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CRM: Dream or nightmare?

Larry Dignan CNet

Published: 16 Apr 2002 16:56 BST

Despite CRM's popularity, though, many CRM implementation projects fail to meet their initial goals. Gartner research shows that more than half of CRM projects fail to deliver on expected savings and business advantages. And a recent Merrill Lynch survey of CIOs at large companies found that 45 percent of those surveyed were not satisfied with CRM installations.

Finding companies willing to come clean about their CRM problems is difficult, however. Most companies are unwilling to disclose details of a failed or flawed project since doing so might incriminate IT departments or customer service organizations, or, worse, worry shareholders and customers.

Nonetheless, most companies that have installed a CRM system have had problems -- even those that consider their CRM implementations a success.

Lisa Harris, CIO for Gevity HR, a large human-resources outsourcing company with $3.2 billion in revenue last year, said her company's CRM installation was on time and on budget, but there were a few potholes along the way because of internal politics and technology problems.

"The bigger you are, the more business rules and processes you have," she said. "Everyone has to compromise and work together because you are changing processes and the culture."

On the people front, there were departments that had never had access to customer data and had to be trained in how to work with it. Internal bickering was common: some departments didn't want to share data with others.

Maoz argues that the failure rate for CRM installations isn't much different from that in the early days of enterprise resource planning installations, which he said historically flopped somewhere between 50 percent and 75 percent of the time in the 1980s and 1990s. CRM installations so far have been the domain of what Gartner describes as "Type A" companies, or leading-edge businesses. "Type B and Type C enterprises (late adopters) are still debating whether they should undertake such initiatives," the company said in a report.