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CPR for CRM - White Paper

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A groundbreaking study into why so many CRM projects fail, how to succeed the first time, and how to recover from failing projects. Includes research into Salesforce.com, Microsoft Dynamics CRM and other leading CRM platforms used to automate sales, marketing, call center, and customer service.

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CPR for CRM - White Paper

  1. 1. Inside this Executive Summary… The Elusive Path to Profitable Customer Relationship Management CPR for CRM: An in-depth study A better way Customer relationship management (CRM) projects were known for high failure rates 15 years ago when modern CRM solutions were being introduced. How have failure rates changed after 15 years of technology evolution? 30%-60% of CRM projects will still fail and need CPR; and failure can be prevented if it is addressed at the earliest stages of the project. This Executive Summary examines how failure can be avoided or corrected and is an introduction to the full whitepaper, which may be downloaded via: www.c5insight.com/downloads About the research Beginning in 2001, analysts reported startlingly high failure rates for customer relationship management (CRM) projects. Meanwhile, companies around the world have continued to pour millions of dollars annually into CRM software, training, and consulting initiatives. Recently, however, reports of CRM success rates have decreased, and little has been done to dig deeper into the causes of failure and path to success. Assumptions have been made by businesses acquiring new CRM software that, with the great leaps that the technology has taken, CRM failure rates are now on the decline. The purpose of this research was to provide fresh statistics into CRM success and failure and, if failure rates remained high, to offer insights into why this happens and what differentiates successful organizations from those who fail. The findings from this research suggest that failure rates in 2014 remain in line with what they have historically been for 10 or more years. Results show an optimistic low-end failure rate of 16% and a pessimistic high-end failure rate of 46%. Although “failure” can be a matter of definition, this study reports a failure rate of 38%. This aligns with failure rates reported since 2001 that range from 18% to 70%. When removing the outliers, the rate seems to consistently fall between 30% and 60%. There were, however, some counter-intuitive findings about how many times organizations experience failure, and what happens to CRM budgets based on success and failure. What has, perhaps, changed as a result of advances in CRM solutions are the leading causes of failure. Failure seems to have very little to do with the software – but has a great deal to do with what organizations expect from the technology. Furthermore, companies that are experiencing a problematic CRM project tend to focus on addressing the symptoms of failure rather than the root causes of failure. A better way Customer relationship management (CRM) projects were known for high failure rates 15 years ago when modern CRM solutions were being introduced. How have failure rates changed after 15 years of technology evolution? 30%-60% of CRM projects still fail, requiring CPR intervention. Failure prevention requires proactive measures at project inception; read more to find out how to chart the right path from the get-go, or course correct a project that is currently encountering issues. This Executive Summary examines how failure can be avoided or corrected and is an introduction to the full whitepaper, which may be downloaded via: www.c5insight.com/downloads About the research Beginning in 2001, analysts reported startlingly high failure rates for customer relationship management (CRM) projects. Meanwhile, companies around the world have continued to pour millions of dollars annually into CRM software, training, and consulting initiatives. Recently, however, reports of CRM success rates have decreased, and little has been done to dig deeper into the causes of failure and path to success.
  2. 2. Unexpected Causes The result fits the “definition of insanity,” with organizations trying variations of the same failed CRM strategies (sometimes even with new solutions) expecting a different result. The graph to the right represents study participants’ number of implementations, while the table below details reported issues in attaining full CRM adoption. The research suggests that the true causes are more subtle and lie beneath the surface – in the form of faulty assumptions, poor decision-making processes and misguided perceptions of what commitment to a CRM project looks like. #1 Adoption Obstacle: Integration with Other Software 35% #1 Lack of integration with other systems / software 35% #2 Budget constraints 31% #3 Lack of skilled employees to manage marketing automation 26% #4 Lack of training 23% #5 Complexity of CRM software 22% #6 Lack of tailoring to our business processes 19% #7 Poor integration with sales and marketing initiatives 18% #8 Not sure 14% #9 Poor infrastructure to collect and analyze data 13% #10 Lack of feedback from sales on evaluating leads 13% #11 Slow performing software 12% #12 Buggy software 7% #13 Other 7% Top reported issues to attaining full CRM adoption Does this sound familiar? 57% 26% 17% How many times has your business unit implemented a CRM solution? This is the first time This is our second implementation We have implemented CRM 3 or more times 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Just CRM CRM Plus One Other System CRM Plus Two Other Systems CRM Plus Three or More Other Systems How Many Systems Do You Have to Use to Get Your Job Done? Satisfied Unsatisfied
