Why do CRM projects fail?


tai sao trien khai crm hay that baiWhy is it that even when we’ve done everything right according to our project management hand book (we’ve kept the golden triangle of budget, scope and timeline intact), the business looks back at its cherished CRM project a few years on and realises its failed to find the holy grail of CRM?

Was it an unrealistic expectation of benefits? Or a lack of organisational alignment to a customer strategy? Or some other reason?

The question is by no means a new one. In 2008 Gartner concluded that over 50% of CRM programmes were seen as unsuccessful by business. Foss, Stone and Ekinci published a paper in the same year in Journal of Database Marketing & Customer Strategy Management trying to understand why. They looked at results from 40 CRM implementations from a broad mix of CRM project types and markets.  They summarised the key reasons for failure as: poor planning, lack of clear objectives and not recognising the need for business change. Does this sound familiar?

Some years before, the Harvard Business Review identified the key to successful implementation was recognising the importance of business process change and aligning this to a customer strategy. Technology choice and implementation is critical of course, but readying the organisation is likely to be a factor critical to success.

The Harvard review outlined the perils of CRM we should avoid:

  • Implementing CRM before creating customer strategy
  • Rolling out CRM before changing the organisation to match
  • Assuming more CRM technology is better

Crmfromhell.com has an entertaining and informative site that summarises a number of causes of failure of CRM projects, together with a checklist of solutions. I find their logo of a burning CRM platform ‘helps’ in the same way Douglas Adam’s ‘Don’t Panic’ on the front of the Hitchhikers Guide to the Galaxy does, an image I’ve often recalled when in the midst of, er, challenging projects.

But have things really changed? Despite the evolution of the CRM industry and the huge investments in technology, can we still be making the same mistakes? Our take below on the top five things people need to get right, suggests they are:

  1. Have clear business objectives. Being clear  what you want the system to do is a key foundation for a successful deployment.
  2. What are the supporting processes? The business objectives can only be met if the system is used in a way that achieves them. Defining these processes and how the system will support them is a critical, but often missed, requirement.
  3. Don’t focus on the technology. People tend to get fixated on technology, but it’s people, process and technology. The technology piece in reality is probably the easiest part. Process and people are rather more difficult.
  4. Resource project properly. The cost of deploying a CRM system is much more than the technology itself, or the professional services provided by the vendor. Fully understanding the range of costs involved and particularly the demands on internal resources is key to having the wherewithal to be successful.
  5. User adoption. You can have the best system in the world, but if you can’t get people to use it in a consistent and structured way you will struggle to add value. Getting to people to use CRM technology in the way intended is rarely an easy task. A heavy investment in resources and a generous measure of patience is often required.

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