Management Report on British Telecom (BT)
The report discusses the importance of analysing external business factors within macro environment which may affect an organization. A PESTLE analysis has been provided for BT Group PLC where various political, economic, social, technological, environmental and legal factors were checked.
The report also discusses the importance of CRM and benefits that an organization could draw from appropriate usage. The report discusses critically how BT is using the CRM systems within its strategic business environment to the best of ability and yet lacking on frontline when it comes to delivery, hence some recommendations have also been drawn for the same.
These days, the business condition is progressively worldwide and aggressive than it has been before. A wide scope of business factors is associated with an organization's' competitive advantage. Outside and inner factors in the business environment crucially affect the business conditions. Firms need to examine the business conditions and create strategies that could enable sustainable competitive advantages for their survival. Globalization has changed how business is conducted in present times. The primary stakeholders run the business are more strategy driven. strategy was not the only main decision which could aid the organization to progress admirably yet, in addition to it, it is responsible for also figuring out what the organizations can do different from their competitors.
Organizations should break down their business surroundings, pick their techniques, and discover the assets expected to execute their methodologies. Accomplishing a reasonable upper hand is not simple. Competitive advantage as how much a firm has decreased costs, exploited available opportunities and mitigated possible threats. Competitive advantage is the capacity of an association to manage it in a different course from their business rivals. A competitive advantage could exist when a firm has a product or service that is seen by its market clients. The sustainability is utilized to portray competitive advantage. The significance of this factor has only expanded in these last few decades.
This report is being prepared on British Telecom which is one of the prominent telecom organizations operating in UK. The report shall analyse the external business factors that have an impact on the organization’s competitive advantage and strategies when it comes to customer relationship management.
2.1 PESTLE analysis for British Telecom (Task 1)
The PESTLE report for BT examines factors in context of political, environmental, social, economic, technological, legal environments. The external environment analysis will show the factors that have or could have an impact on the organization’s strategy in place. In this section, all the factors in the external business environment where BT Group PLC operates have been gauged to the best of knowledge and their possible impacts on the companies have been presented (Ozuem et al., 2016).
Political – BREXIT will turn out to be beneficial for the company as it shall reduce their pension liabilities because of high interest rates that would be affected.
Apart from this, British Telecom Group PLC (BT Group PLC) also operates in many countries and hence, it is widely exposed to a lot of political factors that may affect its business. Political stability of host country is not so good and the communication is sector prevalent. Threat of military actions is there. The corruption levels in the operating environment and government policies which may be interfering by nature poses a threat. Applicable taxation rates, wage legislations, Intellectual Property laws and such other factors are liable to impact its business environment (Nurmi et al., 2018). These factors have the potential to disrupt the operational flow of BT. It could increase their costs and make way for losses if not strategically tackled.
Economical – EE’s acquisition will reduce costs and low churn out rates. Since the scope of telecom services would increase, further M&A’s opportunities shall show up.
Rates for savings, inflation, taxation, interest, forex, economic cycles and so on helps decide the investment required by the organization and the aggregate tentative demand. In the various countries that it operates in, these economic rates are bond to affect the company. The efficacy of financial markets prevalent, labour pay, literacy levels, unemployment rates, skill levels could have an impact on costs borne by the company in its operations (Lamas Leite et al., 2017). This could in turn have its effect on the product offering and pricing.
Social –The product bundle offered by the company is a good product differentiator in the market. New technology advances such as smart phone, IOT is building a mindset among customers ‘to stay connected’ at all times.
How the society behaves impacts the immediate culture within the organization. The beliefs shared by consumers affect the marketing strategies the company would deploy to gain maximum impact in market. Here the demographics of the host country and skill levels displayed by population also impact the environment. The structure of power, class as well as hierarchy has a prominence (Schuetz and Schrefl, 2017). The attitudes displayed by the society and the leisure interests decide how the company will invest in product offering and marketing plans.
Technological – 5G is coming up and hence, building good capable infrastructure and alliances is a top priority. Economies of scale are also on card based on the technology advancements.
Fast or slow pace of technology changes have a potential to ease or disrupt the business potential of the firm. They have direct impacts on the costing structure as well as the demand of product offerings in the market (Navimipour and Soltani, 2016). It also impacts the diffusion rate of technology into the market and large impact on the value chain structure as well.
Legal – Decree by Ofcom demanding BT’s separation from Openreach. BT’s Italian division faces lawsuit of class action nature.
When the intellectual property rules and regulations are not robust in a country, the companies face threats of counterfeit cheap copies of their products in the market. The companies are at a constant threat to losing their competitive advantage. Hence laws such as copyright, patents, data protection, intellectual property laws etc. must be checked thoroughly.
