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Importance of Data and Customer Relationship Management in the Digital Economy

by Shrisha Sapkota

case management software, practice management software, legal accounting software, legaltech, technology for lawyers, case management, immigration, london, united kingdom

Digital Economy and Data:

The digital economy is the economic activity that results from billions of everyday online connections among people, businesses, devices, data and processes[1]. In 2018, Americans spent an average of 6.3 hours a day on digital media—not just Google and Wikipedia but social networks, online courses, maps, messaging, video conferencing, music, smartphone apps and more[2] 

According to Thomas Mesenbourg (2001), three main components of the digital economy concept can be identified as e-business infrastructure- which includes hardware, software, telecom, networks, human capital, etc- e-business which includes how business is conducted, any process that an organisation conducts over computer-mediated networks and e-commerce which includes the transfer of goods, for example when a book is sold online[3]. 

The evolving digital economy is characterised by the emergence of a platform-based ecosystem of digital products and services that are developing through a combination of widespread and continuous measurement and data collection by the Internet of things, data flowing from user’s data, as well as from sensor-laden factory automation systems and ubiquitous, Internet-connected user devices[4]. This is generating “big data” pools that can be mined and analysed for patterns and correlations that would otherwise remain hidden. The results can be fed into systems where artificial intelligence, machine learning and automated decision-making are used to upgrade system elements and even an entire system[5]. 

Platforms hosted by players such as Alibaba, Amazon, Apple, Facebook, Google, Microsoft, SAP, Tencent and others already have big data at the centre of their business models[6]. While being indispensable to the development of potential game-changers such as artificial intelligence, data is also a crucial input to many online services, production processes and logistics, making it a critical element in the value chain of many different industries]7]. Activities affected by digitalisation go beyond online trading and supply chain coordination, to using information and communications technologies (ICTs) for the integration of a wider range of activities into single systems, thus making value chains increasingly data driven[8] 

The Significance of Data:

The evolution of technology has made it possible for companies to collect, store and use large amounts of data. Data is a crucial input to many online services, production processes and logistics. Digital data can be used for development purposes, solving societal problems, improvement of economic and social outcomes and innovation and productivity growth[9] 

Data obtained from the use of digital technologies can provide new sources of knowledge, innovation and profits, if analysed effectively and transformed into intelligence[10]. For example, detailed data collected from the behaviour of platform users and online consumers can allow platform owners to innovate and offer new, better and/or more customised products and services that can be monetised[11]. 

Data has become a key strategic asset for the creation of both private and social value as it is multidimensional, and its use has implications not just for trade and economic development but also for human rights, peace and security[12]. 

An estimated seventy percent of new value created in the economy over the next decade will be based on digitally enabled platform business models[13]. The amount of data generated in the constantly evolving digital economy is growing at an increasing pace[14]. In 2016, IBM reportedly noted that ninety percent of the data in the world today had been created in the past two years alone[15]. Amounts are bound to increase even faster – experts estimate that the Global Internet Protocol (IP) traffic, a proxy for data flows, will be twice as big in 2021 as in 2018[16]. The people and organisations will increasingly use more data because the digital economy will continue to grow, causing a greater dependency on computer technologies and data (processing). Data will become even more important due to the fact that it is increasingly generated by networked end-user devices and the Internet of Things (IoT). The economy is inevitably moving towards the wider production of new products and services based on general-purpose technologies, such as artificial intelligence (AI), machine-learning, blockchain, cloud computing and other similar high-performance computer-driven processes or Internet-based services which all depend on availability and access to data which’s real utility and value are impossible to estimate today[17].  While being indispensable to the development of potential game changers such as AI, data is also a crucial input to many online services, production processes and logistics, which in turn makes them a critical element of the value chain of numerous industries[18]. Data can also be used to create innovative business models (usage data and process data may be analysed to enhance servitisation) and entirely new markets such as fintech[19]. 

Access to and analysis of data is becoming crucial for the competitiveness and expansion of companies across sectors[20]. Manufacturers and exporters increasingly depend on data analytics, not only because they have digitised their operations, but also because they use support services that require access to data, such as shipping, logistics, retail distribution and finance[21]. 

