UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business LE THI THANH TAM CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ORGANIZATION STRUCTURE AT FRIESLANDCAMPINA VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Le Thi Thanh Tam CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ORGANIZATION STRUCTURE AT FRIESLANDCAMPINA VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Le Thi Thanh Xuan Ho Chi Minh City – 2017 SUPERVISOR’S REPORT ON THE FINAL THESIS SUBMITTED FOR THE DEGREE OF MASTER of BUSINESS ADMINISTRATION Final thesis title: Customer Relationship Management (CRM) Organization Structure at FrieslandCampina Vietnam Student name: Le Thi Thanh Tam Supervisor name: Ms Le Thi Thanh Xuan General comments:  Remarks on the student’s attitude: ……………………………………………………………………………………… ……………………………………………………………………………………… ……  Remarks on the assignment’s academic quality: ……………………………………………………………………………………… ……………………………………………………………………………………… …… Overall assessment: Meet requirement for submitting Not meet requirement for submitting Other remarks: - Did the student follow the report schedule? a Yes b No c Other:…………………………………………………………………………… … - The Turnitin plagiarism percentage: Supervisor’s signature EXECUTIVE SUMMARY This thesis of “Customer Relationship Management (CRM) Organization Structure at FrieslandCampina Vietnam” has been composed and completed in four main parts: problem context, solution recommendation, conclusion and supporting documents Chapter I included company background starting from industry overview, company history and business size as well as the vision, mission and organization structure of FrieslandCampina Vietnam In addition, in this chapter, the thesis has shown the issues, problems which are concerns from stakeholders of the company based on a wide variety of in-depth interview and secondary data regarding business results and performance tracking of CRM team A problem mess had been created to show all symptoms, organization outcomes and problems as a general picture Specifically, a central problem of ineffective CRM organization structure was selected to be solved as a core problem of company with the justification of its existence and importance After validating and selecting the central problem of organization, three causes of central problem listed as departmental structure design which is not in line with business strategy/model; excess headcount number and overlapped roles and responsibilities among Telesales team were investigated to verify and determine so as to give out alternative solutions which were presented in chapter II In this thesis, the long-term solution is proposed to define appropriate number of headcounts at the change moment of business in the future In the meanwhile, there are two proposals for short-term to tackle problem with CRM personnel cost optimization and redesign departmental structure to be in line with new IFT business acquisition model The last part was named as the supporting chapter to support all information and information sources for the above four chapters It composed sections of in-depth interview transcript to justify central problem and selected solution ACKNOWLEDGEMENT I would like to express my deepest appreciation to my supervisor, Dr Le Thi Thanh Xuan, who always stands by me and motivates me to complete this study Without her support, this master thesis cannot be fulfilled Needless to say, her guidance helped me in all the time of researching and writing this thesis In addition to that, I want to show my sincere gratitude to Prof Tran Ha Minh Quan, Prof Nguyen Dinh Tho and Dr Nguyen Thi Mai Trang, who are the ones to set strong foundation for me in organization problem solving and data analysis so that I can conduct this study Beside my advisors, I would like to thank my business partners for discussing, sharing information and coordinating with me make this project happen In-depth interviews were widely used at different levels from many related departments of FrieslandCampina Vietnam to collect data and to diagnose various aspects of the problem with the methodology of design-oriented and theory-informed from a wide variety of fields such as human resources, industry, management etc After collecting data and information to analyze, it was believed that pushing sales performance had been greatly affected by many factors such as nature of work, compensation and benefits, motivation, capabilities building etc However, this research illustrated that factor of ineffective CRM organization structure had been mostly influenced which led to the very alarming consequences such as headcounts in excess, unclear roles and responsibilities, not stretching enough KPI setting, under company business expectation TABLE OF CONTENTS COMPANY BACKGROUND 1.1 Company bacground 1.1.2 Market