A huge 80% of customer relationship management (CRM) projects in
Europe will fail by 2003, research has predicted
Analyst organsation, the Gartner Group, claims 65% of CRM projects
currently fail and that the figure will climb significantly over
the next two years.
High failure rates will continue until organisations learn the true
uses of CRM, says Gartner, and analysts have predicted that the
failure rate will drop to 50% by 2005, as this learning curve
occurs.
The Group blames the high rates of failure on companies rushing to
implement a CRM solution when they run into difficulties.
"Companies come to CRM when they have a crisis and then too
frequently see it as a software quick fix, ignoring the hard
changes - until they jump up and hit them," commented Jennifer
Kirky, research director at Gartner. "It's only when they feel pain
that they start to think about integration, motivation and
co-ordination."
But Gartner's findings have been greeted with suspicion by CRM
vendors and other analysts. "That's a very high figure," commented
Theresa Jones, research analyst at the Butler Group.
But she agreed with Kirky's reasoning. "If you are at crisis point
and think CRM will dig you out of a hole, it's not going to work.
You're going to keep digging."
CRM vendor, Siebel Systems, refuted the findings and denied any
evidence of the trend. "There's a big miss-match with the things we
are seeing with our customers and what market analysts are saying,"
said Phil Robinson, vice president of international marketing at
Siebel.
Siebel rival Oracle also believes that Gartner has gone overboard.
"80% is perhaps a tad pessimistic and maybe shows Gartner's
conservatism," commented Oracle e-business marketing manager Phil
Wood.
New kid on the CRM block, RightNow Technologies, warns users
looking to implement CRM projects to "try before they buy" and
points out that if CRM is not applied to a specific business
problem, it will fail.