How to Prevent Becoming a CRM Failure Statistic

The statistics are daunting. A series of surveys by various analyst and consulting groups over two decades have found that CRM implementations have failed between 18 and 70 percent of the time. Worse, the numbers didn't get better with time. For example, AMR Research, found that 31 percent of the projects failed. Years later a survey by Forrester Research, found a 47 percent failure rate.

That's grim, but it means less than it implies. First, the surveys were conducted with a number of different methodologies and each of them had a different definition of "failure"—from utter, complete failure to a working project that exceeded time and budget and didn't deliver expected objectives.

More importantly, the numbers underline a key fact about CRM implementations. Success is critically tied to execution at all stages of the project. Anecdotally, the companies that executed well from design to roll-out had much better rates of success. The ones that began without sufficient planning or took their eye off the ball were likely to end up with anything from a disappointing CRM project to roadkill.

This isn't exactly a secret. CRM professionals have been preaching this for years, but still a lot of companies aren't getting the message and are ending up with expensive failures as a result. Generally those failures trace back to the same short list of causes.

"What's amazing to me is that a lot of those factors haven't changed over time," says Robert Gorin, a senior director at Getzler Henrich and Associates, a New York city consultancy. "A lot of basic blocking and tackling is still a big issue."

"Success or failure of a CRM project is not one single thing," says Michael Krigsman, CEO of CXO Talk, a Brookline, MA, media and consultancy. "It's the bringing together of many different functions."

Now granted, successful enterprise software execution, day-in and day-out, is one of the toughest jobs in business. But a host of successful CRM implementations show that it can be done. It's a matter of knowing what to pay attention to and then rigorously planning, executing, measuring, revising and starting over again.

The first step in avoiding CRM software failure is to have a clearly defined business strategy and a clear knowledge of how your CRM project's goals directly support that strategy. A poor conception in the beginning may not be the most common reason a CRM project fails, but it is one of the hardest to fix. If you don't know exactly what you're doing you're probably not going to do it very well.

"You want to achieve clarity around your goals," says Krigsman. "You want to achieve clarity around goals, expectations, requirements and scope. This is project management 101. The greater the degree of clarity, the more likely the project will succeed."

"What are your business goals and what are the metrics?" Krigsman continues. "Are you trying to reduce contract cycle time? Boost sales efficiency? Raise customer satisfaction? Reduce hold time in the call center?"

"These are all concrete results and it's essential to have concrete outcomes."

Your goals should determine your tools. There are dozens, if not hundreds, of CRM software tools available from elaborate, complete systems to single-purpose programs that do only a small but highly focused part of the job. It's important that your tools match and support your goals.

This isn't as easy as it sounds. Customer Relationship Management systems have developed from diverse roots with emphasis on different parts of the process. As a result they tend to be stronger in some areas than others. If you try to use a tool whose major strength is in supporting the sales force to improve the hold time in the call center you're going to work a lot harder than you need to while lessening the chances of a successful implementation.

However the experts agree that CRM "non-successes" generally don't arise directly from the tools. The wrong tools can make it harder, but most of the time the causes of failure lie in the people and the process.

Fundamentally CRM is an interactive process. It involves people interacting with software through process automation to achieve a goal. The people are by far the most variable part of the project and leaving them out of the process, or skimping on the people issues is a classic recipe for CRM disaster.

People problems tend to come in two basic flavors. One of them is a lack of full-on commitment at the top. CRM projects need champions in the executive suite, people who believe in what you're trying to do and will support it to the hilt. The other people problem is at the other end of the scale. A major cause of CRM failures is that the work force doesn't buy-in and use the system.

This second problem is probably the most time-consuming, at least in terms of managerial talent, of all the difficulties with CRM implementations. The cure is to apply a change management program that begins by interacting early and often with the people who will use the system.

Get their input right from the beginning, listen to their concerns and design suggestions and get them on board with the project from the beginning. Showcasing benefits to each user role, providing incentives and implementing a change management program are very influential in winning over reluctant users.

Finally, there is execution in all phases of the CRM project. This is the day-to-day process of keeping everything on track and running smoothly. CRM deployments tend to be big and complicated and need a lot of management attention. Without it a CRM project can slide into failure with frightening rapidity.

None of this is rocket science and none of it is a state secret. Instead it is, as Gorin says "basic blocking and tackling."