How do the research principles of data validity and reliability tie into data collection in project management? Should data that do not have confirmed validity and reliability play any

Adapted customer relationship management implementation framework: facilitating value creation in nursing homes

Stephen R. Gulliver∗, Uday B. Joshi and Vaughan Michell

Informatics Research Centre (IRC), Henley Business School, University of Reading, Reading, UK

This paper proposes a framework to support customer relationship management (CRM) implementation in nursing homes. This work critically considers existing studies, which conducted in-depth questionnaires to identify critical CRM features (termed value- characteristics) that were identified as potentially adding the most value to nursing homes if implemented. Although the existing research proposed an implementation framework, summary of, and inconsistent inclusion of value-characteristics, limits the practical use of this contribution during implementation. In this paper we adapt the originally proposed framework to correct perceived deficiencies. We link the value characteristics to operational, analytical, strategic and/or collaborative CRM solution types, to allow consideration in context of practical implementation solutions. The outcome of this paper shows that, practically, a ‘one solution meets all characteristic’ approach to CRM implementation within nursing homes is inappropriate. Our framework, however, supports implementers in identifying how value can be gained when implementing a specific CRM solution within nursing homes; which subsequently supports project management and expectation management.

Keywords: CRM; implementation; framework; nursing home; value-characteristics

1. Introduction

Around the world, the 85-and-over population is projected to increase 151% between 2005

and 2030, compared to a 104% increase for the population aged 65 and over and a 21%

increase for the population under aged under 65 (Cook & Halsall, 2012). In the UK, the

number of people aged over 65 increased from 8.4 million people in 1981 to 10.2

million people in 2011, causing a shift in the median age from 35.4 years to 39.7.

Between 2010 and 2035 the median age is predicted to rise to 42.2 years (ONS, 2012).

Hancock, Comas-Herrera, Wittenburg, and Pickard (2003) stated that the projected

number of people in the UK aged 85 and older would also increase by over two million

in the next 50 years. There is, therefore, a growing need for appropriate care provision

for the elderly. This problem is compounded for local authorities by a limited amount

of resources (Bathurst, 2011). Dahlgaard, Pettersen, and Dahlgaard-Park (2011) suggest

that three aims of healthcare are: providing care, enhancing health and maintaining low

costs; however the question of what care people need, and how this can be provided

with ever reducing resources, still remains. There are various levels of care, i.e. home

care, care-homes, nursing home and hospitalised care, yet what decides the level of

care that is provided to the individual? Is it cost? Is it physical demand (i.e. whether the

elderly person should physically be at home)? The level of care needed? Or is it level

of resistance (i.e. if the individual doesn’t want to leave their own home)?

# 2013 Taylor & Francis

∗Corresponding author. Email: [email protected]

Total Quality Management, 2013

Vol. 24, No. 9, 991–1003, http://dx.doi.org/10.1080/14783363.2013.776771

Local Authorities in the UK are responsible for the allocation of financial resources

with regard to care spending, and with the reduction in spending proposed by the UK gov-

ernment, current insufficient services are going to be further reduced (Altmann, 2011).

Age UK (2011) found that 61 of the 139 councils surveyed are creating savings by increas-

ing or producing new charges on social care provision including home help or day care

centres, which are paid for by the individual. Since individuals and/or families are

being asked to pay top-up fees, a trend is emerging of customer empowerment

(Ouschan, Sweeney, & Johnson, 2006). Interestingly MacStravic (2000) found that, if

managed, patient empowerment could aid healthcare organisations more than consumers

since patients are often happy to spend their own money to gain additional or customised

treatment, supporting the argument that a customer-centric philosophy is essential to the

development of new innovative products and services through the identification of custo-

mer problems and needs (Dahlgaard-Park & Dahlgaard, 2010). Michie, Miles, and

Weinman (2003) showed that empowering the patient–physician interaction leads to a

more positive health outcome, and this view is held globally by many as a chance to

lower excess healthcare costs and optimise healthcare outcomes (Vernarec, 1999). To

manage empowerment, and to allow residents’ medical and personal needs to be

identified (Berglund, 2007), we suggest the adoption of customer relationship manage-

ment (CRM).

