This white paper looks at the top three reasons that CRM initiatives fail to achieve their goals and provides clear, practical recommendations for ensuring that your CRM initiative avoids these pitfalls and delivers desired returns.

1. W H I T E
P A P E R
The Top 3 Reasons CRM Initiatives
(Still) Fail—And How to Avoid Them
Executive Summary
Customer relationship management continues to be a vital strategy for achieving
higher profitability, improved productivity, lower costs, stronger customer retention, and
greater insight into customer and prospect behavior—whatever the economic environ-
ment. But while CRM success rates have risen dramatically over the years, many
companies still struggle to achieve the return on investment they anticipated. This white
paper looks at the top three reasons that CRM initiatives fail to achieve their goals and
provides clear, practical recommendations for ensuring that your CRM initiative avoids
these pitfalls and delivers desired returns.

2. CRM Success Fundamentals their products. Nothing gets their prospects’ attention faster
than a distinctive product feature their competitors can’t
In spite of global economic challenges, many businesses match. But discussing features and functions is the easiest
continue to make investments in customer relationship part of CRM. When it comes to the actual features of
management (CRM) systems a high priority, recognizing CRM software, there is only a limited number of variables
that strong customer relationships are vital to their that come into play, and in fact platform and architecture
business success. These organizations seek higher are probably bigger success factors and differentiators
profitability, improved productivity, lower costs, stronger between CRM solutions than the features themselves.
customer retention, and greater insight into customer
However, when you look past the ones and zeroes, you
and prospect behavior. These companies’ confidence
start to see the truly complex side of CRM: the human
in CRM’s value confirms the business community’s
side. Diverse and sometimes vast teams of individual
consensus that the early age of bloated CRM projects and
users have to be considered for a company to reap the
high-profile failures has been superseded by an era of
full benefits of CRM. At that point, the number of variables
success stories and widespread evidence of CRM’s ability
a company must account for in CRM selection and
to generate returns on investment.
implementation can grow exponentially.
Yet, although it is true that major improvements have been
The key issue at the heart of the “human side” of CRM
made in CRM technology and outcomes over the past two
implementation is user adoption. Even the best CRM
decades, it is also true that many companies still struggle
system will fail to deliver significant ROI if the end users
to implement their CRM system effectively and achieve
aren’t able or willing to use it correctly—or worse yet, if
the results they expect from these powerful information
they don’t use it at all. Many organizations select and
systems. In fact, in response to a recent Forrester survey,
implement a terrific software solution, only to struggle with
only one third of enterprise-class organizations indicated
getting their employees on board with the new system,
that their CRM applications significantly improved
not to mention the customer-centric culture required to
their end users’ productivity. And only half responded
support it, which in many cases is also a major change for
that their CRM vendor’s professional services team
the organization.
could offer significant technical skills to help move the
implementation forward.1 Change management is clearly an associated key issue.
There’s only one thing more difficult than getting a person
This same survey documented over 200 specific problems
to change the way he or she works, and that’s getting
companies had with their CRM implementations. But
entire teams of people to change the way they work.
the real attention-getting finding concerned the types of
Change—even the positive kind—is challenging and
problems it uncovered—a
requires astute planning and leadership to gently guide it
finding that sheds some
though to fruition, especially in larger corporations.
Only 33% of the problems interesting light on the
true challenge of CRM
companies experienced These people issues are just as important—if not more
implementation. Only 33% so—than the technology issues CRM customers face,
had anything to do with of the problems companies and they can as easily cause a project to fail. So it makes
technology experienced had anything to sense that CRM providers should not only offer a solid
do with technology. The lion’s software product, but also a world-class professional
share focused squarely on services team and full complement of supporting services
problems concerning people, process, corporate strategy, to help their customers deal with these very complex user
and other non-software types of issues. issues. With the right mix of technology and services, the
human factors of CRM can be effectively managed with
These results warrant further investigation. Could it be
profitable results.
that companies implementing CRM could improve their
success by focusing less exclusively on the software and Sadly, many CRM vendors completely overlook this critical
more on managing the organizational change necessary aspect of CRM. Their organizations are designed to sell
to implement it? This white paper will focus on exactly software licenses and (often costly) technical implementation
that: the top factors—completely above and beyond the services, not to manage a customer’s overall transition and
software itself—that cause companies to struggle to reap ongoing success. When a greater range of CRM services
the rewards of their investment in CRM, and what they can is available, the customer is often rightfully wary that CRM
focus on to improve their odds of success. vendors and consultants may be determined to prolong and
over-complexify a CRM project simply in order to generate
The Most Overlooked Factor in the greatest number of billable hours.
