The problem of CRM with Sony Company
Customer relationship management (CRM) is a widely documented, extensively-applied approach for handling and developing relationships between the corporation and its clients in order to increase sales opportunities. CRM includes utilizing technology to establish, mechanize, and coordinate business processes, especially sales undertakings, as well as activities for advertising, client service, and technical provision. Generally, the objectives of CRM are to discover, lure, and gain new customers; appreciate and maintain the existing clients; attract former customers back into the company; and lower the costs of advertising and consumer service. Currently, CRM represents an enterprise-wide commercial strategy, covering all consumer-facing subdivisions and some other structures. With an effective implementation of CRM, persons, technology, and processes collaborate to achieve an upsurge in productivity and to lower operational costs. The paper seeks to analyze the problems of CRM for Sony Company, demonstrated in the case of Sonys PlayStation Network hacking of 2011.
Sony Company Description
Sony Company is an international firm, and it is one of the major media corporations, established in Tokyo, Japan. The company has several divisions. Among them is Sony Electronics, which is one of the biggest producers of electronics, communications, video, and information technology goods for consumers and professional markets. Sony Company is the mother company of the Sony Group and it rules the whole business via six functioning sections: counting Electronics, Music, Games, Financial Services, Pictures, and Other. Hence, it is one of the internationally broadest entertainment firms (Sony Corporation, par.8). In the Electronics section, Sony improves designs and produces electronic devices. In the entertaining segment, Sony Computer Entertainment Inc. improves, produces, creates, and advertises games such as PlayStation. In the Music section, Sony BMG Music Entertainment, internationally recognized as the second leading record business, creates recorded music and musical videos, as well as distributes digital versatile discs (DVDs), compact discs (CDs), and universal media discs (UMDs). The Pictures section of Sony involves manufacturing, television broadcasting, procurement and delivery of the motion pictures, and online distribution. The segment of financial services involves loans and savings. The Other section consists of both marketing agency commerce and an Internet-associated service trade (Sony Corporation, par.10).
Sonys PlayStation Network Hacking of 2011
A disaster, which happened to Sony Company, was a consequence of a hostile act. In April 2011, a set of hackers obtained access to the confidential information in the accounts of over 77 million PlayStation Network (PSN) users, through compromising the confidence of the corporations PSN gaming platform and social media boundary (Takahashi). Since numerous contemporary games provide users with a chance to purchase extra chapters, character models, or in-game benefits via the web, the compromising data counted email addresses, home addresses, and common account information. It was at first uncertain if the hackers had the access to credit card figures, however, statistics and forensic professionals eventually determined that such data was not obtained. Along with the personally recognizable materials, which became accessible via the hacking, there was a loss of functionality and outages in the system itself (Olaniran et al.).
After the original invasion, the system was rendered impracticable for one week, and customers were not made aware of the particulars of the breaking throughout this time. After Sony Corporation announced the accident, facilities continued to be inaccessible for the greater part of a month while the company tried to repair its cyber-safety and generate a healthier environment for consumers after the hacking. However, the measures did not yield results instantaneously. As the company was handling the attack, Sony encountered a different crack in its Sony Online Entertainment platform. Fortunately, the flaw was less disastrous, mainly affecting void credit cards and old accounts. Facilities on this platform were also provisionally suspended. Functions were resumed completely on May 23, 2011, with a reportedly ultimate cost to the corporation of over $170 million (Takahashi).
Sony Corporation encountered scores of criticism for its sluggish disclosure of information about the hacking as well as for its seeming deficiency of encryption on particular personal information. Even though the encryption matter was eventually a non-factor, the criticism concerning the sluggish response persisted, since Sony Company was aware of the hacking as soon as the 20th minute, but it did not notify users regarding the likelihood of home address or credit card data breaking until a week later (Meyers). The slow response time attracted even the attention of the governments of the nations, in which Sony worked, and the mixture of the possibility of the crack and the late proclamation time caused substantial penalties in the United Kingdom.
After the facility was reinstated in May, Sony Company presented a Welcome Back initiative, which offered the consumers, who were affected by the attack, free games for all Sony systems they possessed from a small list of titles. Consumers in various non-American areas were also offered a system theme in addition to the obtainable titles. Every PSN user obtained a free access to the facilitys top PlayStation Plus system features for one month, and those, who previously had such a membership, got 30 extra free days. Moreover, the Corporation extended substantial possible recompense to those customers, whose private data was exposed during the attack. The Sony Corporation established insurance policy worth $1 million, to deal with possible cases of identified stealing, resulting from the crack, although there were no provable claims of the credit card theft ever transpired due to the hacking (Sony Europe Creates a Community of Super-fans, par.25) .
The Major Mistakes Sony Made with Its System Outage
The first mistake of Sony is the lack of warranty to inventors, who continuously lose their money each time the network is not functioning. Moreover, even though a partial quantity of online functioning has resumed, Sonys practical market is still absent. One developer, named Christian Svensson, who is a senior vice president of a video game improvement firm, stated in a post on its platform that, as an administrator in charge of operating a business, he claims that the subsequent outage clearly causes the loss of the hundreds of thousands dollars, if not millions in the income that was calculated for within the budget. The factors, which worsen the situation, are the small growth lines that are the products, exclusively obtainable via digital delivery. Businesses are still losing money on the deficiency of download provision, yet their revenues would not totally disappear if customers could still purchase their goods on the store shelves. If there is no network or the network is broken, it means that there will be no revenue for people, who completely depend on online services for delivery. With an impersonal communication that provides associates with a small, unclear amount of information that already existed in the public for a week, Sony fails to reassure inventors to remain in their Company.
