Journal of Information Technology

, Volume 26, Issue 3, pp 205–219 | Cite as

Customer relationship management and firm performance

  • Tim Coltman
  • Timothy M Devinney
  • David F Midgley
Research Article

Abstract

In this paper, we examine the impact of customer relationship management (CRM) on firm performance using a hierarchical construct model. Following the resource-based view of the firm, strategic CRM is conceptualized as an endogenously determined function of the organization's ability to harness and orchestrate lower-order capabilities that comprise physical assets, such as IT infrastructure, and organizational capabilities, such as human analytics (HA) and business architecture (BA). Our results reveal a positive and significant path between a superior CRM capability and firm performance. In turn, superior CRM capability is positively associated with HA and BA. However, our results suggest that the impact of IT infrastructure on superior CRM capability is indirect and fully mediated by HA and BA. We also find that CRM initiatives jointly emphasizing customer intimacy and cost reduction outperform those taking a less balanced approach. Overall, this paper helps explain why some CRM programs are more successful than others and what capabilities are required to support success.

Keywords

customer relationship management strategic IT capabilities performance 

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Copyright information

© Association for Information Technology Trust 2011

Authors and Affiliations

  • Tim Coltman
    • 1
  • Timothy M Devinney
    • 2
  • David F Midgley
    • 3
  1. 1.University of WollongongWollongongAustralia
  2. 2.Faculty of Business, University of Technology – SydneySydneyAustralia
  3. 3.INSEADFontainebleauFrance

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