CRM Success: People Such short-sighted tactics do little to genuinely ensure
CRM success. The critical nature of human factors at
As you would expect, CRM providers spend a lot of work in a CRM initiative demands that you focus as much
marketing effort promoting the technological features of attention on the people using the system as you do on
the software. It’s not the software that will give you the
1. Band, William. Risk-Proofing Your CRM Initiative.
DestinationCRM.com. March 1, 2009. URL:
http://www.destinationcrm.com/Articles/?ArticleID=52945
Pivotal CRM | White Paper 1

3. ROI you want; it’s the people who implement it, use it, and adequately calculate the value the enterprise will
manage by it. gain from a new CRM system, they must establish
a baseline measurement of what current CRM
With this in mind, let’s take a look at some of the top processes are, whether they are implementing
reasons CRM implementations fail, even when they their first CRM system or replacing one they have
involve excellent CRM solutions and are driven by savvy, outgrown. Then they will have a valid way to
well-intentioned technology and business professionals. measure the enhancements the CRM system will
bring. But because many executives feel like they
Reason #1: Companies Can’t know their company so well, they tend to disregard
this very important practice. Just because there
Effectively Define Success is a documented customer relationship process
in place today doesn’t mean it’s being followed
Strategic CRM implementations are often major projects, properly, and seldom does a company have an
requiring significant corporate commitment. Given this, accurate record of the rate and costs of errors and
it is reasonable to suppose that all companies pursuing redundancies, or of the time it takes to perform
CRM initiatives have sound and well-articulated goals certain tasks or processes. But without this
and rationales for their CRM projects. Yet almost 20% of information, measuring the efficiency, productivity,
Forrester’s survey respondents cited strategy and poorly and accuracy gains from CRM can be very difficult.
defined requirements as significant barriers to return on Documenting current CRM processes can take
their CRM investments.2 The extra time and effort, but you will never know if your
unfortunate result is that most CRM practices have truly improved unless you can
executive leaders have no way document what those practices look like today.
If you haven’t agreed on a
to prove their CRM systems
definition of success, how have produced the ROI they
3. Establish Success Metrics. When executives
will you know whether you’ve have a clear picture of the current state of their
had hoped for—or any ROI at
CRM practices, the improvement goals become
achieved it? all, for that matter—because
much clearer. So do the metrics they should use
they neither defined their
to objectively measure their progress toward
targets in advance nor
those goals. And because no single metric can
determined how they would be measured. If you haven’t
adequately measure ROI from a complex CRM
agreed on a definition of success, how will you know
system, executives must decide which metrics
whether you’ve achieved it?
would have the biggest impact on their company’s
Executive leaders must take the time up front to decide strategic goals. There are input metrics that
what successful ROI would look like for their specific measure the accuracy and validity of data entered
situation. They must know what their customer relation- by system users. Also available are process
ship processes are today, as well as how they hope to metrics, which measure the execution of individual
change them for the future and how they will evaluate their sales team members on a more qualitative scale.
progress against these goals. Laying the groundwork for Finally, outcome metrics measure the desired
CRM success in 3 key areas can help ensure you get the outcomes of the CRM process: customer calls,
ROI you expect: presentations, demonstrations, and orders, for
example. Top managers should use a mix of
1. Craft a Clear Business Case. Crafting a solid these metrics to gauge their company’s overall
business case may sound simple. It’s not. Many performance toward meeting their CRM goals.
companies try to shortcut the process by assem- Because these metrics have differing levels of
bling a business case from basic rules of thumb granularity, it will become clearer where managers
or by simply mirroring another organization’s CRM need to spend their time to correct CRM problems
initiative. This almost always proves to be a costly early in the process. There is no single “right
mistake. Every organization is unique, with unique answer” in prioritizing CRM goals and metrics—in
processes and considerations, and thus every fact, many companies find that the qualitative
CRM implementation is unique. Executives must “soft” returns are infinitely more meaningful to their
recognize the idiosyncrasies of their organizations business than the quantitative “hard” returns—as
that might affect the outcome of their CRM initia- it is all dependent on the company’s unique goals
tive. Having a clear problem statement goes a long and strategy.
way toward keeping the implementation on track.
