CRM failures... these too will pass

article on CRM failure from change management expert Dutch Holland

This will not be another article arguing the success or failure rates of CRM implementations. Suffice it to say,...

not every CRM implementation has met, or will, meet expectations. The key point is that we are learning and getting better about turning investments in CRM into results. What are we learning? Well, some lessons are hard learned. Like this one: successful CRM is more than having the latest red-hot CRM application up and running, but not used. We've all seen more than one technical success that was a business failure. It's ironic that we have to learn this lesson over and over again every time a new IT application "genre" appears. Sometimes I think we are just blinded by our own expectations -- or by the IT vendors that claim that their system works miracles. We are also learning that a number of actions beyond technical implementation need to be taken to ensure the highest chances of success for a CRM initiative. We are learning that even the best of applications won't produce a return on investment if no one uses it. In fact, we think that utilization is the real key to success. The equation below points out that all three terms are required for CRM success: CRM Success = quality of strategy X quality of application X utilization Note that the multiplication sign in the equation suggests that if any one term is zero, success will be zero. And when utilization is low or zero, success is zero. So what is a framework that can be used to ensure that all three terms in the success equation get proper attention and balance? Figure One shows the key management action areas required for CRM success. 1. CRM Strategy Development – Without a strategy, a CRM initiative will go nowhere. A CRM strategy must support the business strategy and make economic sense to an organization's members…including WIIFM ("What's in it for me?") for those key folks who have anything to do with customers. 2. CRM Program and Project Management – Putting a sophisticated IT application in place while preparing employees to use it calls for disciplined and rigorous program management. While the IT project is likely to have intense project management, user preparation must receive the same attention. 3. CRM System Implementation – Intensive efforts will be required to ensure that the selected system meets the needs of the CRM strategy and falls within the domain of what is doable for the organization from both a data and a user point of view. Once selected, technical implementation must proceed with integrity and should be closely coordinated with the preparation and training of the user population. And systems integration will have to be done in such a way that the IT organization will know the "ins and outs" of the system before the technical vendors depart. 4. CRM Data Integration – Even the best of systems will be of little value if the data environment lacks definition, integrity, and consistency. Data issues are particularly critical in a sales environment where control of data/information is so closely held by people in sales positions. Without systematic processes for the collection and integration of high quality data, implemented in parallel with the system itself, all will be lost. 5. Operations Integration – No CRM initiative will be a success unless CRM processes and tools are aligned and highly utilized by all members of the organization who have a customer relationship responsibility. Operations integration includes the redefining of customer processes to align with the CRM strategy and to fit with the CRM application. In addition, individual and team roles must be redefined to align with processes and tools, and employees must be trained and put under a commitment to use CRM as needed for company success. The bottom line is that we are learning to attain CRM success through the school of hard knocks. But intense management attention to the five action areas above will produce positive results. As a final thought, any organization unwilling to take aggressive and robust actions in each of these five areas would be strongly advised to stick with the system they have now…rather than to launch what is sure to be a big-time failure. Dutch Holland, Ph.D.,is CEO and founder of Holland & Davis LLC ( His firm specializes in Vesting Information Systems, ensuring that systems are fully utilized to generate targeted ROI. Dutch focuses on strategic change, organizational design, and management of technology. Dutch has led strategic change initiatives in a variety of industries and has taught at the University of Houston, The University of Texas and the Wharton School's Securities Industry Institute. His many articles on the management of change have been published in academic journals as well as national industry publications. Dutch is the author of Change is the Rule and Red Zone Management: Changing the Rules for Pivotal Times. (

This was first published in August 2002

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