Has Your Company Faced CRM Failure

Posted 28-Jul-2005 09:20 AM

gaurav_anjali
Member

CRM is very important
but i wanna see how crm has led to failures in different companies, how comapnies have been disillusioned by CRM.
if we can collect examples of different companies who have faced failures after implementation of CRM
plz do post back some company specific examples , i am also looking for them

we can analyse them

Posted 01-Aug-2005 12:46 AM

Gaurav Anjali

If you do a search in Google for "CRM" and "failure" you will get plenty of hits that discuss so called CRM-failures. Sift through them and you are sure to find many articles that provide what you seek.

However, even for the minority of CRM projects that have failed, you need to be very careful to pick out where it is CRM that has failed and where it is the companies themselves that have failed to implement CRM properly.

Unfortunately, CRM has got an undeserved bad press over the last few years for what is much more often the failure of companies to manage the changes associated with the introduction of CRM. This follows a long established pattern of the "failure" of ERP before CRM, of BPR before that and of TQM before that. All require significant changes to how companies operate if they are to be successful. Changes that are often not made properly.

Research by the economists Milgrom, Roberts, Kogut and Zander have shown unequivocally that the implementation of any significant change in operation into a company requires wholessale changes to its business capabilities—the combinations of processes, information flows, organisation roles & responsibilities, rewards & recognition and other factors that provide it with a competitive advantage—if the change is to take hold and become the new business as usual.

Many companies are in too much of a hurry to "succeed", to build these capability foundations properly. Unfortunately, it is these foundations that enable CRM to succeed. Those same companies are often very quick to blame CRM for failure, rather than own managerial inadequacies.

In a nutshell. By all means search for CRM failures, but be careful to distinguish between failures in CRM and failures in the management of change.

Graham Hill
Independent Management Consultant

Posted 11-Aug-2005 10:55 AM

I agree with Graham. My company focuses on failed CRM implementations as they apply to the sales function. Only once have we recommended that the client replace existing software.

As you search for published CRM failures you will find that the "causes" of CRM failure are usually cured by the product or services of the author. A management consulting firm will usually recommend change management. A sales consulting firm will blame the lack of a documented sales process. The CRM vendors usually point to training and application extensions as the cure for adoption failures.

We focus on CRM failures and we are busy. So, CRM failure happens. However, the reasons for the failures are varied and can rarely be blamed on the software.

Posted 11-Aug-2005 02:29 PM

As is often the case, I too agree with Graham. But, let me offer a slightly different view of CRM failure. I am frankly a little dismayed about the constant reference to CRM failure. CRM projects have no greater or lesser propensity to fail than any other initiatve taken by a management team.

Before we go on about CRM failure, maybe we should take a moment to clarify what we mean by "CRM" and what we mean by "failure" It seems to me that most of those who regularly raise the spectre of CRM failure are actually referring to the installation of CRM systems or software. These are, as Graham points out, susceptible to the same exigiencies that apply to other IT or systems applications.

I further suspect that when the critics refer to failure, they are suggesting that these CRM systems have failed to deliver increased customer loyalty or spend, or have failed to deal with the curse of customer churn.

But maybe the systems were not intended to achieve such results in the first place. Maybe the failure is not with the CRM applications but with the expectations that accompanied implementation. At the end of the day, such systems are tools that contribute to more efficient interaction between the company and its customers. One would hope that improvements brought about by the application of CRM technology will, over time, lead to increased levels of customer satisfaction and possibly even to loyalty. But such results do not happen overnight.

If, on the other hand, we are defining CRM as a change in corporate culture and an organizational commitment to the customer, whether or not that involves the use of CRM software, then I would suggest that we need different approaches to assessing success or failure.

Let's not be too quick to suggest that CRM is prone to failure. This field is (or should be) all about building lasting relationships with our customers. It takes some time to determine whether an organization is being successful in this regard.

Jim Barnes

Jim Barnes specializes in Customer Strategy as a member of the CRMGuru Advisory Board. For more information, please visit Barnes Marketing Associates.

Posted 12-Aug-2005 01:15 AM

There is actually more to the root causes of CRM 'failures'. CRM has been very rightly compared by Graham to TQM or BPR. Lot of the initiatives in those areas have failed because they were undertaken in the first place as response to current management fad.

CRM suffers from the same disease. When CRM become popular 5-6 years ago, every manager came up with 'we have to do CRM project now'. So companies jumped on the bandwagon not considering why and whether this is a right and priority initiative. As with most fads, after initial frenzy management attention has switched to other subjects and CRM projects were left to fail. Those, which succeeded, were born from true need and from true perception of CRM as a competitive weapon.

Of course there were other factors contributing to failure:

So, at least from my experience, the true reasons are combination of lack or real commitment behind the CRM initiative, bad execution and unrealistic expectations, stemming from misunderstanding of core CRM concepts.