Monetisation of Data

Data monetisation refers to the process of identifying and marketing data or data-based products to generate monetary value[22]. Data products (i.e. products based on raw, refined or analyzed data) are at the heart of data monetisation[23].They can take many forms, including consumable data sets, analysis results and operational applications that contain analysis results[24]. The three primary external data monetisation business models include data as a service, insight as a service and analytics-enabled platforms as a service[25] 

In data as a service, anonymised and aggregated data are sold either to intermediate companies or end customers who mine the data for insights[26]. For example, telecommunications companies provide aggregated and anonymised customer geolocation data to local governments, allowing city planners to design more effective traffic management systems and officials to better establish “smart city” technology solutions[27]. Customers can also be the downstream or upstream players in a company’s value chain, for example, grocery retailer Kroger captures shopping data generated by its rewards card and sells it to consumer-packaged-goods companies thirsty for a deeper understanding of their customers’ shopping habits and evolving tastes and preferences[28]. 

In insight as a service, companies also can combine internal and external data sources, applying advanced analytics to provide actionable insights[29]. For example, AkzoNobel has created a decision-support model for ship operators to enable fuel and CO2 savings and made available to ship operators and owners an advanced analytics-enabled mobile iOS app that provides continuous performance prediction of coating technologies[30]. 

 Last but not the least, is an analytics-enabled platform as a service that is the most complex of the three business models, and it offers the greatest value to customer[31]. Companies use sophisticated and proprietary algorithms to generate enriched, highly transformed, customised real-time data delivered to customers via cloud-based, self-service platforms. The model allows access to new markets, sometimes building an entirely new business[32]. 

What is Customer Relationship Management?

Customer Relationship Management, also known as CRM refers to all strategies, techniques, tools and technologies used by enterprises for developing, retaining and acquiring customers[33]. The concepts, procedures and rules that a corporation follows when communicating with its consumers are referred to as customer relationship management (CRM). This connection covers direct contact with customers, such as sales and service-related operations, forecasting and the analysis of consumer patterns and behaviours, from the perspective of the company[34]. It provides a centralised platform for sales teams to manage customer interactions and prioritise activities so that no customer feels ignored, thereby boosting the customer experience (CX)[35]. 

CRM systems compile data from a range of different communication channels, including a company’s website, telephone, email, live chat, marketing materials and more recently, social media which allows businesses to learn more about their target audiences and how to best cater for their needs, thus retaining customers and driving sales growth[36]. In essence, this software gathers customer data from multiple channels and ensures that every step of the interaction with consumers goes smoothly and efficiently in order to increase the overall profits[37]. CRM software allows businesses to focus on their company’s relationships with customers, colleagues, suppliers, etc[38]. With a professional CRM in place, it becomes much easier to find new customers, win their trust, provide qualified support and provide additional services throughout the relationship[39]. For example, by adding customer intelligence to the customer service software of a company, contact centre agents become more productive and efficient and customer service becomes easier and more accessible. 

Collecting, organising, interpreting and implementing customer data are key steps in the development of a successful business that is offered by CRM. Many activities (both behind-the-scenes and direct interactions) can be digitised and automated, which helps companies to target their marketing efforts, speed sales cycles and deliver better, more efficient customer service.

How can law firms benefit from CRM?

CRM can help law firms in profiling prospects, understanding their needs and building relationships with them providing them with the best as well as a very high level of customer service[40]. This helps a firm to present a unified face to its customers and improve the quality of the relationship[41]. The main role of a CRM in the day-to-day life of these companies is to streamline backend efficiencies so law firms can focus on winning cases and practising law[42]. Some of the key benefits of using CRM in a law firm are as follows;  

  • Assists in improving the entire sales cycle 
  • Increases customer satisfaction by customising processes and creating unique follow-ups 
  • Assists in launching targeted marketing campaigns that address customers’ needs 
  • Streamlines processes within a law firm 
  • Provides a single, detailed view of the customer[43]

