully in use by a similar, but larger, firm. Mashkin finally
committed to a chosen CRM system and the software licenses were purchased. The IT department ensured that
all networks for the new CRM program were in place. The new system was populated with current data that was
transferred from the old databases. In order to minimize risk, the old systems were left in place to run parallel
with the newly installed CRM system.
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Despite careful planning Mashkin faced major challenges during the project implementation. The cost of the new
CRM system implementation turned out to be substantially greater than was budgeted. Controversial issues
concerning cost overruns began surfacing at every board meeting.

In the process of data transfer tens of thousands of client files with contact notes and client profiles were
transferred and aggregated, without regard to their chronology. This lack of chronology meant users had to scroll
through years of notes to locate recent entries and move them near the top of the file in order to render them
useable. The files most affected were those of long-time clients, many of whom had done business with the firm
for 10 or more years. These clients had lengthy files that were made cumbersome and difficult to navigate as a
result of the data transfer. Among the users, those doing heavy sales volume and those attempting to glean
useable data out of the scrambled files were affected most. User efficiencies in this less-than-optimal system
declined further.

Another shortcoming was user training. The firm provided on-line training of sales personnel in the new CRM
system, but the system was based on ondemand user training and there was no structure in place that ensured
employees completed the training instead of merely employing it as a “Help” system. As employees left and new
ones replaced them training deteriorated to an associate spending a few minutes demonstrating the system to a
new employee, who was ultimately left to figure it out on their own. While an integrated CRM application
specific to the financial industry was implemented, financial advisors and salespeople were not utilizing it. The
end users preferred to rely on old technologies and juggled different applications instead of using the newly
installed, comprehensive CRM system. Ultimately, the outcome of the CRM implementation at Mashkin was
completely the opposite of what management envisioned with end results of employee confusion, wasted money
and lost time.

AMIR LIMITED
AMIR, a British financial conglomerate with a large telecommunication division, was interested in further
expanding its business operations and was investigating opportunities in the former Soviet Union for its financial
services division. AMIR’s Board of Directors sought information on the current state of CRM practices in Russia
with particular interest in any specific challenges that might be faced in implementing CRM strategies in Russian
firms.

James Williams, a senior project advisor with AMIR’s international division was tasked with developing a
presentation on CRM in Russia for the Board of Directors. Prior to joining AMIR, Williams had been program
manager at Mashkin and a member of the task force that had steered the unsuccessful CRM project.

Williams was given the following report prepared by a manager at AMIR’s telecommunications division who
had been given a similar research task focusing on the communications market.

REPORT TO MANAGEMENT CRM IN THE TELECOMMUNICATIONS INDUSTRY IN RUSSIA

Since the collapse of the Soviet Union in 1991, market reform in Russia has resulted in dramatic
changes in the business climate. Economic reform resulted in a massive transfer of government
ownership to the private sector (Hisrich, 1996). The economic restructuring reform promoted economic
growth in Russia by making a transition from central government control to a market-based economy
with large opportunities for foreign capital and investment.

There is an indication that foreign and Russian partners have different views of underlying business
principles. Due to the emphasis of Russian management on collectivistic approaches to business and
reliance on capital and functional aspects over human assets (Katsioloudes and Isichenko, 2007), a
large number of foreign investment companies started joint ventures with Russian companies. The
Russian market's orientation had previously focused on processing inventory with emphasis placed on
supply rather than on consumer demand. As a result, Russian companies largely ignored the consumer
(Hisrich, 1996). In the changing economic conditions, many firms in Russia were forced to create new
methods of doing business.

CRM, a relatively new concept in Russia, started to gain recognition in early 2000. The finance and
telecommunication industries are the largest sectors currently employing CRM strategies. Wagner
indicated, “Contemporary Russian marketing practices cover only a narrow spectrum of the diversity
of marketing practices observed in other nations, and overall intensity of marketing activities is low in
comparison with international benchmarks” (2005:199).
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To address the needs of the accelerating Russian CRM market, the CRM Association was founded in
July 2004 to conduct CRM forums, conferences, and discussions; to assist organizations with training;
to distribute publications in order to increase awareness about CRM business practices; and to conduct
research. The overall goal of the CRM Association is to build CRM awareness and share the best
technologies and practices. The first CRM congress was held in Moscow in December 2004, where the
best Russian CRM projects were presented and new CRM systems and approaches were discussed.
More than 350 top managers from Russian and international companies participated in the congress.
Industries included financial services, pharmaceutical, marketing, telecommunication, and others. In
March 2005, Microsoft Corporation, together with DataArt (a provider of high-end software
outsourcing services with headquarters in New York), conducted a CRM systems seminar in St.
Petersburg, Russia to address the development of new CRM solutions. The leading global business
technology event, the Interop Moscow Exhibition, supported by the American Chamber of Commerce in
Russia, was held in April 2008, and provided opportunities for international companies to examine the
Russian market and to display the latest technologies available in the CRM area. According to
specialists, Russia currently represents large investment opportunities for foreign CRM technology and
consulting companies.

