A recent study published by IDC in the United States predicts that CRM will grow by 25 per cent annually leading up to 2005. Will the failure rate grow as well? In a presentation at a CRM conference, Charles Schwab Canada’s Steve Kruspe recounted Boston Consulting Group’s measure of CRM failures as 65 per cent of implementations. That’s the highest estimate I’ve seen, but CRM has had a lot of bad publicity – when it’s not attracting a lot of hype, that is.
This issue cuts through the hype to look at some of the strategies being deployed by industry players, the emerging trends and technologies, as well as the role of data warehousing in accessing customer knowledge.
But first, let’s take a brief look at three views as to why CRM projects fail. Boston Consulting Group offers these six reasons: unclear strategic vision and business objectives; poor understanding of business capabilities required to achieve the vision; decisions driven by systems and software, not business requirements; initiatives not prioritised into sequential, manageable modules – trying to boil the ocean; poor understanding and no active management of risks; and poor leadership and lack of senior management involvement.
Phil King, executive consultant, IT consulting firm CGI, includes some of these in a top 10 listing of reasons, but adds: the CRM toolset is based on someone else’s success; CRM is launched with no regard for enterprise or customer interfaces; CRM is launched without customer input; CRM is considered a one -time event; assuming you have a customer-centric culture because you have customers; CRM is regarded without urgency; and trying to implement “everything CRM” at one time.
That last point ties in with the advice from Deloitte Consulting in their pamphlet How to Eat the CRM Elephant. Avoid a big bang solution, it counsels. Every 100 days “re-scope, re-schedule and revise the project plan to reflect the reality of what you’ve learned and what has changed.” Every 100 days “you enter a creative chaos that comes from the tension between exhilarating wins and exasperating changes to the project plan.” Every 100 days “you gather your people to celebrate the hits, bury the misses and sustain momentum.”
CRM is seen as a growth market. Let’s hope the failure rate takes a major nosedive.
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