Case Two: HSB-Norr

”Hyresgästernas Sparkasse och Byggnadsförening (HSB)” was established on 1923 from Hyresgästföreningen i Stockholm. The motivation was to build and maintain good apartments with low living costs for their members. The quality and general living conditions were also a concern for HSB. Today, HSB has over 540 000 members and

000 unions (bostadsrättsföreningar) in the Swedish territory. 4

HSB-Norr is then a service company owned by its members and member of the nation wide HSB company. The company’s main areas of services include administration of housing contracts, maintenance. It also provides its clients (bostadsrättsföreningar, i.e. BRF) with technical and professional support, financial service assistance, insurance and loan negotiations among other. HSB used to have banking services as well until 2003, when the bank was sold out. Since October 2004, HSB has been operating in the insurance business and the premium charged by HSB is 30% less than customers can find on the market.

All the members of HSB are considered customers but the closest relationship is held with the boards of the BRF. HSB mostly with the boards and so far the relationship with these boards had been quite stable and unquestioned. However, the trend is now changing as new generations of members start serving on the boards. These new board members do not have same traditional relation with HSB, in the professional sense. The new generation of board members has brought up the possibility of going out to find other companies able to provide cheaper or better services than HSB, so the competition has risen.

HSB realizes and believes that relations are, and should be the key word in its business because their particular industry is based upon trust and “trust can only be built when there is a strong relationship”.

The organization of the company has drastically changed in the past years. Formally, there used to be 3 different companies that formed HSB-Norr. These companies merged into one three years ago. The change happened at a formal level but in practice they had continued to operate and behave as 3 different companies with different cultures. Today, the company has basically three formal levels in the organization. The VD, or general manager for HSB-Norr and there are 3 departments: Administration, Economy (financial), and technical, all of them supported by the Information department. Under each of these departments the different functional areas are distributed and now a sales team has been introduced. They work through all the areas by geographical markets.

Figure 13: Organizational Chart HSB-Norr (www.hsb.se/norr, Dec 13, 2004)

At this time, HSB has also submerged into very aggressive building objectives. New production of apartments in Luleå is also a priority for them and this is now handled by the technical department.

CRM at HSB-Norr

Customer Relationship Management (CRM) has not been fully implemented yet at HSB but the company is in the process of implementing it within the shortest time possible. According to the VD, the process has consisted of 1 year of planning and 6 months of implementation so far. However, HSB has gone through most of the various stages of CRM implementation by way of restructuring the entire business process, handling the people component and implementing some of the technology. The company, as the VD explained, had the need for different systems and IT solutions since they are capable of collecting more information about the customers for the purpose of serving them well. The total investment in the CRM implementation process (including only technology and the new experts hired for this purpose) is in the range of the 2 million Swedish crowns (locally).

The VD stated the following as main reasons that drove the company to adopt and implement CRM:

• New members of the boards started changing the stable/unquestionable position

that HSB had in the past

• The demands of customers were changing towards tailored-made and personalized

solutions; the normal one-size-fits-all contracts were no longer enough.

• Competition was becoming very keen

• They considered that there was a need to strengthen trust and generate new

relations with the boards.

• HSB-Norr considered to have the right timing, environment and resources to face the change

Internal benefits already mentioned as a result of the ongoing CRM process:

• Increase in sales of new and existing services

• Possibility to evaluate the relation with the boards

• Feedback opportunities

• Higher productivity

• More efficiency in the organization as a whole.

• Input from the BRF board members for product development.

• “More legs to stand on” as a company, more ways to generate revenues. Benefits that the company has been able to provide their final customers include:

• Personal contact from the representatives and top management

• Improved communication channels

• Improved after-sales services

• Provision of market information that affects the BRF (finances, regulations, taxes)

• Education and training for the board members

• HSB meets the customer when they are available.

• Customers feel now that they are part of the development of the company, as their thoughts are heard and implemented.

• Local presence supported by the whole organization

• ´One-stop shopping´

• State of the art technology in providing services

• HSB apartments usually generate a higher price in the market

• Internet technology available 24/7 with information and services like online

invoicing and reports among other.

At this point, the VD for HSB-Norr describes his satisfaction level with the CRM process as a very good and prognosticates that their main focus for the coming times will be to improve the way in which the relations have been handled to obtain trust and loyalty from their existing customers. The year 2005 will be then focused on the existing customers and later (relationship improvement and retention) and, in 2006, they will move more aggressively to expand their market share.

In terms of the organization, HSB-Norr was restructured almost completely. After the companies were merged 3 years ago, 80% of the management team was also changed. So, from having managers with an average age of 60+ the company moved to managers with an average age of 32. Only this part of the change was already hard to assimilate for the organization. Now, the company is faced with the implementation of new processes, new ways of working, new mentalities. A lot has happened at the same time; some have adapted quickly and for some it has been harder to understand. Another important aspect is that during the years, HSB has acquired a quite strong position on the market. This has also been a reason of resistance since it makes it hard to convince people to change when things are going fine.

