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Learning from $30 Billion Failures

Learning from CRM Failure

   

"Will my CRM implementation be a success?" - the million dollar question. The failure rate of CRM implementations, according to the market research firm Gartner, has reached 50% during some years in the past decade.

Having spent thousands of dollars on implementing a CRM software solution and then struggling for user adoption, integration and data migration with additional expenses piling up is the inevitable outcome of a 'failed' implementation. Expectations are dashed and the real picture becomes apparent - instead of customer insights to improve customer centricity, the organization is struggling with a 'white elephant'. Their attempt to find a resolution through additional CRM customizations is fruitless - the solution provider is unable to meet their promises to deliver a system that forecasts through analytics, provides centralized customer and partner data plus streamlines processes. In other words, they are unable to deliver a "holistic view" of the organization's customers and related stakeholders.  On the contrary, the organization is working around the clock to prevent customer churn and regain profitability for its products and services due to a failed CRM implementation.

Learning from top CRM evaluation regrets

CRM software solution providers earn billions of dollars through their product implementations on license fees, subscription fees and upgrades. Worldwide CRM application sales are projected to generate revenue of close to $18 billion in 2011 according to Gartner.

Will your CRM really be a "solution" or become part of the problem? Surveys taken for CRM implementations that failed suggest:

  • Usually due to smaller and/or more phased and piecemeal implementations, the frequency and effects of SaaS CRM failures are somewhat less than their On-Premise CRM predecessors.
  • A key factor for CRM failures through time - user adoption. This seems to be less of a factor with SaaS CRM implementations. Nonetheless, change management plays a critical role during any implementation.
  • Primary factors related to SaaS CRM implementation failures included a lack of project management during the implementation, lack of executive sponsorship, resistance to change (including hidden agendas), inadequate product solutions and a failure to clearly define the project objectives, business requirements and critical success factors.

Prospective buyers of large CRM projects should not accept vague promises at face value.

 

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It is important to realize that organizations implementing a CRM software solution are ultimately responsible for the success of their project and will be the losers in most cases if it collapses.

 

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If a project that is too large or complex to understand and digest, in most cases it should be scaled down to a manageable size and expanded subsequently.  

5 Steps to avoiding CRM failures

A CRM project that keeps dragging and the financial pressure can lead an implementation to collapse. To avoid a CRM failure, some important tips:

  • Good strategic planning in terms of deliverables and managing critical information necessary for the deployment and operation of the CRM system.
  • Have all the decision makers operating toward a common goal and pulling in one direction.
  • Do not force your business to fit with an out-of-the-box solution instead of modifying and adapting the CRM to fit in with your operations and more importantly customer requirements.
  • The implementation team needs to be assessed in the beginning itself for its capabilities in delivering the desired outcome.
  • A very important factor is hidden costs. Implementation costs usually balloon to twice or thrice what the vendor states in the beginning.

Customer Success Stories