To Implement or Not to Implement CRM Systems

Results of two extensive studies on the customer relationship management (CRM) industry were released at the end of June. Unfortunately, solutions providers and world-be clients of increasingly relevant CRM systems will find that today's CRM market and CRM products are … maybe beneficial, maybe not.

The first study was undertaken by PMP Research, a European independent analyst consultancy with foci on the CRM, IT, telecom and professional services markets. Upon announcement of the results, CRM analysts flexed their facetious muscles, crafting headline reading "CRM systems starting to deliver benefits at last" and "CRM systems finally starting to deliver benefits" and "At last CRM systems starting to deliver benefits finally."

Most positive of PMP Research statistics showed that the number of company representatives describing their CRM applications as "very successful" has more than doubled in the past year. In 2004 and 2005, PMP's annual survey on CRM found customers were satisfied at the rate of a measly 4%. This year, the proportion calling their CRM applications "very successful" in delivering all anticipated benefits leapt to 14%. A further 39% label their CRM efforts "successful."

For some time, estimates have stated that 50% of CRM implementations are failures. However, PMP findings show that companies are not giving up on their existing CRM: Sixty-six percent report augmenting their CRM implementations to realize more benefits originally sought. Just 11% have ruled out further improvements completely.

Despite acknowledged success, though, organisations remain reluctant to spend much on CRM systems, and 47% estimate they have invested less than £250,000 (approximately $462,000) on CRM over the past three years. Organizations show little interest in alternative methods of CRM technology sourcing: Only 9% polled indicated interest in hosted CRM applications and only 4% use offshore facilities.

The negatives reported by PMP Research are small potatoes next to mammoth Microsoft's latest survey on CRM. With release of their results, Microsoft PR declared simply that CRM is failing businesses. However, Microsoft tempered the findings, mostly blaming CRM systems salespeople.

One hundred mid-sized UK companies of 100 to 1,000 employees were polled. At top, 66% of sales directors surveyed see CRM as fundamental to the sales process, but only 24% find staff using CRM systems effectively. Furthermore, most sales directors tolerate staff not making full use of the CRM system, and only 22% employ a zero-tolerance policy. And 56% of organizations surveyed do not use CRM systems for sales.

Barriers to effective use of CRM listed in the survey are highlighted by resistant sales staff, specifically things like the perception that CRM systems create extra work for little return, resistance to technology, dislike of being monitored, desire to keep hold of contacts, ongoing CRM training, bad experiences with CRM in the past, CRM not being viewed as strategic, and general difficulty and unreliability.

What useful information can be culled about CRM from the surveys? How about this: CRM, said to be necessary in the modern world, is a product that doesn't deliver half the time. Just over half of successful CRM implementations are satisfactory, and many of these require further purchases. In pitching, salespeople must employ a hard sell pitch on an abstract product they themselves dislike and are blamed for low rates of sale. Not a pretty picture.

Despite results of a third study recently undertaken by Gartner Research showing that the CRM market had grown by 37% overall in 2005, the June 2006 studies imply that lean years are ahead for CRM hawkers unless fundamental improvement is made.