You can search the Internet and look at technology trade magazines and find list after list of why CRM (Customer Retention Management) implementations fail. To me, most of these "articles" are laundry lists from many "post mortem meetings". We can talk for days about "How the executives did not buy in to the solution", or "the employees, especially users, did not believe in the selected system" even "poor project management" are great excuses for spending thousands and even millions of dollars. Please don't misunderstand me; these are all valid reasons to project failure while the blame is placed on users, executives, project managers and even the solution itself. No one discusses the beginning of the failure point.
A simple scenario:
. A large company's Sales Department decides that a CRM solution is needed to help increase sales, customer retention and track support calls. Different CRM vendors meet with the Company's executive staff. CRM sales representatives explain why the business should choose their product. From my experience as a consultant for Amdocs ClarifyCRM, which is extremely customizable. The sales person informs the business that the software can be customized to accommodate any business requirements, such as billing, invoice generation, provisioning and even Human Resource utilities. Expectations have now been set. I, being a good ole southern boy, have said that "Windshield wipers can be put on a goat's rear, but it just doesn't make sense. Just because you can do it doesn't mean you should. One system is not the "do all, be all" solution even though you can customize it to the nth degree.
Many companies send the SMEs (Subject Matter Experts) to training for a 2 to 5 day course that only touches the surface of the applications use and does not allow for complete familiarity of the system. The SME is now expected to quasi train a selected group of end users and executive staff on the operation of the newly purchased CRM system. To me this is almost like asking a college freshman to write his Master's Thesis. He may understand the subject and know how to write, but he doesn't have the complete experience to complete the task. A test system may or may not be installed so the company is not truly ready for the implementation process to begin. Soon the CRM vendor's PSO's (Professional Service Organization) analyst team arrives like a flood. The documentation processes and gathering of business requirements begin. The analyst team will meet with users and SMEs to gather this information. Here is where the failure begins. Even though the SME has been trained he is still not truly a SME, and the PSO consultants provided by the vendor are not experts in the exact methods and processes of this particular company and in many cases they do not have any experience within this particular industry. Keep in mind that the only way a Professional Service Organization generates revenue is by billable hours.
Now the process begins and so does the failure point. James Thurber said "It is better to know some of the questions then all of the answers" and so is the case with the PSO They have templates of questions to ask, and begin meetings with user groups and SMEs to drive out requirements on a system that the company's employees do not really understand. Users are asked, about drop down list items, data capture, process and workflow, user rights or privileges and integration. There is about 2 to 4 weeks dedicated to filling out a design matrix. The executive committee is asked to sign off on the matrix and the design document is written. All this has been done with know true knowledge. The design document is the accepted or signed off on and the implementation begins. During the implementation process training is developed based on the design and customizations being added to the system. As the system changes due to change requests and future enhancements the training must be updated.
A major aspect of the CRM implementation is data migration. Due to project timelines, data is mapped, custom fields are defined and the data is migrated with no real data clean up. The entire focus of the project is on the actual system and not any type of foundation or integrity. In many cases the CRM system is CBAR (Customized Beyond All Recognition)
After 9/11 Donald Rumsfield referring to the "War on Terror" he stated "There are things we know we know, things we know we don't know, things we don't know we know and things we don't know we don't know. The business and CRM world are the same so a change request process is put in place that can eventually stretch the project timeline and increase the cost to production.
The most successful projects that I have been involved with, and I have lead projects that have won the Aberdeen 10 Most successful CRM implementations of the Year, began by allowing the users and SMEs use an OOB (out of the box) system and compare it to their current CRM process and applications. Training on the OOB system is a much easier process then reinventing the wheel. Utilizing the CRM vendors training programs offers a true and complete foundation for each and every user. The users now have more of a complete understanding of the system, especially if the OOB system goes live with only minimal administrative customizations and changes. With a deeper understanding of the application and actually using it, the business can now explore the changes or gaps in the system. These changes should be well managed. Many CRM implementations are not completed for months and even with high cost and low Return on Investment (ROI). Most importantly is the data integrity.
How are the changes managed? Changes to the system should be grouped based on priority, system module, and time. A recommended methodology to manage and organize changes is the SCRUM process. Within the scrum process a sprint is created which usually is no longer then 2 to 4 weeks from beginning through to production including development time. As I stated in the beginning most articles on CRM implementation failures are a laundry list from post mortem meetings.
Top 10 reasons CRM implementation fail and the answers using the above methodology:
To answer one such laundry list examine "Top 10 Factors For CRM Implementation Factors" from http://www.crmsolution.com/top10failure.html.
Items in bold are quoted.
1. "Not defining clear objectives for the software implementation is a commonly cited contributing factor associated with failed implementations. A successful project is one that attains its objectives, but it is amazing how many business entities undertake a CRM solution with vague, unidentified, immeasurable goals. "
All CRM vendors have a basic or OOB system that will achieve many of the objectives of the company immediately. These objectives may be very basic, but offers the business, SMEs and users the opportunity to gain knowledge of the system and allow for business objectives to be defined more clearly based on experience.
2. "Not attaching measurements to your objectives is a similar contributing factor. Labeling a project unsuccessful requires some degree of measurement, and if a company does not calculate pre-implementation assessments of critical objectives, it becomes impossible to pinpoint the issues responsible for either success or failure. While it may be a generally accepted fact that a project is not successful, unless the business can identify where and why, it is doomed to repeated failures."