Environmental – Pressure to further reduce carbon emissions and convert usage to renewable energy
Different prevalent environmental laws and liability laws have direct impact on the profitability of the company. Some countries give tax benefits in case the companies who are operating the environment follow their policies and regulations and show good results enjoy tax benefits (Prajogo, 2016). Some countries are penalized as their environmental laws are not adhered to. Factors such as recycling, waste management, air, water pollution regulations, protection of wildlife, endangered species, attitude towards recycled products or eco friendly products are all important as they impact the profitability. In case of BT, lowering their carbon emissions is an essential challenge along with shift to renewable energies.
As is understood, these factors could always have counteractive repercussion on the factors part of Porter’s five forces in the macro environment of the organization which form the strategies that a company like BT Group PLC would take up. It is understood that, they could impact the profitability levels as well as the competitive advantage enjoyed by the company.
2.2 Customer Relationship Management
The business needs to deal with the clients in effective manner to improve the relationship with them. In this manner, IT frameworks can address the issues of managing clients everyday to determine their responses and feedbacks. Customer relationship management (CRM) is a technique to identify the demand and practices of clients that can help them to create more associations with them (Badwan et al., 2017). It is to a greater extent, business logic can help the organisations to manage clients productively and viably. Utilization of innovation makes CRM fruitful. In the business world, identification of the demand of the clients and improve the business services based on the demands is significant in maintaining growth. The more channels a business has, the more prominent is the need to deal using cooperation with the client base. CRM helps to understand with the clients demand and then it helps the companies to adjust their business activities to ensure that the clients are served in the most appropriate manner (Nyadzayo and Khajehzadeh, 2016).
CRM helps businesses to increase profit by improving consumer relations. The better they comprehend their clients; clients can become more responsive to the products and services. CRM is also required for the businesses to determine buying propensities of the consumers along with assessments and inclination. In addition to it, profiling people and advertisements can increase deals. On the other hand, changing the purchasing manner can enhance client administration and marketing activities of the companies. Profiting by CRM is not only an issue of purchasing the correct tool (Soltani and Navimipour, 2016). The companies also should likewise, adjust their business to the requirements of their clients. CRM arrangement reduces time and cost of the businesses and provides numerous potential advantages.
Better relations with current clients can helps the business organisations to expand sales with the help of better planning. Alongside, foreseeing needs depends on notable patterns as well as customer needs can help the companies to gain strategically positioning in the market (Rashidirad et al., 2017). Eventually this could prompt upgraded consumer loyalty and maintenance, guaranteeing that the great reputation in the commercial centre keeps on developing expanded incentive from the current clients and decreased expense related with supporting them, expanding the general effectiveness and diminishing complete expense of offers improved gainfulness by concentrating on the most productive clients. Endeavours can provide more focus on growing their market and finding new consumers after identifying their target customers and market demand. Recognizing new prospects and increasing the client base is necessary for the businesses to improve profit (Shafei and Tabaa, 2016).
Endeavouring to actualize CRM as a total arrangement in one goes is an enticing yet dangerous methodology. In this way CRM venture can be separated into reasonable pieces by setting up appropriate pricing and business strategies.
2.3 CRM’s impacts
The essential focal point of any CRM procedure is to engage the association to produce and hold gainful clients that assists the association. Most techniques advance around client acquisition and client profitability. More so, because of the diminished costs connected with retaining clients instead of acquiring new. Client profitability tracks the money related execution of organizations concerning every one of the costs related with the business. Profitability tracking is made effective with usage of technology (Mgbemena and Bell, 2016).
At its core, CRM is straightforward. Notwithstanding, it very well may be executed in a colossal cluster of strategies: online sites, social media platforms, phone calls, conversations, mail, email and different promotional materials can be included in CRM arrangement. CRM apparatus helps the companies in sales and marketing for increasing stability and profit in big organisations. (Dahiya and Bhatia, 2015). Advertising material can be related with leads and clients can increase profit of the organisations. Buying pattern of the consumers can be pointed out by the organisations with the help of CRM. This enables organizations to, all the more likely, envision their clients' needs and, thus, satisfy them.
Innovation is required for the companies as well as right beneficiaries for advancements can be identified from effective client information. CRM enables organizations to turn out to be progressively proficient by arranging and computerizing certain parts of the business. From sales to marketing and even business analytics client data, CRM computerizes and streamlines these procedures for organizations’ benefits. In this way, the organisations can incorporate straightforward and obvious information in business operations (Hargreaves et al., 2018). At last, CRM programming enables organizations to advance their client associations. By disentangling and streamlining a considerable lot of the more unpredictable client interaction procedures, CRM expands consumer loyalty.
