Why are there so many CRM failures?
One of my favorite quotes is “Happiness is expectation management”, and nobody knows better how to mismanage expectations like software marketing and sales people. However it is important to remember that it takes two to tango, and CRM purchasing decisions are often influenced, if not made, by sales and marketing executives. Add to this group some IT executives, who are famous for buying “silver bullets” every now and again, and you get very potent team of Kool-aid creators and consumers all in the same package.
It is interesting to hear the typical responses, when you ask a CRM executive sponsor about their expectations.
The top 3 answers usually are:
1. We need to improve our salespeople efficiency, so they have more time to make sales calls;
2. We need to get more leads to increase sales;
3. Our competitors “installed” CRM, so we cannot afford not to.
The only common theme in these three responses is that they predict a very high probability of failure.
Chris Bucholtz in his Inside CRM blog wrote recently:
I wonder at times whether CRM vendors have created their own fantasy lands, where customers’ CRM systems spit out leads and marketing people sit around pushing one big button that does everything for them. When you set expectations like that, there’s no way vendors can deliver.
I would like to site another quote. This one is from JP Rangaswami, the italics are mine:
Project failure and success seem to depend on saying, “Are you able to accurately articulate and honestly collect what the requirements are?” and “Are you able to express the right estimates?”…. Too many times, the collection process is weak, because the customer is not easily able to articulate [his needs] in language the people [on the project] understand. [S]oftware estimation is not a trivial exercise; it is still an art rather than a science.
[F]ailure is usually a characteristic of unwillingness to recognize change and to cover up….It’s like a salesman putting forth a forecast to management…without ever talking to the customer. Management [is] blissfully unaware of the fact that the information is false.
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Greg–
Do you think this is the same dynamic as in the software world, where sales sets crazy expectations that developers can’t meet? Or is CRM a little deeper than that, where sales AND other entities in the equation (marketing, consultants, the CRM media, etc.) are unwittingly setting the bar too high?
Chris,
IMO CRM entities are not as process oriented and detailed as other business units, and as such they don’t set up goals as specific as needed. Customer Support pillar of CRM usually fairs much better then Sales and Marketing because they focus on SLA, workflows, and other specifics, where the Sales and Marketing are too conceptual and don’t often articulate their needs in terms which can drive accountability. They surely do not like to tie more sales commitments to CRM investment, even though it can work if applied organically.
I have been involved in 3 large CRM deployments in my career and invariably the largest hurdle is adoption, but even this is only a sympton. The real underlying problem is that the companies lacked discipline around the sales process. We all know how hard it is to automate a broken process. They seem to forget that a CRM system is just an automation tool for an existing process. They seemed to think that since sales is based on human intraction it was ok to leave it softly defined and devoid of accountability. The success came when, seperate from the CRM project, the sales process was defined and the sales force was held accountable to following it.
Excellent observation Marc, I’ve had similar experiences.