The changing process has not been an easy one for the organization to adapt to. To some degree, everyone has been involved in making it happen but sometimes with a measure of

resistance. The staff has all been provided with seminars and meetings where the new vision has been exposed to them and overall it has shown good results. An example of resistance to the process was the sales team in their beginning stage. They used to be managers of an administrative area before with people reporting to them. Now, all administrative tasks were reassigned so they could focus a 100% of their time to three basic processes: “time to market, time to customer and time with customer”. The resistance came because they perceived the change as a loss of power but just after having the process operating for 6 months, the team has shown to be extremely successful. The results are already showing and they are very satisfied themselves. Another example that has been hard to deal with is the people in what today is the front desk. Their tasks will also be reorganized so that they can pay unconditional attention to the customers concerns. This has created some resistance because so far, they have felt that the most important part of their job is the administrative one (dealing with the paper work, etc) and they have had a negative perception of the task of attending customer issues. They feel it is less important and to some degree, they have though that the customer just comes to interrupt their job. So, they haven’t received so well the idea of letting go of the administrative area and attend the customer first, they have felt a bit underestimated and, as the VD described, probably a bit less indispensable. The way in which this process will be structured is the task for the next two weeks. The VD has the confidence that once it starts operating, the staff will be able to perceive the benefits and adapt to the change.

The changes have also required dealing with the organizational cultures. The VD explained that they work in a very vast area (from Skellefteå to Kiruna) and the cultures tend to be very different. So one of the first things they had to attend was to somehow merge the general culture and establish a common vision for the company. Now, “relations

is the key word”. At the same time, reorganizing the company and the different processes was a priority. Since May 2004 a sales organization was established with 6 people who were already part of the staff at HSB. Their functions were reassigned and a team leader was hired to guide them, train them and inspire them in their new task. The biggest change in this area has been the perspective towards the consumer: “they don’t come to us, we go to them and meet them outside the office” assured the VD, and they also have to produce a 5 year tailored plan for each customer depending on their present situation and how the future looks like.

Another area that has faced a big change is the front desk, as described previously. HSB now intends to have a service center and move from individual agents dealing with administrative and customer service functions, to a team of people that works under a front and back-office structure. They should then be able to have access to much more information, deal with unique contract agreements, as opposed to the one-size fits all contract, and a new IT system that can provide them with a better understanding of the customer. Other examples of processes and activities that have changed within the company are: the bank that HSB operated before was sold, a new insurance company started offering services since October and the real estate broker that has been working for HSB until now will soon be outsourced. She will still work with the HSB name under a franchise agreement.

HSB-Norr has also attended the need for new technology to support the CRM process. For the organization, a new switchboard will come in place this month that will connect all service centers in the different cities. A new CRM IT system will be fully functional before next summer comes to provide the staff with updated and complete information on the customers. So far the investment on this system has been in the range of the 2 million SEK and is expected at least to duplicate. In terms of the final customers, they already have access to features like web invoices, email consulting and communication, general information on services, reports and ordering services online. This has facilitated the task of the sales team and made the communication with the boards much more efficient When explaining the effort in terms of assigning resources like time and money, the VD stated that 50% of the effort has been put into the process, 40% into people and 10% into technology. He conceded that even though money spent on technology is quite high, this will not yield any benefits if people and process are not given serious attention and effort.

40%

50%

10%

people process technology

Figure 14: Organizational Chart HSB-Norr (www.hsb.se/norr, Dec 13, 2004)

At HSB-Norr the whole CRM implementation process is being led and coordinated by the VD. He states: “overall I am the one leading the effort, stirring the changes”. But for the specific things, he has assigned project managers. One person with IT infrastructures, another sales, the service center, etc. The VD added that as a leader, “my job is to motivate the employees and set the agenda and the direction in which we should move. Management then takes the decision as of what to do and the staff decides how they will do it”. The employees are big parts of making the process happen.

The implementation of CRM as explained by the VD is strategic in its perspective at HSB-Norr. Despite the notion that the company over the years has generated a lot of revenue and is quite wealthy, it is looking now into the future. According him, “the strong economy today can be the biggest enemy tomorrow as ´fat lions do not hunt´” He believes that the changes currently taking place aim to strengthen the company and maintain good figures in all the years to come. Right now, the changes are being done under a positive atmosphere but according to the VD, if changes don’t take place now, they will be forced to take place in the future under much more stressful conditions. The

efforts would be then focused on survival instead of growth. So, implementing CRM in the company is crucial.

Some strategic decisions based on the CRM concept that have been already implemented are to take care of the customers personally and give them tailor made services, change the focus from a passive company to a company that reaches the customer to meet their needs and hears their concerns, taking cultural differences into consideration and providing them with top of the line quality. As far as the company is concerned, it has been strategically important to categorize the customers depending on their size and profitability as well. The integration within the company has been a major concern, as mentioned before. Bringing together the processes, the different offices, the cultural differences, and improving the overall function of HSB-Norr as one and only team. In the near future, concluding the process of implementing the necessary IT systems will bring a better and more global support to the whole CRM process. This intends to be done within the nest 6 months.