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CRM: Dream or nightmare?

Larry Dignan CNet

Published: 16 Apr 2002 16:56 BST

If companies fail to properly plan a CRM installation, the failure rates surge, analysts and technology buyers said.

Yankee Group analyst Sheryl Kingston said many companies have rushed to adopt CRM technologies without much thought and have dropped lots of dollars on applications that haven't worked. "The biggest mistake is that companies don't spend a lot of time or energy on the data," she said. "Without the data the apps may be great, but they don't work."

CRM software is only a small part of an equation that includes changing business practices to focus more on customer needs and reorienting databases so customer data is more easily found, analysts said. Big CRM software makers like Oracle and Siebel concede that point.

"The big question is whether a company is implementing technology or a strategy," said Herb Hunt, chief technology officer for Siebel. "For CRM to be a success it is critical (that) customers have a strategy."

Gartner surveys back up that assertion. Roughly 75 percent of CRM projects that fail through 2004 will do so because of poor business decision-making, Gartner concluded.

Kingston said CRM projects run into trouble when customer data is scattered across multiple divisions and is stored in incompatible formats. "Information is (stored) in all these different areas, spreadsheets, databases, the sales guy's head," Kingston said.

Companies also fail to streamline business processes and train employees to use the new CRM gear, creating new pitfalls, Kingston said. Large companies have a harder time prepping for CRM initiatives than do smaller ones, she added, due to their more complex information systems and sometimes Byzantine organistional structures.

Successfully implementing a CRM system within a large company is "a profoundly difficult thing to do," Maoz said.