CRM is a strategic dialogue with customers, through a customised delivery of a

service or product, to ensure that each customer contributes to the maximised profitabil-

ity of the organisation (Bohling et al., 2006). CRM implementation is often perceived as

strategic, yet it is fast becoming a survival tool in heavily user-centric domains (Chang,

2007). By capturing the correct information about residents to support service provision,

CRM can be used to create value for patients by supporting trust creation (Oinas-

Kukkonen, Raisanen, & Hummastenniemi, 2008), and the building of long-term relation-

ships (Sun, 2006). CRM management of care provision can deliver a empowered

customised service, which swiftly meets current and/or potential patient needs, enhances

healthcare service quality, allows increased valued addition, increases patient satisfaction

and increases mutual benefit (Cheng, Chang, & Liu, 2005). Moreover, CRM facilitates

healthcare providers with a method to gain more information about residents in order

to support development of appropriate care adjustments (Benz & Paddison, 2004). Lit-

erature offers generic CRM models (Eid, 2007), as well as specific consideration of

CRM implementation in nursing homes and healthcare (Cheng et al., 2005; Glaser &

Foley, 2008), yet despite discussion of how customer relationship can be effectively

mapped to operational activity (e.g. Chahal, 2010; Schniederjans, Cao, & Gu, 2012;

Vargo & Lusch, 2008), the literature rarely considers the practical mapping to the sol-

ution type.

In Section 2, we introduce the reader to the domain of CRM, describing how CRM sol-

utions fall across four distinct categories of CRM solutions, i.e. operational, collaborative,

analytical and strategic. In Section 3, we introduce the Cheng et al. (2005) healthcare fra-

mework, and the need for case, data and care management. In Section 4, we critically

discuss the shortcomings in the Cheng et al. (2005) framework, and argue that adaptation

is required to create a framework that allows key value characteristics to be identified.

Moreover, in Section 4, we propose an adapted framework to support the identification

of value characteristics, and support implementation alignment with the four defined

CRM solution categories. In Section 5, we provide a summary of the work and highlight

our research contributions.

992 S.R. Gulliver et al.

2. Introducing customer relationship management

There are multiple definitions of CRM in the literature. CRM is the amalgamation of a

business strategy and an IT strategy (Payne & Frow, 2005), and includes dimensions relat-

ing to business strategy (Gummesson, 2002), customer life-cycle management (Galbreath

& Rogers, 1999; Nancarrow, Rees, & Stone, 2003), information technology (Shoemaker,

2001) and communication (Swift, 2001). Buttle (2004) defines CRM as the main business

strategy that combines internal processes and functions, and external networks, to generate

and provide value to the targeted customers with the goal of obtaining a profit; yet

describes it as being grounded on high-value customer-related data and facilitated by

information technology.

Using CRM technologies, care providers can develop a one-to-one relationship

(Peppers & Rogers, 1993), formulate added value (Barnes, 2001; Storbacka & Lehtinen,

2001), control cost and spending (Johnson & Nunes, 2003) and/or analyse customer value

(Nykamp, 2001). Payne and Frow (2005) examined the value creation process and found

that business and customer strategy evaluations can be transformed into implementable

programmes, which create value for both the customer and the organisation.

Interestingly, METAGroup (2001) stated that there are three different types of CRM sol-

utions, i.e. operational, collaborative and analytical; however, Lin and Su (2003) and Buttle

(2009) distinguish strategic CRM as being separate. Operational CRM relates to appropriate

and reproducible business processes created to execute the firm’s preferred customer

relationship model in the areas of customer access, customer interaction, sales and

channel choices and customer learning on an individual basis (Tanner, Ahearne, Leigh,

Mason, & Moncrief, 2005). Collaborative CRM employs a combination of collaborative ser-

vices and infrastructure to ensure that an interaction between a company and its multiple

channels can be achieved (Payne, 2006). Analytical CRM relates to acquiring, warehousing,

isolating, combining, managing, understanding, disseminating, employing and conveying

customer-related data to enhance both customer and company value (Buttle, 2009). Strategic

CRM relates to the continued establishing and provision of value to customers (Plakoyian-

naki & Tzokas, 2002). Lin and Su (2003) state that strategic CRM provides the chance to

influence customer knowledge and produce value for customers, therefore aiding organis-

ations in understanding and satisfying customers’ needs.