2.4 Effectiveness of BT’s response to CRM
BT’s business procedure is guided by four central needs. First is, improving the client experience, cutting expenses, defending their central business and growing new incomes from organizations, for example, portable, broadband and ICT. BT concentrates on placing the client at the heart of their business to execute this methodology (Wali and Nwokah, 2016). By auditing every one of their procedures, to guarantee that they are driven by the requirements of the client, as opposed to what suits them as an organization, and driving new inward projects to guarantee each one of their stakeholders are totally centred around conveying the most ideal client experience. BT understands the distinction between great client experience and bad client interactions, with a solitary helpdesk assistant with poor client interaction skills assessed to cost their business around £300,000 in benefits. So BT resolutely works towards furnishing their counsels with the tools they could work with superbly (Ascarza et al., 2018). During the period from 2002-2005, new key activities had been propelled to help insert this client centred technique in BT’s corporate culture.
Conveying a genuine ROI (return on investment) from CRM has turned into a key issue for all business associations over the private and public sector partners. This is especially essential as the universe of CRM is changing at such a huge pace. BT has expanded its network of contact centres, so that they could reach out to more customers and there is more capacity in house to build the relationship with their customers (Nyadzayo and Khajehzadeh, 2016). Other than this, BT has made use of numerous channels such as the multi-media, multi-channel environment, instant messaging, voice, on the web, channel partners and field sales and services by their staff. BT is one of the leading CRM practitioners. They have incorporated good and relevant technology platforms such as utilizing Siebel-based frameworks. By doing so, they have revived their call-centres to build a strong state of the art modern contact centres serving all over Europe. They are to convey improved consumer loyalty, guaranteeing each client exchange is simplistic and complete, paying little respect to the medium through which it is taken care of. Having built their own CRM ability, they have collaborated with Siebel Systems to convey successful solutions to their customers (Soltani and Navimipour, 2016). At the point when CRM is working to take care of business, it will improve consumer loyalty, lessen costs and furnish counsels with the devices they have to convey an extraordinary client experience.
BT in beginning of 2005 declared that it would be the first to put up Siebel's new on-request offering for sale to the public in the UK. Called as Contact Central On Demand, the new services from BT permitted organizations of all sizes to utilize Siebel's CRM innovation, facilitated on BT's system. CRM has been excessively world class at BT. Contact Central OnDemand offers the guarantee of business-wide CRM without the hierarchical and execution complexities that once kept organizations down (Mahmoud et al., 2018). Contact Central OnDemand is focused at both SMEs and at bigger organizations that need to coordinate with corporate arrangements of Siebel undertaking applications however don't need or need the full bundle. OnDemand is a thinned down adaptation of enterprise Siebel that maintains every single essential component and some analytics. It is the analytical abilities, said Siebel that separates the framework from its rivals. Undertaking CRM at the corporate dimension implies gigantic responsibilities, licenses, frameworks incorporation, preparing, improvement, three-to five-year duties at the minimum to make it successful. BT Retail has conveyed £20 million of CRM programming and has turned into Siebel's top merchant since the Contact Central dispatch (Wali, 2018). The dispatch of Contact Central OnDemand will rehash both the accomplishment for BT and the extension of CRM to new markets.
Through their very own change procedure, they have understood that accomplishing genuine consumer loyalty from a CRM venture is about something other than the arrangement of innovation. Customers need a dream for their business. BT’s vision is to give a customer driven encounter in a multi-channel world. This is the thing that drives their Siebel deployment. BT additionally realizes that executing CRM change on this scale takes quite a long while and it is essential to comprehend the idea of the speculation and the imaginable returns. It is essential to separate the general task into discrete, effectively characterized stages, such as 6 months to a year projects. Meeting the early achievements, exhibits at an early stage that the task will be finished with the correct degree of profitability (Shafique et al., 2015). Research led by Gartner demonstrates that, notwithstanding the current financial atmosphere, improving client services quality and the management control of client contacts are positioned in the front of diminishing business costs. BT perceives that each business and public organization has diverse requirements and it is important that their picked arrangement meets their CRM furthermore, by and large business goals (Ascarza et al., 2017). Without a doubt this is a difficult feat to achieve. Yet, with the help of their accomplices, BT is ensuring actualizing successful multi-channel arrangements over a wide scope of stages and foundations, for organizations of various sizes. BT is helping change different organizations to progress toward becoming client driven.
There is no "one size fits all" business procedure to an effective CRM activity, however; there are normal tenets that are fundamental to CRM achievement. BT need to comprehend what CRM truly is, the most effective method to approach it, what CRM intends to the business and its clients, and how to allure clients and increase returns. CRM achievement requires effective change management as well, solid leadership as well asgovernance, estimation of results, tight mix of innovations and a procedure based way to deal with tackling issues (Santouridis and Veraki, 2017). In the past, in most of the world organizations, the accentuation has been wrongly set on CRM programming decisions and execution plans, not on CRM systems building. Organizations' administrators have inevitably ignored the basic disciplines to address the basic inquiries on CRM ventures. To accomplish the long haul estimation of CRM, endeavours must comprehend that it is a methodology including the entire business, and in this way ought to be approached at an organizational level (Corte et al., 2015).
