Posted on by Chris Farias

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Has nothing really changed for 3 decades?

In the mid 1980s, when CRM as a term did not exist, I remember reading an article on the failure rate of IT projects in the world of the mainframe which stated it was 50%. 

Over the last few months, I’ve been perusing articles on the same topic and it seemed like nothing has changed!  The “failure” rate was still unacceptably high!  Here’s some statistics I found at www.crmsearch.com:  

  • 2001 Gartner Group: 50% Failure Rate  
  • 2002 Butler Group: 70% Failure Rate  
  • 2002 Selling Power, CSO Forum: 69.3% Failure Rate  
  • 2005 AMR Research: 18% Failure Rate  
  • 2006 AMR Research: 31% Failure Rate  
  • 2007 AMR Research: 29% Failure Rate  
  • 2007 Economist Intelligence Unit: 56% Failure Rate  
  • 2009 Forrester Research: 47% Failure Rate 

All these rates are based on surveys of companies that implemented CRM.  On the other hand, consultants operating in this field perceive a much lower failure rate – for example, Barton Goldenberg claims a 90% success rate. 

But Why?

So, is there a huge disconnect in terminology and perception, or are we so dumb that we haven’t figured out how to improve performance?  Here’s an interesting 2004 interview of a Gartner executive who talks about dimensions that I believe are still valid – http://customerthink.com/reports_crm_failure_highly_exaggerated/  

For the company upgrading or implementing a CRM, it is most important to understand the parameters that apply, so that you are setting up yourself for success, not failure.  It is possible.  Like Barton, we’ve been doing this in our IT practice for years.   

However, the IT provider will always take your money, even if the provider knows that the customer refuses to implement recommendations.  After all, providing services for a fee is what puts bread on our table.  But what’s the point in contributing to failure rates, increasing dissonance and unhappiness, and creating more pain for the organization? 

 

Part 2 will be published in my next blog article. 

 

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