And while constant steering corrections will still be No CRM system will deliver significant ROI without a clear,
required, those navigational changes will be much overarching strategy to guide its implementation and
more effective when guided by the proper execu- use. That means everyone in the enterprise—from top
tive vision of the problem to be solved. management down to the end users of the system—must
clearly understand what they are trying to accomplish with
2. Document the Current CRM Condition. the tool.
Business process engineers know that in order to
2. Ibid.
Pivotal CRM | White Paper 2

4. This direction must come from the top. Executive • What is my budget for getting the software installed,
sponsors must develop a clear business case for their and will I have to hire expensive outside consultants
new CRM software. They have to agree on strategic and to help?
tactical goals for what they hope to accomplish and a
The CIO’s concerns are every bit as valid as the CEO’s.
realistic timeframe for getting it done, then work to gain
But the CIO is measured by technology concerns instead
buy-in throughout the organization.
of business issues. Without constant steering corrections
in the interests of the business goals of a CRM project,
Reason #2: Companies View the final product is at risk of becoming an IT solution, but
not a business solution. It may be on time and on budget
CRM as an IT Project, Rather and meet a range of technical criteria, but whether it
aligns with corporate strategy is another matter entirely.
Than a Business Initiative
Armed with an effective business case and a clear problem
statement, your enterprise can generate a great deal of
Reason #3: Companies
CRM momentum. The corporate vision and core company Automate a Misaligned Process
values set the course for a successful implementation. Yet
As powerful and helpful as CRM software can be, at its root,
we still see many CRM systems
it is not performing any feats of magic. Ultimately, like other
end up as little more than a
forms of software, CRM simply streamlines and automates
Without constant steering management reporting tool,
what would otherwise be time-consuming, challenging, or
corrections in the interests leaving the actual customer
repetitive processes. If these processes are misguided or
experience virtually unchanged.
of the business goals, the broken to begin with, automation will not fix them.
final product is at risk of Why is this? It has very little
to do with the software. But it Therefore, in order for an enterprise to garner a significant
becoming an IT solution, but return on its investment in CRM technology, its customer
has everything to do with the
not a business solution focus of the organizations who relationship processes must be sound, well documented,
implement the system. and precisely aligned with the mission of the enterprise itself.
When evaluating a CRM system, most executives start out Process alignment is an area in which most businesses
asking exactly the right questions: have room for improvement. The majority of enterprises
find it difficult to agree on what their current processes are,
• How can the system make doing business with us much less what they should be. Or worse: they discover
more positive? their processes are misaligned only after a new system is
• How can we use the system to drive repeat sales and implemented and end-user training has begun.
encourage customer loyalty?
If your organization attempts to implement a strategic CRM
• How can the software streamline our processes and system without having your existing or desired processes
increase business insight? well aligned and documented beforehand, you will be in
These are very good questions to ask. And if they stay for a rough ride. Without process clarity and alignment,
at the forefront of the actual execution, they will guide automation is unlikely to produce clear benefits.
the enterprise toward a successful implementation
In many ways, business process alignment is actually
and positive ROI. However, once these questions are
more important than the software itself. Once a process
answered to top management’s satisfaction, that’s where
has been aligned, understood, agreed to, and well
their guiding force tends to lose steam. For at this point,
documented, the technology requirements tend to flow
many executives mistakenly assume their job is done.
naturally from the process. Conversely, no software
So they take their hands completely off the steering
product can deliver business value from a process that
wheel and hand it to the IT department for selection and
was off-kilter from the start.
