Survey: CRM projects fail to deliver

Very few firms are reporting successful customer relationship management (CRM) projects, though they see the need for systems to improve customer services and retain their existing clients, according to market watcher PMP Research.

In a recent survey of 50 UK companies with an annual turnover of $73 million and above, 92 percent of respondents said their CRM systems had not been very successful. However, a large number said it was too early to accurately judge success, despite having systems in place for over a year.

PMP found organizations are continuing to invest in CRM systems but predicted spending among a third of respondents will fall to below $365,000 this year, down from $1.5 million last year, due to tightened budgets.

"It's clear that firms are keen to embrace the new CRM technology available," said Neil Ferguson, PMP research director. "But there's a long way to go before CRM systems prove their worth. Companies seem to feel a certain ambivalence as to what CRM has done for them, and say the systems are not exploited fully enough to achieve maximum benefit."

Analyst group Gartner Dataquest estimates that 65 percent of firms worldwide will be using CRM software by 2002, and that by 2005, global spending on CRM will rise to $76 billion, up from $23 billion in 2000.

Meanwhile, analyst group Giga has produced a list of 12 questions that companies are advised to ask themselves before starting on the implementation of CRM systems. "Although there is the temptation to get moving straight away once CRM goals have been established, it is worthwhile to take a break and recheck some critical questions," said Giga analyst Richard Peynot.