EXAMPLES OF CRM PROJECTS

Although academic research on CRM development in Russia is minimal, the implementation of CRM
practices are evident in the example of two telecommunication providers: Svyazinvest (a national
provider); and MegaFon-Moscow (a regional provider).

Svyazinvest is a telecommunication investment joint stock company that was formed by consolidating
shares owned by the federal government in regional telecom operations during the privatization of the
telecommunications sector. It is considered one of the largest telecommunication holding companies in
the world (Svyazinvest, 2008). Svyazinvest incorporates seven large mega-regional telecommunications
operations, and national domestic long-distance and international operations. The holding company’s
subsidiaries operate public telephone networks with capacity exceeding 32.4 million telephone lines. In
2005, Svyazinvest, together with IBM and Amdocs (the provider of billing and CRM products and
services for integrated customer management), began the largest CRM billing modernization project in
Russia (Global Technology Unit, 2005). This project was designed to replace more than 180 of
Svyazinvest's billing systems across seven regions with Amdocs products, and included the
implementation of new voice and data services for its subscribers. The CRM project was conducted in
several phases, including the introduction of a single billing system across Svyazinvest operations. The
new CRM strategies and technologies eventually will provide Svyazinvest with the ability to connect
different operations located in different geographic regions under one umbrella. This will give
employees the ability to get a single comprehensive view of consumers. Overall, the implementation of
new technologies is expected to give the company a competitive advantage by developing the efficient
and effective network infrastructure in order to provide a high-quality telecommunication service to its
subscribers.

MegaFon-Moscow, a division of the MegaFon Group telecommunication company, and one of the first
Russian mobile operators in the Global System for Mobile communications (GSM), was formed at the
end of 2001 due to reorganization of several telecommunication companies (MegaFon-Moscow, 2008).
MegaFon-Moscow is one of the three telecom providers responsible for the wireless network coverage
of the Moscow region. The cell phone market has experienced tremendous growth in recent years in
Russia. Currently MegaFon-Moscow has more than five million subscribers. In March 2005, company
management made a decision to implement the Amdocs CRM technology (MegaFon-Moscow, 2005).
The new Amdocs automation resulted in many advantages, such as time saving for consumers calling
the call center, an increase in the number of customer’s calls taken, and a better call routing structure.
New CRM technologies allowed MegaFon-Moscow to link call centers with its stores, and to provide
better access to customer information data. Amdocs CRM was able to consolidate MegaFon-Moscow
data into a single unified platform, which is fully integrated with existing billing systems. Customer
service employees receive fast access to customer data, giving them the ability to respond quickly to
customer’s requests and provide a high level of customer service.

Williams finished reading the report and reflected on the manager’s analysis of CRM practices in Russia and his
own experiences at Mashkin.
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QUESTIONS FOR DISCUSSION:

Assume you are James Williams developing a presentation on CRM in Russia for the Board of Directors of
AMIR limited:

1. Identify strategies for the CRM project implementation.

2. Identify reasons contributing to the failure of the CRM implementation at Mashkin.
3. Discuss the current state of CRM practice in developing markets like Senegal.
4. What additional challenges might companies in Africa face in implementing CRM projects?

REFERENCES
Hisrich, R. D. (1996) ‘The Russian distribution system: Problems for entrepreneurs and new venture entrance’,
Management Research News, 19(8): 1-18.
Global Technology Unit (2005) ‘IBM and Amdocs undertake Russia's largest wireline billing project’, [www
document]
http://www-05.ibm.com/il/gtu/success/amdocs.html (accessed 15 March 2008).
Katsioloudes, M. I. & Isichenko, D. (2007) ‘International joint ventures in Russia: A recipe for success,’
Management Research News, 30(2): 133-152.
MegaFon-Moscow (2008), [www document] http://english.megafonmoscow.ru/about/general/ (accessed 20
April 2008).
MegaFon-Moscow (2005) ‘MegaFon-Moscow to implement Amdocs CRM solution’, [www document]
http://www.crm2day.com/news/crm/EEplpFykVkkEMwltbc.php (accessed 25 February 2008).
Peppers, D. & Rogers, M. (2004) “Roots of Customer Relationship Management”, in Managing Customer
Relationships: A Strategic Framework, John Wiley & Sons, Inc.:
Hoboken, pp.5-8. Svyazinvest (2008), [www document] http://eng.svyazinvest.ru/about/ (accessed 25 April,
2008).
Wagner, R. (2005) ‘Contemporary marketing practices in Russia’, European Journal of Marketing, 39(1/2): 199-
215.