From mid of 1990's the CRM implementations have suffered through a varied history The most recent survey attempted to discover the frequency and causes of this old issue with regard to the SaaS CRM market. (CRM landmark, 2009)
The CRM implementation failure survey conclusions, according to CRM landmark, 2009 were:
Apparently due to smaller and/or more phased and gradual implementations, the frequency and effects of hosted CRM failures are somewhat less than their client/server CRM predecessors.
A key factor of historical CRM failures - user adoption - appears to be less of a factor with hosted CRM implementations. Nonetheless, change management play a vital role during any implementation.
Primary factors related to hosted CRM implementation failures incorporated a lack of project management during the implementation, lack of executive sponsorship, resistance to change (including hidden agendas), undeveloped product solutions and a failure to clearly describe the project objectives, business requirements and critical success factors.
Probably the most significant project failure factor and one which represents a change from the prior era of CRM applications is the decreased mentioning of user adoption as a key challenge during the implementation process. While an initial assumption would suggest that the hosted CRM applications have de-emphasized user adoption challenges as they are simpler or easier to use than their client/server forerunners, further analysis also reminds us that the range and depth of hosted CRM applications often does not yet match that of prior periods. The media interest surrounding user adoption has also brought this issue to the mainstream which has undoubtedly resulted in better implementation planning and execution. (CRM landmark, 2009)
While user adoption may be improving with SaaS solutions, make no mistake that this issue has disrupted many CRM implementations. A well mentioned study by AMR Research found that even among top CRM vendors, 47% of companies reported serious challenges with end-user implementation that often put projects in risk. Analysis shows that CRM implementations that do not make daily tasks more creative for individuals will not see business benefits. "Our analysis concludes that corporations can only achieve benefits from CRM software if end-users see an application as a blessing rather than a curse," Joanie Rufo, research director of customer management approaches at AMR Research, said in a statement. The most-regularly reported reduction occurs when end-users can continue to perform their job and still meet their goals without ever touching the system. From an end-user's point of view, providing knowledge into the system makes them less important to the company and increases their fear of being easily replaced in the future. Lack of executive-level assurance and failure to secure end-user buy-in were also key inhibitors to a CRM implementation's success, the AMR report says. AMR Research's study results maintain that companies that do not implement CRM strategies by making daily tasks more creative for each individual user are constructing an expensive house of cards that will likely collapse. (CRM landmark, 2009)
It appears almost unrealistic to terminate an implementation research work out without referring to the Standish Group - an analyst group which exists exclusively to track IT successes and failures. In analyzing a previous year Chaos Report, The Standish Group surveyed 13,522 projects and reported that incompetent project successes are 34%. Complete project failures, defined as projects deserted in progress, were at 15 percent. Diminishing in between the two categories are completed but 'challenged' projects which represent 51 percent of all IT projects and are distinct as projects with cost flooded, time overruns and projects not delivered with the right efficient to support the business. The report goes on to say that the level of success can be joined to user involvement, executive management support and having an experienced project manager - in that order. Standish Group executive vice president Karen Larkowski said "Probably the news with the most damaging implications for IT projects is not the number of those that were abandoned, rather it's those that were completed but offer fewer features and functions than originally specified." Ms. Larkowski went on to say "Content deficiencies of more than 50 percent would most likely be considered a failure." (CRM landmark, 2009)
The chart in Appendix…… illustrates the opposite relationship between project size and project success. According to CRM landmark, 2009
CRM Implementation Failure Synopsis
Respondents using CRM solutions in a hosted environment:
92%
Note: Respondents still in implementation were excluded.
Respondents by role:
User: 70%
Consultant: 18%
Other: 12%
Hosted CRM solutions identified:
Aplicor, Entellium, NetSuite, Salesforce.com, Salesnet, SiebelOnDemand
Implementation results identified:
Successful implementation: 71%
Unsuccessful implementation: 16%
Unsure: 13%
Top factors cited with implementation success:
1. A methodical or system project plan and execution
2. Active project management
3. Frequent, visible and verbal executive sponsorship
Top factors cited with implementation failure:
1. Absence of project management
2. Resistance to change / change management
3. Failure to promote executive sponsorship
Top lessons learned with implementation failures:
1. Failed projects don't fail by small amounts
2. Project failures occur along the way, not at the end
3. Don't underestimate resistance to change and hidden agendas
The Reason for CRM Projects Failure
Since CRM changes the way a company interrelates with customers and the daily jobs of thousands of people throughout the organization, there are many possible failure points for it. These implementations are planned in nature, change policy and businesses practices, and require the entire organization to organize closely toward exact goals. Like all difficult plans, risk exists and must be managed. The following segment describes the most common reasons for failure using generally defined categories by TechTarget, 2008:
• Poor objective setting
• Lack of senior leadership
• Inadequate planning and scope setting
• Implementation errors
• Lack of change management
• Insufficient post-implementation operation
Poor Objective Setting
These failures associate to the overall aims of the proposal. In many ways, these are the most common cause of CRM failures, as poorly defined goals make problems downstream efforts and weaken end results.
Failing to Align Initiative with Strategy
As introduced in Chapter 1 and covered in more detail in the next chapter, CRM plans must be properly associated to firm's approach. Unfortunately, most initiatives tend to be based exclusively on gains in efficiency and do not produce any reasonable advantage. Insignificant consideration is classically given to how the goals of the CRM initiative will help strengthen the firm's exceptional competitive advantages in the marketplace. As a result, difficult and expensive hard work result only in minor efficiency increases that come after the big changes initially slow the company down. The overpowering majority of companies fail to align goals to strategy, so much so that it is a shortage for a CRM initiative to begin with a discussion of the firm's competitive advantages in the marketplace. In one case, a financial products and services company spent over $10 million on efforts to replace its highly complex customer exact contract process. This required significant change to a software package that didn't support such methods out of the box. Ultimately the process was bring to an end as senior management became aware that the program was not helping address its more fundamental issues-the obsolescence of certain product lines and the need to expand into new markets. (TechTarget, 2008)
Failing to Anchor the Initiative
Planning and implementing CRM projects is a difficult job requiring knowledgeable program managers able of guiding through policy, processes, people, and technology change while keeping all branches of an organization, several teams, and multiple vendors in performance. We have observed that successful proposals tend to be fastened firmly in the objectives they follow. For example, they are either focused on making select strategic changes, re-staging existing processes, or converting existing processes to Best Practices (often those found in purchased software packages). Some successful programs contain a combination of all three, but most are more focused.