The other mistake, which Sony made, was blaming the Anonymous group and failing to take a full responsibility for the event. In every single (rare) announcement, made by the firm since the outage, Sony Corporation is constantly claiming itself to be a victim, and blaming any entity, which it feels is accountable for the hacking. In the reply to the state subcommittee, Kazuo Hirai, who is the Chairman of the Board of Directors of Sony Computer Entertainment America, claimed that they learned that the interlopers had implanted a file on one of their Sony Online Entertainment servers termed 'Anonymous' with the phrase 'We are Legion' ((Empson). From the beginning, there were allegations of the self-labeled revolutionary hackers set participation. However, during the press release the set has repudiated any participation and particularly the assertions, made by Financial Times writings. In the press release the set gave explanations why it was not involved, and why it thinks that Sony was actually at fault. They stated that since Sony Corporation was cautioned about safety risks months prior to the attack, so the companys 'best practices' were supposed to take the advice of the professionals. Sony's shifting blame does not justify the gathering and holding of personal data they did not require. However, with a set like Anonymous, it is slightly difficult to determine whether it participated in the hacking or not, owing to the fact that management is decentralized and individual membership is anonymous. However it does not seem improper to place some liability on the Sony Companys system practices. As a consultant I would advise the company to take full responsibility of the event and assure the clients that the situation will not repeat again in future.
The third mistake was that Sony Corporation was missing firewall and possessed outdated software. It necessitated the United States government involvement into the matter, as the security hacking affected millions of persons' personal data. On May 4, a case was held in efforts to get some explanation on what really caused the condition (Empson). No clear explanations were received from Sony Corporation. In his place, Eugene Spafford, an administrative executive of Purdue University's Center for Education and Research in Information Assurance and Security, acted as a troubleshooter for the Assembly. In his testimony, Spafford claims that Sony Company was using a Web service that was outdated and, to make the matters worse, Sony was aware about it. He stated that persons, who operate in security and partake in the Sony system, had detected that the system game servers were held on a form of software known as Apache web servers. They discovered it a number of months ago, while they were inspecting the procedures on the Sony system to test how the games function, In fact, they were operating on extremely old versions of Apache software, which were unpatched and lacked firewall installation, and, thus, they were possibly vulnerable. Furthermore, they had stated the problem in an open debate that was supervised by Sony staff, but there was no reaction and no alterations or upgrading were made to the software (Empson). For Sony, which is a technology giant, working in a system that is both outdated and missing any form of security elements is a dilettante and profit-reducing mistake, particularly when its duty is to assure consumers that their data will be protected. As a consultant, I would urge Sony Company to ensure that it uses the most recent network, and to pay attention to any concerns, raised by the experts regarding the system.
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Last, even though various presently available measures could be obtained in 2011, Sony Company had not fairly established the urban, multi-pronged tactics of communication. The Company, by using more contemporary social media know-hows and customer relationship management, could have improved its communication in order to make it quicker and to avoid criticism of the firms response tempo. Mutually, the corporations private communication skill and conventional CRM could provide Sony with the means to deliver more specifically-targeted communications to various types of consumers and to the public at large.
Sony lacked the capacity to offer intently targeted promotion and informational communication that could significantly serve the company while dealing with a huge information crack. As a consultant to the company, I would advise it to send different emails with dissimilar directives, concerning suitable precautions to be taken in order to enhance the account safety. They should be sent to customers with recent credit cards on folder, with old credit cards on folders, and to those, without credit cards on folders. Sony could use narrowly targeted communications in order to inspire consumers to use the free awards, offered as a recompense for possible risk and the lost time. However, Sony made numerous games available as a portion of the Welcome Back initiative, which was in genres, therefore, attracting mainly casual gamers, several of whom may not have noted the outage. Certain, after the hacking occurrence, security-mindful users were for a long period not comfortable (Olaniran et al.).
The Sony Corporation lacked CRM programs and computerization mechanisms that would concentrate on clear communication in an information breakdown, necessitating user involvement in order to make initiatives quicker, more-systematized, and easier to manage. Marketing computerization mechanism could have enabled the company to reach more enthusiastically those consumers, who, for example, have not applied for their free rewards, and to provide them with more information on the initiative and the precautions that were applied to warrant that no hackings would affect the PlayStation Network in future (Sony's New Internet Marketing Secret, par. 18). While trying to encourage users to return after the crisis, Sony Corporation should understand that clienteles always appreciate a clear communication that visibly matches their desires. Mechanisms like marketing computerization and consumer relationship management software could help the company to plan and access the right customers with the appropriate information quicker and avoid overwhelming them with data they do not require or will not comprehend. These mechanisms could offer an understanding of the operational marketing and facilities to the users, who benefit from those promotions most.
In conclusion, implementation of the consumer relationship management is an essential element for any businesss success. Consumers are always attracted to businesses that have the best policies and a framework to safeguard their desires. As a consultant to the Sonny Corporation, I would urge the firm to try to create different strategies for all types of users. For instance, Sony should develop strategies that facilitate delivery of services to clients, who have no access to online background in order to prevent them from shifting to other brands. The Sony Company also needs to improve its communication with clients. Sony made a mistake of hiding the truth from its users for an extended period of time. The company should have informed the customers right from the start, so as to take proper measures to protect their personal information.
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