3. Healthcare CRM framework

The medical care industry is a service industry that is fundamentally dependent on the cre-

ation of relationships (Cheng et al., 2005). To support this relationship, Cheng et al. (2005)

proposed a CRM framework (see Figure 1) for specific use in the nursing home domain.

The CRM framework created by Cheng et al. (2005) was influenced by Rigby, Reichheld,

and Schefter (2002) and Campbell (2003).

Cheng et al. (2005) focused on CRM implementation in nursing homes in Taiwan,

which is also experiencing an ageing population. They suggested that CRM in nursing

homes should contain three aspects: (i) case management of customer relationships; (ii)

information management of customer relationships; and (iii) care management of custo-

mer relationships.

3.1 Customer relationship – case management

An interactive mechanism offers patients, who require long-term care services, a means of

obtaining a personalised plan of services. The interactive mechanism integrates varied

Total Quality Management 993

service channels, including face-to-face services, facsimile, e-mail, long-term care-related

websites, discharge planning units of nursing homes and hospitals, in order to supply

patients and families with a reliable contact centre to ensure delivery of a timely, depend-

able, precise and high quality service channel.

Within the case management process, interactive communication between healthcare

workers and customers is significantly important to ensure that the need vs. service deliv-

ery gap is minimised. Healthcare workers should take part in a learning relationship with

both patients and their families in the ‘assessment of demand model’, i.e. to recognise their

needs and to create care plans that would serve as a reference for individualised care

packages.

3.2 Customer relationship – data management

The healthcare industry is knowledge intensive and, therefore, healthcare institutions (i.e.

nursing homes) have a growing need for customer knowledge management (KM) (Bose,

2003). Knowledge is based on data, which should, therefore, be organised and managed

(Bender & Fish, 2000). KM comprises processes that enable the use and development

of organisational knowledge so as to generate value and to enhance and maintain competi-

tive advantage (Carlucci, Marr, & Schiuma, 2004). Therefore, KM signifies a fundamental

Figure 1. CRM framework for care institutions (adopted from Cheng et al., 2005).

994 S.R. Gulliver et al.

element of CRM, and has been used within the framework proposed by Cheng et al. (2005)

to identify the needs of the residents so a personalised care plan can be created. Effective

use of KM, and a knowledge database, is often necessary to successfully gather, amass,

relocate and analyse the vast quantities of data being produced. This amount of data,

however, holds considerable useful knowledge that can be applied to service provision

development.

CRM provides a customised and individualised service strategy to meet individual cus-

tomer demands. From the analysis of data, collected within case management, we can

identify resident characteristics, which can be used to segment care. The goal of the analy-

sis is to explain, comprehend and assess the organisation’s existing customer strategy

(Baran, Galka, & Strunk, 2008). ‘Suggested solutions’ involves proposing solutions that

assist healthcare workers in the nursing home to gain an advanced understanding of

patient’s needs and promote a service relationship between the nursing home and the

patient, which meets their needs and forms the basis of an individualised service plan.

3.3 Customer relationship – care management

With the employment of IT, and due to use of analytical tools to segment residents with

different backgrounds and needs, numerous care service strategies can be generated. As

a result, ‘care design’ can be managed, with a comprehensive care plan and customised

services, which can be integrated with case management. The care plan should aim to fulfil

the care demands of each resident, should provide a long-term interactive channel plan for

residents and their families, and should aim to enhance service and supervising care

quality. After the service is implemented by the nursing home, applicable data have to

be entered into the database, and the physical and mental condition of each resident,

and their care demands, should be assessed on a daily basis via ‘care delivery’ by

nursing home staff. With regard to CRM ‘monitoring and feedback’, the work of Cheng

et al. (2005) relates mostly to ensuring that internal and external stakeholders understand

their responsibilities and responses to care delivery.

It is clear in Cheng et al. (2005) that nursing homes mostly do not know how to conduct

a CRM implementation, or what value characteristics would be useful to consider imple-

menting to capture the right information for use in service provision. Accordingly, it is

essential that nursing-home CRM implementation prioritises the solution implementation

around CRM value characteristics.

