Sunday, October 21, 2007

Why Hosted CRM Implementations Fail

CRM implementations have suffered through a spotty history since the mid 1990s. Everyone has heard the countless stories of CRM implementation failures — and the unfortunate people that were removed from their organizations as part of the downfall. This most recent survey conducted by CRM Landmark attempted to discover the frequency and causes of this long-standing issue with regard to the SaaS CRM market.

The CRM implementation failure survey conclusions are as follows:

  • Presumably due to smaller and/or more phased and piecemeal implementations, the frequency and effects of hosted CRM failures are somewhat less than their client/server CRM predecessors.

  • A key factor in historical CRM failures - user adoption - seems to be less of a factor with hosted CRM implementations. Nonetheless, change management plays a critical role during any implementation.

  • Primary factors related to hosted CRM implementation failures included a lack of project management during the implementation, lack of executive sponsorship, resistance to change (including hidden agendas), immature product solutions and a failure to clearly define the project objectives, business requirements and critical success factors.

  • Possibly the most notable project failure factor and one that represents a change from the prior era of CRM applications is the decreased citing of user adoption as a key challenge during the implementation process. While an initial inference would suggest that the hosted CRM applications have de-emphasized user adoption challenges as they are simpler or easier to use than their client/server predecessors, further analysis also reminds us that the scope and depth of hosted CRM applications often does not yet match that of prior periods. The media attention surrounding user adoption has also brought this issue to the mainstream which has undoubtedly resulted in better implementation planning and execution.

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