CRM Necessary but Messy

Customer relationship management systems (CRM) are one of the most widely adopted categories of enterprise applications. But investing in a new CRM can be a messy business. As a core system, a CRM needs to interact with data across the entire business. Business processes should change to match the new capabilities. And people need to be trained on the new system. Hidden or unexpected costs can quickly add up, and missteps can result in a major setback, or worse, project failure.

As shown in Figure 6 from our full report, CRM Adoption Trends and Customer Experience, the TCO experience for CRM is low compared with other enterprise applications in our study. Around 26% of organizations exceeded budget projections for the cost of implementing and maintaining these systems, while only 8% had the opposite experience of coming in at less than budget. The majority (66%) find TCO predictable.

CRM is a mature technology. These systems typically include functions such as sales-force automation, estimating/quoting, configuration, marketing automation, customer call center, customer support or field service, and other systems that directly support sales, marketing, and customer service. About two-thirds (64%) of companies taking our annual survey already have adopted some form of CRM. So, if CRM is so mature, what’s the problem?

“All of the major business systems in the study, such as CRM and ERP, come up short in their economic experience and customer satisfaction,” said Tom Dunlap, director of research for Computer Economics, a service of Avasant Research, based in Los Angeles. “CRM is particularly problematic in that it is a customer-facing system. So, there is a lot more at stake in terms of revenue generation.”

To get the most out of CRM, organizations should view it as a strategic investment and take steps to ensure implementation success. Our complete recommendations for a successful deployment are in our full report. However, with any large deployment, it is smart to start by thinking about people. As noted in the full report, the greatest risk in a CRM project is that line-of-business users will not actually adopt the system in their daily activities. Sales personnel in particular can be notorious for their reluctance to share knowledge about new prospects or their daily communications. CRM systems are designed to make information on pending deals transparent and widely available up and down the management chain of command. Recognize and address the people side of change required to make CRM successful.

The full report provides an overview of key concepts in this space. We also examine CRM adoption and investment trends, providing data on how many organizations have the technology in place, how many are in the process of implementing it, and how many are expanding implementations. We then look at the return-on-investment experience, total-cost-of-ownership experience, and which type of applications are the most popular.

This Research Byte is a brief overview of our study, CRM Adoption Trends and Customer Experience. The full report is available at no charge for subscribers, or it may be purchased by non-subscribers directly from our website (click for pricing).