Research shows CRM success is uncertain

Recent research suggests that companies contemplating, or already in the throes of, a Customer Relationship Management (CRM) implementation must focus attention on the human and cultural aspects of CRM. Selecting and implementing a technology without end-user input, and then expecting users to like it and use it, almost guarantees failure.

Here’s a look at several CRM reports and views from other leading analyst firms that gauge the success of recent CRM implementation efforts.

Forrester's CRM survey
Forrester surveyed executives from 111 large companies in North America about their experiences with CRM. Here’s a summary of its findings:

• Nearly 75 percent reported that they are very satisfied or somewhat satisfied with the business results from their CRM efforts.
• About half of the respondents claimed that “resistance to process change” was a “significant obstacle” to their CRM efforts. Other obstacles cited include integration with back-end systems (34.2 percent), high software costs (33.3 percent), lack of consensus on objectives (28.8 percent), and executive commitment levels (27 percent).
• “Driving adoption” of CRM was the most often cited difficulty that they ran into with their CRM implementation (an obvious correlation with the “resistance to process change” mentioned above). Other top difficulties included setting objectives, defining strategy, and defining new processes. A surprisingly low 10.8 percent reported implementing the technology as a leading difficulty, and only 2.7 percent reported difficulty selecting the technology to implement.
• Of the 56 percent of respondents who responded that they purchased CRM software, more than three-quarters were either very satisfied or somewhat satisfied (6.5 percent and 69.4 percent, respectively.) On a related note, of that number, more than half purchased CRM solutions from either SAP, Seibel, Oracle, or PeopleSoft.
• Of those dissatisfied with their CRM efforts, 25 percent complained about poor usability. Of those who were satisfied with their CRM, only 5 percent complained about usability. (It would have been interesting to see how the satisfied/dissatisfied were split among the various CRM vendors. Forrester did not provide that insight in its brief.)

Forrester also provided its take on the survey results. Some of the key points included:

• Successful CRM implementations have concentrated on the “customer experiences they deliver, not on the technology they deploy.”
• “Smart firms” will pay a lot of attention to their selection criteria and a serious review of the various vendors' offerings.
• It recommends that potential customers “start taking the CRM capabilities of ERP vendors seriously.”
• It also recommends that potential customers make usability testing part of their selection process and deployment efforts.

AMR Counterpoint: More failures than successes
In a January briefing from AMR Research, “How You Define CRM Success Depends On Who You Are,” we see a radically different view of the rate of CRM success.

Unlike Forrester or TechnologyEvaluation.com, which both did extensive surveys of 100 or more installations, AMR Research took a different approach. It asked the top 12 CRM vendors to provide a list of reference accounts that the vendor believed had created value from their CRM implementation. It deliberately avoided defining “value” so that “the vendors could determine what value meant."

AMR found a great deal of variation in perceptions of value: It varied from user to user, vendor to vendor, and role to role. It found that the differences in perception of value led to four possible outcomes of a CRM strategy:

• Project failure: 12 percent of CRM projects fail to go live.
• System implementation: 47 percent of CRM projects go live, and the technology aspects of the project are considered a success, but business change and adoption fail.
• Process and system adoption: 25 percent of CRM projects succeed in adoption and systems but still cannot quantify a specific quantified business benefit.
• Performance improvement: 16 percent of projects reach the Promised Land and measurably influence business performance.

AMR goes on to blame the varying definitions of success as the reason that "CRM has developed such a bad reputation." It also claims that many projects overcome the technological hurdles, only to fail on the cultural hurdles.

After a rather surprising endorsement of "large consulting firms" as an answer to overcoming these hurdles and a seemingly biased endorsement of BearingPoint, the article goes on to state that "CRM vendors are still a long way off from providing a bridge between systems and adoption. So users are, in many ways, on their own and should not look to outsiders for all the answers. Success requires internal discipline and leadership, and outsiders can only help enhance and accelerate the change when the will is already present."

TechRepublic originally published this article on 9 April 2003.