4 Creating a characteristic-based framework for implementation of CRM in

nursing homes

4.1 Questionnaire analysis of CRM in nursing homes

To understand where CRM can most effectively add value within the nursing home

domain, Cheng et al. (2005) analysed international CRM and nursing-home-related docu-

mentation; thus determining the essential characteristic elements that defined the nursing

home domain. This is critically important, because despite validation in Taiwan, the

characteristic elements can be applied internationally. Questionnaires were created to

capture feedback concerning 84 characteristic elements. For each characteristic, two

pieces of information were captured: user feedback concerning perceived level of impor-

tance, which was captured using a five-point Likert scale, with five to one representing,

respectively, ‘very important’, ‘important’, ‘normal’, ‘not important’ and ‘very unimpor-

tant’; and level of current execution, defining characteristics that nursing homes perceive

Total Quality Management 995

that they are already doing, with information captured on a five-point Likert scale, with

five to one representing, respectively, ‘completely achieved’, ‘mostly achieved’,

‘normal achievement level’, ‘largely unachieved’ and ‘not achieved at all’.

Two hundred and twenty-five questionnaires were distributed among managers or

nursing supervisors at 211 nursing homes. One hundred and seven questionnaires were

returned; however, 14 were deemed invalid. Cronbach’s reliability was used to establish

the internal consistency of the rating scale in each different assessment dimension; cate-

gorised by component parts of the CRM Framework (see Figure 1). A computed alpha coef-

ficient ranges between 1 (representing perfect internal reliability) and 0 (representing no

internal reliability); with 0.8 used to represent an adequate level of internal reliability. As

all of the reliabilities exceeded 0.8, the reliability of data was seen as being high, i.e. all

dimensions of the questionnaire are dependable and constant. Due to the Likert scale defi-

nition, a mean score greater than four was categorised as being either important and/or very

important; and was, therefore, deemed as critical. The three dimensions that obtained the

greatest importance were: ‘Behaviour of service personnel (4.76)’, ‘Design of care processes

(4.62)’ and ‘support from the related units (4.61)’. CRM characteristics that were the most

executed in nursing homes were: ‘Customer data collection (4.21)’, ‘Behaviour of service

personnel (4.21)’ and ‘Design of care process (4.15)’. According to the results, the three

areas where practitioners consider themselves as having underachieved were: Data analysis

(3.23), Care service strategy (3.64) and KM (3.70). Interestingly, the results relate closely to

the level of computerisation used at specific individual nursing homes, the information

system equipment available and recognition by management of CRM.

4.2 Directions for improving nursing home quality care

Cheng, Lin, and Liu (1998) established that when the quality expectancy of two challen-

ging items, or the difference between expectation and satisfaction, is equal, the quality of

the two challenging items should demonstrate a rule that can decide the value prioritisa-

tion. The characteristics used in this study to evaluate the significance of CRM are calcu-

lated using the following formula:

IVCi(Importance Value, Corrected) = (Importance − Current status) × Importance

= (Ii − Ni) × Ii,

where Ii is the importance of characteristic i. Ni is the current execution status of

characteristic i. Both Ii and Ni are determined from questionnaire Likert scales.

Ii 2 Ni , 0 Current activity is perceived as being well appropriate in the context of importance.

Ii 2 Ni ¼ 0 Current activity is perceived as appropriate in the context of importance. Ii 2 Ni . 0 Current activity is not appropriate in the context of importance. Therefore, the root

cause must be located to make relevant improvement plans.

Following the identification of the IVCi value for each characteristic, Cheng et al. (2005)

used a 80/20 principle to categorise characteristic importance into five categories, i.e. absol-

utely important, very important, quite important, important and normal. They argued that by

using this method, nursing homes have a more comprehensive understanding of the value

potential of each CRM characteristic. Accordingly, Cheng et al. (2005) identified the 17

top CRM value characteristics that best support value creation with in nursing homes.

996 S.R. Gulliver et al.

4.3 Classification of characteristics

Three characteristics were identified relating to case management: (i) the nursing home

needs a method to manage the interaction of residents and their families; (ii) the

nursing home should repeatedly interact with the community residents to create good

interactions; and (iii) the residents should be assessed by a professional within a time

scale of seven days from them arriving at the institute to allow carers to appreciate

needs and customise care.

