How To Determine If Your CRM Efforts Are Failing

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10.28.09

How To Determine If Your CRM Efforts Are Failing

By Jim Berkowitz

Here are several excerpts from a very good guest post that appeared in Michael Krigsman's, Blog, Going Commando: Four Signs of CRM Failure: CRM failure remains a significant problem in many organizations. For that reason, it's important to explore why so many of these projects do not achieve their potential.

Related: CRM Failure Rates: 2001-2009.

For this reason, I asked Jill Dyché, a Partner with IT services and management consulting firm, Baseline Consulting to write a guest post for this blog. Jill is the author of three books on the business value of technology, including her latest, Customer Data Integration: Reaching a Single Version of the Truth. You can also reach Jill on Twitter - @jilldyche.

Although the warning signs of CRM-gone-wrong may appear vague, they are actually quite consistent across companies, vendor solutions, and development plans. Here are four to watch for…

1. Choosing a bad executive sponsor. Few organizations take time to qualify their CRM sponsor properly. Great sponsors are skilled at articulating business requirements for customer information, funding the acquisition of software products, and managing up effectively. Bad sponsors fail to communicate sufficiently and may be unwilling to intercede when project participants disagree on critical matters. If things go wrong, a poor sponsor may relinquish responsibility for solving the problem or, even worse, disavow the entire project and walk away.

2. Suspending status reports. CRM projects usually start with a bang. When executives push a new focus on the customer, the organization allocates budget, plans the project, purchases software, convenes the development team, and circulates regular status reports to stakeholder. Until one day those reports stop. Be wary anytime progress is suddenly no longer forthcoming. When the project team clams up, it's not good news.

3. Revisiting past decisions. Something is wrong when stakeholders second-guess decisions they've already approved. You'll see this expressed as accusatory questions such as, "Why did the selection team choose that lousy software." That kind of language means confidence has eroded, regarding basic aspects of the project. Historian Barbara Tuchman calls this tendency to reexamine old decisions "disaffection of constituents." It's a warning sign you shouldn't ignore.

4. Focusing on the wrong issues. Some teams spend more time studying competitors' Facebook page, or debating merits of on-line communities, and less time integrating customer data and ensuring the project meets business requirements. Failure is coming when folks succumb to bright shiny object syndrome, focusing on so-called "social CRM" rather than improving customer-facing processes or enhancing customer data quality.

CRM projects that display these warning signs are in real danger.

Should you become the exit champion who calls out warning signs of a CRM effort in jeopardy? It's a tough question because in many organizations, the risks of speaking unpopular truths can outweigh the rewards.

Comments

About the Author:
Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions.

Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives.

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