Why to do many first-time CRM implementations fail to meet business objectives?
Consider that the Gartner Group predicted last month that 50 percent of all CRM implementations between now and 2006 will be judged failures. And that may be understating the case. Mark Meyer, director of CRM at BMC Software, says the failure rate figure may be as high as 80 percent. BMC took three stabs at CRM over the past seven years before it got it right.
"One of the biggest mistakes CRM implementers can make is to believe that there is a magic bullet solution delivered by technologists," says Pegasystems CEO and Chairman Alan Trefler.
Even Siebel Systems, the company that can claim some of credit for creating CRM, admits it's hard.
"Some organizations, however, have not achieved all the benefits they had hoped for. They have encountered problems ranging from cost overruns and integration challenges to poor user acceptance," Siebel Senior Vice President of Technical Services Steve Mankoff wrote in a paper titled "Ten Critical Success Factors for CRM Implementation."
In the broadest sense, success comes from lining up organizational support and putting the right people on the job. Technology, while an important enabler, rarely shoots down a CRM implementation. The irony is that Mankoff's enablers have been timeworn checklist items for IT projects since companies started using computers a half century ago.
Consider Mankoff's bullet points:
- Establish measurable goals
- Align the business and IT
- Get CEO support from the start
- Let business goals drive functionality
- Train users and involve them in the design
- Measure, monitor and track
- Use a phased rollout schedule.
In 21 years covering IT, the only point I hadn't heard was the last one. Twenty years ago, mega-mainframe projects took so long (two to four years!) that a phased rollout could rival the average lifespan of the human male.
"The trap companies fall into is all they think about is technology. The reality is they take a broken process and automate it, and now they have a broken automated process," says Gartner Group Vice President and Director of Research Scott Nelson. "A lot of people say it's the vendor's fault when a lot of it is their organization. CRM requires an examination of why you do things the way you do."
If this sounds a lot like re-engineering, the consulting company mantra of the nineties, it should. They are not that different, except that a CRM implementation requires more attention to detail and execution. Re-engineering was a bit stuck in academia and often was a code word for cutting jobs.
Proceeding with a CRM implementation is similar to launching a political campaign. All the various constituencies have to be convinced to vote the right way. CRM must be an integral component of a larger company vision.
After that, it's an endurance contest. Mistakes will be made. Technical glitches will be encountered. And budgets will be blown. But if the people issues were resolved early on, all you have to do is keep going when the going gets tough.
John Dodge is vice president of news at Ziff Davis Media and a columnist for eWEEK and Baseline magazine. He can be reached at email@example.com.