CRM's FailureA Google search of ‘CRM Failure’ currently returns approximately 2,960,000 hits. The subject is a common theme at IT, marketing, business and systems sciences conferences.Research and advisory firm, the Gartner Group, have claimed that nearly 50% of all CRM projects failed to meet expectations. InfoWorld puts the figure at 77%. There are numerous other figures cited but mostly within the 50 – 80% range. Whatever the true figure, that is an astonishing failure rate. Would you buy a car with an expected failure rate of over 50%? An ever increasing number of businesses have now experienced the frustration of ineffective CRM deployment and far from improving profits and cementing relationships, some companies find themselves in the worst case scenario where their CRM systems wind up alienating long-term customers and employees1. Industry “hype” has sought to, and to a certain extent successfully, overshadowed CRM’s problems. This is not surprising given that the marketplace is now flooded with a variety of CRM systems including customized systems, out-of-the-box packages, online hosted systems, and even “build your own”. (A goggle search of “CRM Software” will return 12,400,000 hits). With so many players, it’s easy to create market hype. (No one is going to say their CRM product is unlikely to meet your expectations, or worse will be a total failure which will ultimately cause serious damage). Yet, an Infoworld survey of chief technology officers found that close to 30% of respondents believed CRM to be one of the most “over-hyped” technologies they had seen. The cost of CRM failure is dramatic and can adversely affect many areas of a business. It can negatively impact upon:
So why does CRM have such a high failure rate? [1] Coltman T. “Where are the Benefits in CRM Technology Investment?” (2006) Proceedings of the 39th Hawaii International Conference of System Sciences |
