Learning from $30 Billion Failures
"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.
Percentage of CRM
implementations that failed
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
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
Will your CRM really be a "solution" or become part of the
problem? Surveys taken for CRM implementations that failed
- 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
- 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.
Post-implementation regrets by
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
Post-implementation regrets by
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
- 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