share and key players in the dairy market 1.1.3 FrieslandCampina Vietnam – Company history and organization structure 1.2 Background of problem .6 1.2.1 Symptoms 1.2.2 Problem justification 15 1.3 Identification of central potential problem 26 1.4 Literature review 28 SOLUTION RECOMMENDATION 31 2.1 Solution recommendation 31 2.2 Proposal implication 37 2.3 Selected solution and action plan 39 3.4 Change management and counter measures 43 CONCLUSION 45 SUPPORTING DOCUMENTS 46 REFERENCE LIST 69 LIST OF FIGURES Figure Vietnam Dairy Market share in 2015 Figure Powder milk key players .3 Figure Drinking milk key players Figure Organization structure of FrieslandCampina Vietnam Figure Consumer Marketing IFT structure of FrieslandCampina Vietnam Figure Current business model of IFT team .8 Figure Current Acquisition business model of CRM team Figure The comparison between personnel investment for one CRM officer versus the average revenue of each acquired new customer 11 Figure The comparison between current number of data officers and ideal number of data officers after deploying data validation automation model 18 Figure 10 Expected validated data of CRM team in 2017 19 Figure 11 Expected validated data of one Data officer in 2017 20 Figure 12 Ambitious automatic acquisition business model of CRM team .21 Figure 13 The comparison between current number of telesales staff and KPI setting in getting new users 22 Figure 14 Expected telesales staff for driving CRM business goals in 2017 23 Figure 15 Initial cause-effect map .26 Figure 16 Final cause-effect map .28 Figure 17 Estimated number of data officers from October to December 2017 32 Figure 18 Proposal new working process for Telesales staff 33 Figure 19 Proposal new CRM organization structure 34 Figure 20 Proposal new working process for Acquisition officer 34 Figure 21.Proposal new working process for Retention officer .35 Figure 22 Short-term plan to optimize FTE number October - December 2017 .35 Figure 23 Short-term plan to optimize Retention FTE number from October to December 2017 36 Figure 24 CRM organization structure from October to December 2017 – proposal A……………… 36 Figure 25 CRM organization structure from October to December 2017 – proposal B…………… .37 Figure 26 Comparison between proposal A and proposal B 39 Figure 27 Roles and responsibilities of stakeholders in project CRM department structure improvement .42 Figure 28 The detailed plan .43 validating data number and less involvement of persons, we found out the opportunities of automatic process We target to have no Data team anymore in case this model is launched successfully D: It was launched in February But due to technical issues, the automation rate just reached 73.5% till end of September 2017 B: So why 84 data officers still work in your team until now? I believe some of them have to end contract with us due to changes of business, technology advance What is the reason? C: We are still not confident in terminating with all staff And we not know how to terminate labor contract with them How about new Verify the current B: With the target of 600,000 new The telesales is users? How is it on performance of users in 2017, average monthly under good track? team in term of number of new users your team has performance KPI: increasing to get is about 382 It means there number of new must be 450,000 new users until customers via now But let’s see, there are only CRM channel 333,280 C: In fact, it’s just in ideal context My team, there are 40% telesales staff reaching 80% KPI, the rest achieving about 70% KPI We have no training to develop capabilities, 60 telesales skill in this year But why is the Understand the C: This number is based on the There are two target of your team reasons why estimation of data source collected assumptions here: 600,000 new users number comes up from different channels and daily + KPI setting is not instead of another with, principles of standard working process of team stretching enough number? KPI setting of this B: How many validated data you CRM staff can team expect to get in 2017? deliver more than D: 1,360,000/1,700,000 raw data current E: And what is daily standard + The number of working process of a telesales staff? headcounts of I believe they can deliver more telesales team is D: I will check it again, Phuong not clearly in line B: Based on my quick calculation, with the changes of the target of new users in 2017 for business CRM should be 16,704 with 131 telesales staff There must be something wrong here C: Ok, to avoid time-consuming, HRBP will help to check working flow of CRM team, understand the reasons why it does not make sense E: Virtually, the number of staff is in excess whereas business requirements and market movement have no high demands HR will work closely with Duong to