Why Many CRM Implementations Fail?
Many Organisations, CRM is all about acquiring new customers, keeping your existing customers, increasing sales to existing customers and servicing the needs of those customers when they have issues with the products or services your company sells,Customer Service and Marketing since all three of these areas are focused on the same data set your current and future customers. For other companies, CRM is used as the foundation to build robust applications that address their organization’s unique needs. CRM is becoming one of the most important delivery systems for customer and company information to any workforce as they interact with current and future customers.
With all the potential benefits of CRM, it’s easy to understand why so many companies are seriously considering implementing a CRM solution. CRM is one of the fastest growing areas for IT spending. Unfortunately, according to industry analysts approximately fifty percent or more of all CRM implementations fail. That’s a frightening number that should scare any company’s CFO and CIO contemplating the substantial investment of implementing a CRM solution.
I have seen other bloggers have written that the reasons for CRM failure are a lack of vision, incomplete vision or failure in executing the vision. A reader might say, “OK. I had a vision. I thought it was a pretty good vision and we worked hard executing that vision. Why did we fail?” I believe it’s easier to understand the reasons and signs of failure by looking at more specific causes. This list includes many of the causes most often encountered that you can control. Note how many of these conditions contribute to one another.
1. Going it alone. In other words implementing CRM without engaging an outside CRM Architect. In my experience, this is the number one reason for failure. Unless you have a CRM Specialist on your staff, you don’t know what you don’t know about CRM. You’re likely to treat CRM just like another piece of software. It’s hard to be unbiased about your business needs and goals. Using an outside CRM Specialist benefits your organization by bringing in an impartial objective view, a wealth of CRM knowledge, experience, successful strategies and CRM best practices.
2. Treating CRM as just another piece of software. A successful CRM implementation is more than the software. Don’t short change yourself by installing CRM as is out-of-the-box. CRM has to be tailored to fit your business needs. Businesses that treat the CRM implementation as an IT project almost always fail. Often senior or maybe mid-level management are involved, but not the users that are expected to use the software every day. Implementing CRM requires that you pay close attention to the needs of your employees who will be servicing your customers. Get them involved in the design and implementation. Without their support, your CRM implementation will fail.
3. Insufficient training. All CRM software publishers tout their software is easy to learn and easy to use, leaving many companies with the impression that all you have to do is just install the software and sit back and watch your ROI grow. A key goal of CRM is to automate your business practices and leverage CRM to improve your work efficiencies. This requires configuring the software, customizing the system to fit your needs and perhaps adding 3rd party solutions to CRM. To make the most of your investment you have to train your users on how you want them to use the CRM system and identify the results that are expected.
4. Poor user adoption. If your employees are not using the CRM system or using it correctly, there is no way your company can benefit from the CRM solution. If everyone isn’t using CRM, you’re missing key pieces of information which negatively impacts other departments in the company.
5. Users don’t trust the data in CRM. If your employees don’t trust the data, they won’t use CRM. This is most often caused by users failing to do a good job at entering the requested information. Employees may believe that it takes too much time, it’s not their job, it’s busy work or all of that information is not required for them to do their job. They may not be aware that others in the company are dependent on all of that information they enter. As a result employees skip fields they feel they don’t need or abbreviate the information they do enter. This impacts other areas in the company. For example, those prospects and customers not entered correctly are missing key data and are often not included in marketing efforts. Lack of trust in the data leads to poor user adoption and CRM data that is not current which only further contributes to this unfortunate situation.
6. The CRM solution doesn’t help users accomplish their job. Businesses judge employees by the quantity and quality of their work product. If the employee is in sales, they are evaluated on gross revenue and margin. A customer service employee is assessed on the number of support cases resolved in a period of time. A poorly architected CRM solution that doesn’t address the user’s needs to complete their job functions effectively forces the user to seek other means to get the job done. This action usually drives users to use tools outside of CRM. Eventually, we are right back to #4 and #5 above.
7. Duplicate Data Entry. Requiring users to enter the same information multiple times at different places in the CRM system. You’re lucky to get users to enter the data once correctly, let alone multiple times. For example, when you have fields from the account record that appear later say on an opportunity, quote or order, they should inherit their values from the account record instead of having the user reenter the date more than once. Take the time to make sure your design provides a the smooth flow of the data from one form to another.
8. Users view CRM as Big Brother. Too often management’s focus is to use CRM as a means to monitor what employees are doing with their time, all day, every day by having the employee enter all their activities. This is especially common in sales. CRM is not a time clock. This often leads to users thinking CRM is a waste of time and the end result is they don’t use the system as an act of rebellion. Employees respond much better when they are measured on results and not on activities.
9. Communication Failure. Support by senior level management for the CRM system is critical. Senior management needs to formally communicate the reasons why the company is implementing CRM and the need for employees at all levels to support it and use it dependably. For CRM to succeed you have to have management support, starting with the top level all the way down the food chain and management must hold employees accountable in using CRM.
10. Management doesn’t support using CRM. Because so many CRM systems have failed, one of the reasons managers do not support or are resistant to a CRM system is because they had a bad experience with CRM in the past. Employees are quick to learn what they need to do to please their manager. If their manager doesn’t believe that using CRM is important or is required, employees will follow their lead.
11. CRM implementation is never complete. Your business processes are always changing and adapting to the changing needs of your business environment. Your CRM system needs to adapt as well. If you don’t update your CRM as you change you continue to use outdated and inefficient workflows which may no longer apply. This can lead to #6, #4 and #5 above.
There is usually no one single reason for failure of a CRM implementation. In most cases when a CRM implementation fails, we see several of these conditions. While each may seem like a small matter, be aware a lot of small holes will eventually sink a big ship.
If you want a CRM implementation to succeed, you need to make CRM the primary source for the delivery and collection of current and future customer data. Give your employees good reasons for them to use CRM. Pay attention to the details, i.e. the number of key strokes it takes the user to accomplish a task and eliminate duplicate data entry. Your CRM system should be designed to enforce your company’s business processes and workflows with the goal to make using CRM the easiest way for employees to accomplish their jobs and better serve your customers.