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Why do CRM Implementations Fail?

February 20, 2008

Why do CRMs Fail?

There are many reasons why a CRM project may be considered as a failure.  These reasons differ from each person involved in the project: from the key stakeholders to the end user – each person has a very different perception of what a CRM system is, what it is there for and what the end result should be.

An end user in a sales team who is trying to make his/her sales quota is not likely going to automatically understand the complex relationship between all of the elements of the CRM or the underlying business reasons for implementing the system in the first place.  Indeed, there may even be resistance from end users who even see a CRM as a kind of CCTV camera, allowing managers to see what they get up to during the day!  In truth, there are numerous reasons why CRMs fail but these can be mitigated with a certain amount of understanding of these reasons combined with a little sensible forward planning.

Problems can start right at the very beginning perhaps by senior management who want to implement a CRM but who do not fully understand what a CRM application can/cannot do or how much work is involved in implementing a CRM in for example a large organisation, which has its own business units, business managers, each with their own opinions, biases and sets of priorities.

Poor understanding and even mistrust of Software as a Service (SaaS) CRMs can lead to unnecessary implementations of on-site CRMs which can often be fraught with unseen technical challenges and costs.

When a CRM loses momentum, also expect to observe loss of user enthusiasm and buy in.  For example, if the sales force is not completely sold on the how the CRM system will benefit them, they will be reluctant to spend time using it.

Alternatively, enthusiasm may dwindle at the top levels if Business and IT Managers have a very traditional view of the CRM project, ie. it has a start and an end date and once it is finished it is over – in fact a CRM project never really ends, it evolves as your business evolves.  Continual improvement is the key to a successful CRM project and this should be communicated from the start to make sure everyone is on the same page.

Other critical factor for user buy in is a quick time to value.  This is where SaaS, also known as on demand CRMs really come into their own – you can, with a little no how or minor level of consultancy, set up a CRM for an SMB in a matter of days.

Other common reasons might be:

  • Key sponsors are not involved in the project
  • Unclear CRM requirements and priorities
  • Lack of focus – no CRM Roadmap
  • Metrics for success were not defined before or after the project
  • Unclear strategy to integrate with existing systems
  • IT control the CRM project

“Was that last bullet point a typo?” I hear you ask.  No.  Many organisational leaders assume CRM implementation is all about IT and complex technical challenges and are eager to pass a CRM implementation project to the company IT team or worse, the sole IT person within the company.  They then charge them with the daunting task of implementing a CRM system which will likely involve numerous people across Sales, Marketing and Customer Support teams, all of different backgrounds and with different interests and immediate needs.

In fact, CRM implementation is more about people and processes, analysing and improving business rules, user psychology and even analyzing and improving social interaction; that is, interactions between internal teams and perhaps most importantly between internal teams and their customers.

Of course, a CRM project may well present considerable technical challenges, especially if being done on a large scale in a company or organisation which is well established and which has numerous existing systems which need to be integrated (such as ERP systems, Accounting Packages etc.).

However, with a sensible and well thought out rollout plan, these high risk/difficult areas can be kept to minimum and/or phased in later once you have the key, low risk elements of the CRM in place for the people who most need them first:

  • Sales
  • Marketing
  • Support

Who should own a CRM project, if not IT?

There is a strong argument from numerous CRM implementers that the end users of a CRM should own the project.  Why?  Because a CRM is a user based application and deals with improving the way end users understand and interact with their customers.  They really understand the key problems with the current methods/business process as they are the ones who perform the roles/processes, day in day out.  IT, do not.

The best CRM implementations I have done have been when the users are firmly buckled in the driving seat, with IT present in a support capacity.

Should I use a CRM consultant?

Many companies implement a CRM entirely by themselves or allocate someone within the company to take on the role.  One thing is sure though, a CRM Consultant can help you speed up your implementation and avoid common pit falls.  A few qualities should be considered as desirable though, if not required, in whoever you choose to implement your CRM:

Your CRM implementer needs to be a good communicator and be good with people, able to listen and record user needs, pain points and areas for improvement.  With this in mind, experience with structured requirements gathering techniques and Process/Systems Analysis and Design would also be beneficial.

A CRM Implementation Project should be managed like any other project. The key person in charge should be able to demonstrate basic Project Management skills such as creating project plans and status reports, risk management and change control in order to structure the project effectively and keep it on track.

Obviously training is a key part of a CRM implementation project so your CRM Consultant or CRM implementer should be charismatic and able to conduct training sessions as well as prepare training materials as/if needed.  Remember, it may be possible that some of your end users are not even that confident with computers, so they need to be educated in this area as well as CRM concepts and usage.

There will always be a period of resistance or drops in enthusiasm, which is when its up to the CRM implementer and, importantly, team managers (who need to lead by example) to encourage practice and participation by team members.

What about barriers in a cross cultural / multi language environment?

Most of us work in a multi cultural environment.  Some of us even work in a multi language working environment overseas, as expatriate employees or foreign business owners.  The chances are high that you have customers who are from multiple different countries.   With this in mind, sensitivity to this fact and forethought and planning on how best to implement a CRM, to people who may not even be native speakers of your language, is especially important.

The key person in charge of the project should ideally be experienced in this sort of situation and sensitive to cross cultural/cross language communication and cultural differences.  For example, direct/indirect approach, tone, body language, business culture, meetings, negotiations or conflict resolution.

Summary:  Key areas to successful CRM implementation

  • Develop a corporate CRM culture, involve key stakeholders
  • Define your CRM objectives and prioritize CRM requirements
  • Develop a CRM roadmap and break the project into manageable pieces
  • Integrate your current systems
  • Research CRM vendors and focus on your needs
  • Communicate with all people involved
  • Learn, be flexible, use the tool and evolve your business

Good luck!

CRM Asia Solutions

Andrew Wallace

Founder & Managing Director
CRM Asia Solutions
Web and CRM Solutions for SMBs

www.crmasiasolutions.com

Written by Adam Killam · Filed Under Features 

Comments

2 Responses to “Why do CRM Implementations Fail?”

  1. Adam Killam on February 20th, 2008 7:32 pm

    Great article Andrew!

  2. kanya on February 20th, 2008 8:42 pm

    2 thumbs up!

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