After using an OOB system critical objectives can be defined and allow pre-release assessments of these objectives. Using the SCRUM methodology the project team can measure the objectives urgency, cost and time to production.
3. "A failure to review and define the key performance indicators for the company is the reason many a project descend into disaster. Evident, but an amazing number of implementations do not define clear metrics. Unclear metrics or poor metric quality is an often-overlooked factor in the dividing line judging a system implementation's failure or success."
Using the OOB system users will have a greater understanding of the CRM application. This understanding combined with the expertise of the particular business model and process, users can define critical, necessary, and precise metrics.
4. "Over-customization of the software particularly during an early implementation phase can spell the demise of a project. While lack of defined business objectives is a sin of crucial importance, going to the other extreme, is perhaps the second most common reason Client Relationship Management solutions are not utilized by users. Do not attempt to implement every feature inherent in the software. This tactic guarantees failure."
By implementing the OOB system there are no customizations of the software during the early implementation process. Using the experience of the users to define key customizations and enhancements that are prioritized and implemented in a strategic manner using release management, offers the ability to monitor the amount of customizations and the affects on performance. Keep in mind that one system is not a do all, be all system.
5. "An equally common reason for failure is planning to customize the selected solution before utilizing it in a test environment. Even identified, possible holes in software functionality can often be worked around, thus avoiding customization."
Utilizing the system in a test environment is a good idea. Most companies will test the system with sample test data from the real world. This is better then no testing at all. By placing the system in a production type role where users are performing their day-to-day functions will identify the holes or gaps and the work-a-rounds that may apply. Allowing the users to discover work-a-rounds provides user involvement and peer-to-peer training.
6. "Not incenting your employees to use the system contribution to user adoption challenges. Possibly the most important single quantitative gauge of success is the user adoption rate. If only the self-motivated utilize the system, it is not successful. Use a combination of rewards and procedures to spur users' buy-in, and recognize that this is necessary for all personnel, including executives."
One of the greatest incentives to users is involvement. Utilizing the experience of the users and allowing them to generate ideas on system improvements will also generate excitement.
7. "Insufficient training and support delivered during key periods can burry a project. User adoption rates drop off for a number of reasons, but two rank high on the list - lack of training and support prior to and post implementation. Sometimes this occurs not because the training and support are absent, but because it is not provided in the appropriate format. A remote sales force, for example, may not be able to rely on in-house personnel for remote support."
In many cases a customized system is released and a complete training strategy must be developed and implemented. This can be a high increase in cost. By utilizing the OOB system, training is much easier. The CRM vendor offers training on the OOB system. As customizations and enhancements are added training is simpler for the company to provide. This gives each and every user a true foundation.
8. "Another reason for poor user buy-in is incorrect, incomplete or bogus data. Marketing cannot direct concerted successful campaigns if prospect information is inaccurate. The same holds true for both the Sales and Service divisions, and, indeed, in these lines of business, erroneous records can bring operations to a complete halt, ensuring dismal failure."
Simply stated, the CRM application collects data and relates it. Data scrubbing and deduping should be a very high priority. Users want access to exact and accurate data, not the ability to search for possibilities. Dedicated data cleanup will insure user buy-in.
9. "Failure to align the business operations of the divisions utilizing the system virtually guarantees the project's outcome. CRM solutions generally involve three often disparate departments with separate processes, cultures, and aims. Numerical targets exist for each division and these can be contradictory. Unless these areas are aligned harmoniously prior to the project's initiation, failure is likely. Not only must operations be aligned across sectors, but they must share consistent processes where those processes interact with the customer. Each salesperson must perform the same process to take a lead to client in the same manner. Consistent, aligned processes cannot be translated into system workflow unless they are documented and understood. Undocumented business practices are unreliable and leave large margins for inefficiency and breakdown."
When the OOB system is implemented users from all business operations will follow the basic process within the system. Users, understanding the current business workflow, can easily adapt to the basic workflow contained within the system. As users gain experience workflow processes may be documented and aligned then implemented into the CRM application.
10. "Not planning for change and delineating a specific method of handling each out-of-scope incident can doom a project. Besides user adoption rates, two other important gauges of a successful CRM implementation are budget and cost overruns. Both of these are simple, quantitative evaluations easily measured by objective analysis. If a project was supposed to be completed within six months, but actually took in excess of a year, users will view it as unsuccessful and become reluctant to associate with the project. Project duration estimates are exceeded for numerous reasons; inadequate resources, timely unavailability of resources, the changing global marketplace, and many others. Exceeding the budgeted dollar figure for installing and using a CRM system is a result of many factors, but the primary culprit is creeping project scope."
Scope creep is a huge culprit causing project timelines and budgets to increase creating a more complex system to develop and implement. By using an agile process with short design to production time frames scope creep and budgets can be more controlled. Your time to production is shortened. Changes are not discovered during the design, development or testing phases, but are discovered by users. These changes are more solution oriented for the users because they are documented based on usage of the OOB system.
In all projects the (highly) customized CRM system becomes the base or foundation while in actuality the original OOB implementation should be the baseline and all changes and customizations should enhance the original functionality.