implementation. Now CRM has been demoted from
“corporate strategy” to “IT project.” This is not to say that the software is unimportant—in fact,
the importance of process clarity and refinement under-
Naturally, IT departments are crucial to successful CRM
lines the value of having a highly adaptive and malleable
implementations. But many top executives tend to forget
CRM software solution that can precisely model your
that the CIO operates from a much more granular set
desired processes—but it does suggest that even the
of job concerns—concerns that focus more on software
best technology will fail to deliver results if the processes
packages than customer relationships.
themselves are misaligned. Approach CRM initiatives
The CIO’s questions sound more like: as an opportunity for greater process clarity, alignment,
definition, and refinement, rather than an excuse to lay
• What is our deadline for implementation and can we software on top of existing processes—or worse, to allow
meet it with current IT staff? technology to impose new cookie-cutter “out of the box”
• How can I get our other 10 data repositories to talk to processes that don’t fit your business—and you will
this new system? experience far greater success.
Pivotal CRM | White Paper 3

5. The Solution: The 3-Legged Stool CRM implementers realize how flawed this approach
is. Because each company’s business processes
of CRM Professional Services are different, their usage of a CRM system will
always be unique. Generic training materials and
The three components that always impact a successful courses will therefore always fall short. CRM vendors
CRM implementation are people, process, and know this, and those who are genuinely committed
technology—the famous three-legged stool (if any leg to their customers’ success take the time to
fails, the stool collapses). People need to embrace and understand your unique needs and processes and
use the system in order for the company to achieve its design customer training programs and tools to best
goals. Process must be effectively defined and mapped address your company’s specific demands.
within the system for it to generate results. And finally, the
technology must be sound, with all the right features in 3. Proper Metrics and Rewards. It’s been said,
place, the right fit to your business, and the right ties to “Show me how you’re compensated, and I’ll show
other enterprise systems and data sources. you how you behave.” As much as we would like
to think users will embrace a CRM system just
Many CRM implementations fail because both the because it has been launched, reality proves
implementing company and the CRM vendor assisting otherwise. Many organizations report deficiencies
them focus too narrowly on the “technology” leg of the in the areas of inter- and intra-organizational
stool alone. In contrast, the most effective CRM software collaboration, business–IT collaboration, and
vendors build on these three performance measurement aligned with customer-
principles jointly and never facing goals. A lot of this comes down to setting
Many CRM implementations losing sight of the all-important out clear ways of measuring and encouraging
people and process factors. usage of the CRM system. It’s important to provide
fail because both the
They help customers build a incentives to end users in a way that aligns their
company and the CRM stable three-legged stool by behavior to the goals of the enterprise. The
vendor assisting them supporting and assisting in most astute companies find creative ways to tie
focus too narrowly on the all three elements. With this adoption incentives to employee compensation—
“technology” leg of the stool robust, threefold approach the straightest line between the desired behavior
to CRM services, they can and actual performance. Then users know exactly
advise customers not just "what’s in it for them" and gladly exhibit the
on the technical elements of the implementation, but behaviors needed to achieve CRM success. But
on every facet that might impact user adoption and as with other elements of CRM implementations,
ultimate success. CRM vendors that understand this there is no single “right way” to do this—there are
principle will not just offer great software, but also provide many organizational culture and process factors
a comprehensive portfolio of supporting services that that must be considered in setting CRM metrics
can help companies succeed in all areas of their CRM and incentives. A good CRM vendor will provide
implementation, including: strategic assistance to your company to help you
find a program that will work best to achieve your
1. A Comprehensive Communications Strategy. unique business goals.
Understanding your CRM goals and strategy is
crucial, but communicating this to users is just Because this human element is so crucial, it pays to
as important. That’s why the most successful choose a CRM provider with a strong professional
companies start communicating with CRM end services philosophy and organization to mentor you and
users early in the process, preferably before your leadership team through the process. Look for a
they select a CRM system or even define its CRM vendor that is also a services leader with a strong
requirements. All stakeholders and eventual track record of implementing successful CRM systems
end users need to have some kind of role or with companies your size. The professional services team
representation in CRM planning and roll-out should comprise seasoned experts in the areas of user
to have a sense of ownership in the project’s adoption, process guidance, and change management.