Six characteristics relate to data management: (i) the nursing home should create its

own long-term care website to allow customers to gain pertinent information in a straight-

forward manner and enhance customer interactions; (ii) the nursing home should dis-

tinguish target customers in accordance with the types of residents in the database and

run one to one communications with residents and their family members in order to

meet their needs; (iii) the nursing home should alter its marketing strategy given the

results received from data analysis; (iv) staff should analyse and forecast the requirements

of distinct residents and their family members utilising IT analysis; (v) homes should gen-

erate individualised care plans, which are constructed using the results of the data analysis;

and (vi) the nursing home should encourage staff to be imaginative in planning care to

satisfy resident needs.

Eight characteristics were identified as relating to care management: the nursing

home should: (i) intermittently evaluate staff satisfaction; (ii) implement unit care,

with around 10 people per living unit. Each unit consists of a living room, kitchen

and dining room; (iii) consider requests and obtaining help from consulting firms to

administer activities connected with enhancing customer relationships; (iv) employ sur-

veillance in public areas to manage resident activities; (v) actively search for new resi-

dents; (vi) deliver various alternative treatment options; (vii) enthusiastically employ

and get in contact with volunteers, social organisations or school organisation to

assist in establishing activities; and (viii) Each staff member should partake in both

activities connected with enhancing customer relationships, and boosting their job

satisfaction.

4.4 Critical review of results

Cheng et al.’s proposed framework for introducing CRM implementation in nursing

homes (see Figure 2) is based on the results that they obtained from the value characteristic

questionnaire. The framework, however, groups characteristics, to support an understand-

ing of relevant themes; yet seems inappropriate in the context of a CRM implementation.

In ‘case management’, for example, the themes ‘interactive mechanism’ and ‘assessment

of demand model’ do not clearly map to the three characteristics defined by questionnaire

results. Since multiple implementation methodologies, and/or CRM solutions could be

used to implement the characteristics, it seems more appropriate to consider all character-

istics separately.

As stated previously, CRM solutions can be categorised as being related to either oper-

ational, analytical, collaborative or strategic CRM solution types. In order to have a suc-

cessful CRM implementation, therefore, the correct solution type should be used to

implement key value characteristics. Since characteristics within the summarised

themes relate to different CRM types, it appears inappropriate to group characteristics

together as it risks critical characteristics being either ignored or wrongly implemented

within the final solution. In addition to the grouping of characteristics, Cheng et al.

(2005) was inconsistent regarding the value characteristics that were included. For

Total Quality Management 997

example, within the data management/KM theme they neglect to include a very important

characteristic.

Although the grouping of characteristics supports the reader in understanding the

‘theme’ of change to which CRM will add value, the summarising of value characteristics

makes explicit implementation more confusing for implementers. Accordingly, we

propose a more appropriate framework that explicitly considers each of the 17 defined

CRM value characteristics, which allows the implementation approach for each to be

considered.

4.5 New framework for implementation of CRM in nursing homes

An adapted framework (see Figure 3) is presented in this section, to better reflect the

results of Cheng et al. (2005), reduce the chance of issues being forgotten, and provide

a more holistic and implementation-focused plan. Rather than grouping characteristics

together using summary theme headings, as in Figure 2, each individual characteristic

is listed separately. As well as avoiding overt summary, this avoids inconsistent classifi-

cation. By listing each individual characteristic, we not only ensure that consistency in

the way that characteristics are represented, we are able to produce an efficient implemen-

tation plan for CRM; allowing the potential for each value characteristic to be linked to an

CRM solution type.

To support the practical implementation of CRM, each value characteristic was

assigned with at least one CRM solution tag (i.e. (O)perational, (C)ollaborative, (S)trate-

gic and/or (A)nalytical); which in our opinion best represented the type of CRM solution

that best meets the requirement defined by the specific value characteristic. Wang (2012)

appraised the implementation of CRM in 30 hospital-based nursing homes and 108 pri-

vately run nursing homes in Taiwan. Results show that hospital and private nursing

Figure 2. Overall framework of introducing CRM in nursing homes (Cheng et al., 2005).