Why do CRM projects really fail?

Having just read yet another self serving ‘six reasons why CRM projects fail’ article which follows the usual well trodden path: CRM projects fail because CRM software isn’t easy to use. However we at XYZ software company have developed some really easy to use CRM software, so problem over, no more failed CRM projects.

Degrees of ease of use are not the reason CRM projects fail. CRM applications have been intuitive for years now, and I find it a trifle bemusing that each new kid on the block seems to position their product as the easy to use offering. Maybe it’s a safety in numbers thing – or perhaps a lack of market research thing – but I think there’s ample scope for software developers to be a little more original in differentiating their offerings.

In terms of why CRM projects really fail, I think the number one culprit is a lack of goal and process orientation. To put this more basically – too few organizations embark on CRM projects with well defined outcomes in mind. There’s often an expectation that good things are going to happen, rather than any specific understanding of what they may actually be. Even those organizations that do understand what they are trying to achieve often fail because they don’t embed (and persuade users to follow) the set of business processes necessary to attain these goals. As a consequence the CRM system becomes a hive of directionless activity, where little is achieved as a result.

To illustrate better what I mean about goals and processes, a company may feel that it is losing out on sales because it’s failing to consistently follow up and nurture the leads it is receiving. A goal for the CRM project may be to improve lead management. In order to do this a whole range of processes need to be implemented in order to achieve this goal. So this might include processes to log and qualify leads, nurture the relationship until the lead is developed to a sales ready status, assign to the most appropriate salesperson, recycle the lead if it turns out to be long term, escalate leads that haven’t been followed up in a timely fashion etc etc.

This seems simple enough, but it invariably doesn’t happen. I’m not a 100% clear in my mind why not, but I’ll take a punt that most vendors feel the business process specification part falls outside their comfort zone, and most customers either don’t recognize that it needs to be done, or are insufficiently experienced with CRM technology to make a good go of it. The fact that this falls between two stools is a great pity because CRM technology has the potential to create significantly profit generating efficiencies by either automating previously inefficient manual processes, or facilitating new effective business processes that couldn’t exist without enabling technology.

In fairness to the software vendors, some organizations will struggle with the discipline necessary to generating high returns from CRM anyway. However it sure would help improve the returns from CRM overall if vendors stopped fixating on the technology rather than the process, but as Abraham Maslow noted – ‘When the only tool you own is a hammer, every problem begins to resemble a nail.’