success. Clear, two-way communication about a
CRM project’s goals and all efforts to incorporate The benefits to this kind of experienced guidance are
and address the needs of diverse user groups immeasurable. Working with experts invested in your
must start early and continue throughout success lays the groundwork necessary to dodge the
implementation and beyond. A vendor that costly mistakes that plague so many unwary CRM
understands the importance of CRM user adoption customers. You’ll have a clear picture of success. There’ll
and buy-in will offer assistance with planning and be no question whether or not you’ve achieved what you
implementing a comprehensive communication set out to accomplish with CRM. And you’ll be on your
strategy to complement the software project. way to enjoying a real advantage over competitors in your
market space.
2. Effective End-User Training. Training is an area
where many CRM vendors tend to cut corners.
In an effort to achieve an economy of scale, they
standardize their end-user training with cookie-
cutter materials and methods. The most effective
Pivotal CRM | White Paper 4

6. CDC Software CRM Professional Conclusion
Services—The Best in the Business Software is only one component of a CRM initiative’s
success. Of just as much importance are the strategic
Despite the fundamental importance of “customer- and change-management efforts required to drive process
centricity” to the concept of customer relationship improvement and user adoption. Without the right approach
management, many CRM vendors themselves focus more to these human and business aspects of CRM, even the
on products and features than best CRM software will fail to deliver desired results.
their own customers’ needs
Because it takes more than and success. Not so with For this reason, companies embarking on CRM initiatives
just software to ensure CRM CDC Software. CDC Software must look at more than just software in selecting their
starts with the market’s most CRM solution. They must look past a checklist of features
success, it makes sense to flexible and innovative CRM to consider a CRM vendor’s overall services philosophy
examine more than just software solution, Pivotal CRM—an and approach—whether they’re just looking to sign a
in evaluating a CRM vendor adaptable solution that can software-license contract and walk away, or whether
model even the most complex they’re interested in a long-term relationship and in
and unique processes with partnering to ensure ongoing CRM success.
ease. But they don’t stop there: CDC Software’s CRM
Professional Services organization ensures that customers Businesses must therefore evaluate the full range of
realize strong ROI by focusing on the human factors of assistance, consulting, services, training, and support that
CRM success, just as much as the technology. a CRM vendor can offer them. This is important even if
your company does not ultimately wish to take advantage
CDC Software’s CRM Professional Services team of all of these services. A vendor that is genuinely
offers the depth and breadth of services to address all committed to your success recognizes that such services
business’ demands: a continuum of services and proven can be vital to achieving CRM ROI and should make them
methodologies; a range of pricing options for a predictable, available to you, but not force them upon you: they should
cost-effective implementation; custom training and effective be able to provide the strategic support you need, to the
knowledge transfer to continually maintain a high degree degree that you need it.
of performance; and an unwavering commitment to
customers’ success. This portfolio of individual services Because it takes more than just software to ensure CRM
ensures customers can select exactly the implementation success, it makes sense to examine more than just
support and strategic consultation they need—as little or software in evaluating a CRM vendor. It’s worth carefully
as much as they desire—rather than feel they are writing a considering the range of professional services available
blank check by engaging assistance. to support your CRM initiative and what a CRM vendor’s
service portfolio and partnership approach says about
With experience garnered from hundreds of their commitment to your overall success.
implementations worldwide at companies from a broad
range of industries, CDC Software’s CRM Professional
Services team brings to every project a deep knowledge
of best practices and standards, as well as a profound
understanding that every company is unique, and that
when implemented thoughtfully, appreciation of this
uniqueness can make CRM a true embodiment of your
company’s competitive differentiators.
Pivotal CRM: The Market’s Most Innovative CRM Solution
To learn more about how Pivotal CRM and the CDC Software CRM Professional Services team can meet your organization’s unique
needs and help you achieve CRM success, call us at +1-877-PIVOTAL or visit us at www.PivotalCRM.com.
Copyright © CDC Software 2009. All rights reserved. The CDC Software logo and Pivotal CRM logo are registered trademarks
and/or trademarks of CDC Software.