CRM centralises customer data and allows easy tracking and fast integration of any contact the legal team of the firm may have with an existing or potential client. A growing law firm can no longer afford to ignore the need for a centralised place to manage all the firm’s relationships through data, given the importance of data[44]. Thus, it helps law firms to build stronger client relationships. Having strong relationships with clients would mean referral sources, which could expand your client base and that becomes possible when the law firm makes the effort to cultivate a positive relationship with their clients[45]. However, lawyers sometimes don’t have the time or the resources to build such relationships, thus they can be delegated to the software. This software allows the law firm to identify the top prospects and needs of the clients depending on the type of contact with them[46]. It also assists in identifying where the clients of the law firms are coming from and what source is more effective to bring more paying clients and provides the opportunity of measuring the probability of closing a client based on past information[47]. Furthermore, it allows matter tracking or storing and tracking the information and files regarding that matter[48]. It also makes it easy to have all the contacts in one place, modify and share them with your clients[49]. Moreover, document signing & templates have become must-have features that allow the firm to keep track of documents signed and save time generating documents.  

CRMs also help firms track everything that is happening within each one of the matters and connections of the law firm, along with all their details. It can also assist in setting up tasks and reminders and assigning them to the team members of firms ensuring important deadlines are being met. Additionally, connecting CRM to the email account of a law firm enables email synchronisation and helps keep all the conversations in one place. It also allows great possibilities for tracking as the law firms can enable notifications as soon as there is a modification either in a contract, the status of a client or a new email[50]. Thus, tools such as CRM can come in very handy for law firms and legal professionals and assist them in the growth of their companies. Companies or law firms of all sizes will benefit by using a fully integrated, cross-functional CRM solution integrated software. 

Software such as Good Law Software offer the full functions and features of a CRM allowing better case management, legal accounts management and practice management while simplifying & automating administrative processes. 

case management software, practice management software, legal accounting software, legaltech, technology for lawyers, case management, immigration, london, united kingdom

References

[1] https://www2.deloitte.com/mt/en/pages/technology/articles/mt-what-is-digital-economy.html

[2] https://hbr.org/2019/11/how-should-we-measure-the-digital-economy

[3]  Mesenbourg, T.L. (2001). Measuring the Digital Economy. U.S. Bureau of the Census.

[4] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[5] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[6] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[7] https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2020)646117

[8] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[9] https://unctad.org/webflyer/digital-economy-report-2019

[10] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[11] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[12] https://unctad.org/system/files/official-document/der2021_overview_en_0.pdf

[13] https://www.weforum.org/platforms/shaping-the-future-of-digital-economy-and-new-value-creation

[14] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[15] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[16] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[17] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[18] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[19] https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/646117/EPRS_BRI(2020)646117_EN.pdf

[20] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[21] https://unctad.org/system/files/official-document/tdb_ede3d2_en.pdf

[22] https://bi-survey.com/data-monetization

[23] https://bi-survey.com/data-monetization

[24] https://bi-survey.com/data-monetization

[25]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[26]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[27]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[28]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[29]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[30]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[31]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[32]https://sloanreview.mit.edu/article/demystifying-data-monetization/#:~:text=The%20three%20primary%20external%20data,enabled%20platform%20as%20a%20service.

[33] https://www.creatio.com/page/what-is-crm

[34] https://www.investopedia.com/terms/c/customer_relation_management.asp

[35] https://www.oracle.com/cx/what-is-crm/why-crm-is-important/

[36] https://www.bain.com/insights/management-tools-customer-relationship-management

[37] https://www.creatio.com/page/what-is-crm

[38] https://www.creatio.com/page/what-is-crm

[39] https://www.creatio.com/page/what-is-crm

[40] https://www.efficy.com/how-can-a-crm-help-law-firms-to-develop-your-business/

[41] https://www.efficy.com/how-can-a-crm-help-law-firms-to-develop-your-business/

[42] https://www.efficy.com/how-can-a-crm-help-law-firms-to-develop-your-business/

[43] https://p-xel.co/why-law-firms-need-a-crm/

[44] https://www.efficy.com/how-can-a-crm-help-law-firms-to-develop-your-business/

[45] https://www.legalreader.com/4-benefits-of-crm-for-law-firms/

[46] https://p-xel.co/why-law-firms-need-a-crm/

[47] https://p-xel.co/why-law-firms-need-a-crm/

[48] https://p-xel.co/why-law-firms-need-a-crm/

[49] https://p-xel.co/why-law-firms-need-a-crm/

[50] https://p-xel.co/why-law-firms-need-a-crm/