2.5 Recommendations to BT
Despite BT’s long talks about 2016 to become the brand’s best digital year, the ground reality was something else. At the frontline, BT was unable to deliver it at the frontline. There have been numerous customer complaints which BT receives on an average day. The complaints are usually about no services, loss of service, outage and poor engineer visit complaints and so on. What that means is that there is still lot of room for improvement for BT to improvise and improve on the CRM front. BT currently has deployed efficient CRM software to take care of its business needs but what it needs is also constant monitoring of the services and product offerings. They must attempt to lower the complaint cases. Alarm bells for CRM failure is when the complaints do not cease to decrease. BT has spent millions on CRM systems throughout the decade from various vendors and associates. What is lacking is coordination because of which one problem leads to another and builds chain of events. This means that BT has silos of operational capability without much coordination among each other. This is causing the efficient CRM system otherwise to fail on field. The ultimate hit is on customers who get disinterested with the product and lose interest to carry on with the brand owing to poor customer experience.
Keeping these things in mind, there are a couple of recommendations that BT could implement to make things a lot better when it comes to customer relationship management. First of all, success in CRM is dependent heavily on consumers’ satisfaction. The new opportunities brought forward by technological advancements are something BT needs to work upon. Customers want high speed internet which is super fast. Even though BT is invested in bringing it into operations, it has had no major success. It is imperative that to bring in more customers and retain the present ones, it ensures seamless offering of this product as soon as possible to gain competitive advantage. Next stop for BT to work upon sincerely is centralizing things. Right now, the apparent divide between departments and divisions has frustrated customers. The customers do not like being hustled from one department to other on the telephone and wait endlessly to get their issues sorted. BT must build intelligent systems that proactively intimate them of issues customer might be facing when they call and automatically routed to the right department so that their time is saved.
While CRM is imperative to understand customers’ requirement, organizations are setting unrealistic goals, which makes them to ultimately fail during delivery of services. BT shares the same fate. It is important for them to plan, prepare and do appropriate research into current gaps between expectations and reality and fix that to gain back customers. They could start by benchmarking what they want to achieve and measure their progress. They need to collective reach an agreement upon the priorities they set for making the improvements for building better customer management capabilities. Thereafter, BT could also segment their customers as keep a tab on priority customers. By appropriate investigation into the manners in which they are interacted with, the problems they approach the company with should also contribute towards better interaction levels, behaviour and lower the costs.
Competitive advantage is a deciding element of any association's prosperity. In the wake of globalization, firms need to react to worldwide challenge. PESTEL investigation gives extraordinary insight concerning working difficulties BT Group PLC will look in external business conditions apart from the competitive forces that could give it a competitive edge. It is hence, important once again, to bring attention to the importance of factors within a macro environment of a business as they influence decisions when an organization creates strategic marketing or operational plans for better outcomes. They pay attention to external business environments. The report discussed the implications of the business environmental factors within the external macro environment of BT Group PLC. For this, PESTLE analysis was conducted. The PESTLE framework analysed the political, environmental, social, technological, legal and economic reasons and found how BT could utilize the opportunities and make their business revenues and outcomes better. For instance an industry might be exceptionally gainful with a solid development direction however it would not be any useful for BT Group PLC on the off chance, that it is located in shaky political conditions.
The report also discussed the CRM framework and the benefits that it may draw. CRM framework is an unquestionable requirement for each business. It encourages companies to break down their client associations into profitable corners. By analysing the client interactions will enable them to improve their client connections which can enable them to develop their business and increment their deals. CRM collects data about the business clients from all channels of communication, for example, a live talk, mail, email, social media platforms, website to cite some examples. This data dissects the business’ client's purchasing propensities. BT, like most organizations are suffocating in information, however; is famished of appropriate interpretation of it. The second step for BT Group PLC to benefit from CRM is to dissect client collaboration. This shall give a comprehension of the connection between key measurements, for example, client maintenance, and operational measures, for example, call length or transformation rates.
A CRM framework can enormously aid the running of any business properly. Be that as it may, just on the off chance, that it is appropriately overseen and used. Companies would prefer not to finish up with only a dumping ground of client data that nobody is utilizing. For a CRM framework to really be gainful to one’s business, they have to ensure that everybody is using the framework to its maximum capacity and that the CRM framework does not get stalled with futile data.
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