understand the working flow of CRM team How about KPI – Understand the B: According to monthly financial This KPI is also repurchasing rate reasons why reports, the current repurchasing under expectation improvement? number comes up rate is very low For ease of In terms of HR with, principles of understanding, figure out that there sides, the 61 KPI setting of this are only 10/100 customers buying responsibilities of team the second tin after the first use each CRM team in E: This must be cost-consuming We increasing the have invested a lot in recruiting new repurchasing rate users No marketing program are not strong to created to increase customer drive And there is loyalty? no-one and no C: Yes, we have Reward Marketing team dedicated for is one of marketing programs to this KPI drive this business goal However, it is quite new for CRM team who just focus on acquiring new users only D: We are having difficulties in retaining customer loyalty because under WHO Code and Vietnamese Economics Law, we are not entitled to contact mom having babies under years old for selling milk products It is encouraged to use breastfeeding The target consumers we can reach to increase repurchasing rate are babies over years old Furthermore, we need to review the workload as well as job allocation within telesales team to design a team which is dedicated for taking care of current users Without nuclear To validate how D: Currently, each telesales staff has KPI setting is not roles and CRM three KPI: appropriate responsibilities in management + KPI #1: the number of outbound telesales team, team supervise calls completion how you and manage + KPI #2: the number of acquired 62 evaluate staff performance of customers performance? It team in driving + KPI #3: conversion rate means it’s KPI business goals setting What does Validate the D: Conversion rate is the number of “Conversion rate” information acquired customers per the number mean? regarding KPI of outbound calls understanding E: Clearly, it not logical in this KPI mechanism I can understand that if staff achieves KPI #1 and KPI #2, they are certainly successful KPI #3 KPI #2 is absolute number and KPI #3 is relative number How often Check the D: KPI setting is conducted at the KPI is not set you set KPI for your frequency of beginning of every year and stick in monthly based on team? updating and one year business progress reviewing B: It means you just care about the performance final result officers deliver at the end of the year Is it right? C: It’s right You have Validate unclear D: There is no training course for Lack of training, mentioned about information of CRM staff during years in terms of capabilities difficulties of your interviewee product knowledge and soft skills building team in fulfilling mentioned There are only products updates KPI One of reasons session to support for their is that your officers communication with customers are not trained about telesales skills Do you coordinate with third party to deploy capabilities 63 building for team in 2017? 10 Do you any Ask for advise and B: I think you should start to review Reviewing working suggestion to solve direction working process, working flow in process and CRM team I found that there are number of some numbers which is not headcounts is the reasonable in the logical thinking first priority this problem? flow C: You can work with Duong to understand business model first, understand how data flow runs, KPI tracking and performance of the team D: I think we should review CRM salary structure It has no sales incentives to push up working motivation of the team E: No no chi Duong We should start with ending business goals, define structure which ensures to deliver business requirements And check whether KPI setting is appropriate or not Discussion session – in-depth interview In-depth interview 3.1  Interviewer (A): Le Thi Thanh Tam  Interviewee (D): Bach Duong  Title: CRM Marketing Manager  Age: 37  Working experience period: years 64  Date of interview: 20 June 2017  Duration: 10 minutes A: Hi Duong Following up the previous meeting, just quickly wanna check with you in prioritizing the core problem to solve C: Cost optimization is the key objective of CRM team in 2017 and it is expected to re-design salary structure to seek for opportunities on cost optimization and motivating performance of staff more A: However, as per recent discussion, I think that most of us agree to go with priority regarding reviewing working process and the number of headcounts How you think? C: I not know I just want to start with the ending point which is cost optimization A: Ok, thank you for your advising In-depth interview 3.2  Interviewer (A): Le Thi Thanh Tam  Interviewee (C): Thai Minh Diem Tu  Title: IFT Business Unit Director  Age: 35  Working experience period: years  Date of interview: 20 June 2017  Duration: 10 minutes A: Good morning, Tu I would like to catch up with you about key focus, priority of this project I have consolidated the inputs from all of you So many points are needed to take into consideration 65 C: Well… personally, I am ambitious to solve the problem from the strategic side and solve the problem from A to Z which starts with the root cause A: And I understand root cause in this situation is that there is something wrong in designing CRM departmental structure It is clear that this structure is not clear about responsibilities of CRM staff Moreover, the number of staff is virtually in excess Is that right? C: Yes Kindly check it with Duong about working process, working flow Moreover, some of to-do tasks are not assigned and force in performance of staff A: Is it repurchasing rate? C: Right, girl! A: Ok Thanks Tu I will take notes of your comments and consider to get back to you soon Discussion session – in-depth interview  Interviewer (A): Le Thi Thanh Tam  Interviewee (C): Thai Minh Diem Tu  Title: IFT Business Unit Director  Age: 35  Working experience period: years  Date of interview: 12 October 2017  Duration: 10 minutes A: Hello Tu How are you? C: Very well And so happy when getting your email regarding the solution recommendation for the project of CRM team 66 A: Oh I have read it already Thank you C: Yes I did And to save time, we will discuss to decide the next steps for this project Agree? A: Great I am with you For Data team, I hope you agree with the principles of defining the number of data officer Also, we should communicate with employee why we change, why we have to terminate labor contract with them in the future Therefore, they can prepare something previously How you think? C: Yeap… Not only for Data officers but also for Telesales team I need you help me to prepare communication message to employee without revealing too much confidential information of business A: OK Next, there are two proposals for telesales team in the short time? Which one you prefer? C: I prefer proposal B Very clear in identifying the roles and responsibilities of each one With this solution, we will have a team dedicated for increasing the repurchasing rate Also, we can save cost with reduction of employees A: Going with proposal B, I think we will re-design the job description for Acquisition officer and create new one for Retention officer So it will be easier and more transparent for them when we communicate Could you please help to note some key points of position Retention officer? C: Absolutely I will And please help to prepare communication plan to third party and employee We will take action as soon as possible A: Yeap… Thank you so much for your decision 67 C: No problem Thanks for proactive coordination and helping us to improve productivity 68 REFERENCE LIST Kantar Worldpanel FMCG Overview 2016; 2017 Available from: https://www.kantarworldpanel.com/vn/news/FMCG-Overview-2016 Global Dairy Sector – Trends and Opportunities; January 2017 Available from: https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/ConsumerBusiness /ie_Dairy_Industry_Trends_and_Opportunities.pdf Dairy in Vietnam Country Report – Dairy in Vietnam.; December 2016 Available from: http://www.euromonitor.com/dairy-in-vietnam/report Gregg Greenberg reasons performance management fails and how to fix them D!gitalist September 2015, 24 Available from: http://www.digitalistmag.com/lob/human-resources/2015/09/24/7-reasonsperformance- management-fails-and-how- you-can- fix-them-03422991 Sebastian Bailey reasons why performance management fails Forbes December 2012, 20 Available from: https://www.forbes.com/sites/sebastianbailey/2012/12/20/5-reasons-whyperformance- management-fails/#61f95c875a94 Gil Cargill Six reasons why Sales Managers fail Eyesonsales January 2012, 02 Available from: http://www.eyesonsales.com/content/article/six_reasons_why_sales_managers_fail / .Bloisi, W Management and Organisational Behaviour 2nd European Edition 2007 London: McGraw-hill Companies Available from: https://en.wikipedia.org/wiki/Organizational_effectiveness Mullins, J, L Management and Organisational Behaviour 7th Edition 2005 Essex: Prentice Hall Available from: https://en.wikipedia.org/wiki/Organizational_effectiveness The Law Dictionary What is organizational structure? 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THE DEGREE OF MASTER of BUSINESS ADMINISTRATION Final thesis title: Customer Relationship Management (CRM) Organization Structure at FrieslandCampina Vietnam Student name: Le Thi Thanh Tam Supervisor... plagiarism percentage: Supervisor’s signature EXECUTIVE SUMMARY This thesis of ? ?Customer Relationship Management (CRM) Organization Structure at FrieslandCampina Vietnam? ?? has been composed and completed