  3. 3. Sink or Swim? Like a vessel at sea on unfamiliar waters, CRM failure can loom up like an iceberg that suddenly appears through the fog. But are these experiences the real issue, or merely the immediate focus of a much larger problem? Q: Is my CRM in danger? A: Yes, if you are experiencing any of the following:  Low user adoption  Costly change orders  Complaints that CRM slows productivity  Necessity for add-ons  Project delays  Platform changes  Failure to produce measurable ROI A change in perspective Much like steering a ship clear of a visible iceberg, will a CRM solution solve the problem – or does a much more dangerous risk of tearing a hole below the surface of the ship exist? Instead of focusing on the surface-level symptoms, consider the controllable causes of what lies beneath the surface of your project. Do any of these sound familiar?  Insufficient training  Lack of project leadership  Proper goals and governance not in place  No process for continuous improvement Download the whitepaper to learn more about these symptoms of failure, and how to address the full root cause. www.c5insight.com/downloads What Does CRM Success Look Like? Companies successful in implementing CRM have proven the value that it contributes to their organizations. In fact, companies that are satisfied with their CRM projects don’t view the projects as complete but instead report that they will be increasing their CRM budgets at a much higher rate than those organizations that are dissatisfied with their projects. Additional research shows:  CRM investments return $5.60 for every dollar spent: Nucleus Research.  81% of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition.  86% of customers are willing to pay more for a better customer experience.  CEOs expect a 256% increase in direct social media engagement with customers within 5 years – primarily at the expense of traditional marketing channels.  Recent research for C5 Insight clients projects a return on CRM investment between 150% and 525% for organizations with $50 million or more in revenue. None of the above statistics quantify the innovations that many companies report developing as a result of a continuous focus on their customer and on their customer-facing systems. Many of these innovations are never thought of at the inception of a CRM project, and are what can open competitive gaps that can take years to close.
  4. 4. Find out more… Is it time to challenge your organization to join the elite group of successful CRM implementations? Request an Executive Briefing C5 Insight has summarized its experience with CRM success into a number of executive briefings. Connect with the experts to schedule a briefing with your executive team on this topic. Briefings are focused either on “CPR for CRM” (for organizations currently struggling with a problematic CRM implementation) or “Deadly Sins of CRM” (for organizations considering launching a new CRM initiative). Briefings last 30-90 minutes and are provided at no cost to qualified organizations. Conduct a CRM Audit and Health Check As noted within this document, the success of a CRM project can be a matter of perspective. To determine if your project is attaining the desired level of success, and to develop a plan for improvement, consider conducting an audit and health check. C5 Insight’s standard process for this includes:  Executive interviews to establish the definition of success and current utilization patterns for CRM; Management meetings to see how the solution is being used to manage them.  Process reviews for current CRM process documentation, training material and research to determine the processes and practices that the solution was designed to support.  User interviews to gain real-world exposure to how the team is using CRM to conduct daily business.  User surveys to obtain anonymous, objective feedback from users on the usefulness of the CRM implementation.  Adoption analytics to determine the utilization levels of CRM across the organization. This includes both standard adoption metrics as well as a review of reports to gain an understanding of the impact of CRM on the bottom line of the business.  Technical review of the solution configuration, performance and integration with other systems to identify bottlenecks, performance issues or design issues. The LUCK Roadmap – (Re)Start CRM on the Right Foot Most successful CRM projects were started (or restarted) with a roadmap that makes expectations and plans clear to the entire team. C5 Insight offers a road mapping process that requires 3-6 days of your team’s time, followed by delivery over a 4-8 week period. The result is a comprehensive roadmap that your project team can use to chart its path to success. Why C5 Insight? C5 Insight is focused on helping its clients do only one thing – work together better. With unparalleled experience in the most effective collaboration and relationship management solutions, C5 provides business expertise, management consulting, and technology implementation services. The team is comprised of authors, developers, MBAs, and certified trainers who hold certifications in Microsoft SharePoint, Microsoft Dynamics CRM, Salesforce.com, SQL Server, .NET application development, and other technologies. C5’s experts have written books, published digital training, run public education courses, and have been published on many international venues. C5 Insight maintains a blog to freely share knowledge, both business and technical, and has developed a robust set of add-ons that contribute to the market and improve how effectively its own clients are served. Contact us today: Phone: 704.895.2500 Email: luck@c5insight.com Website: www.c5insight.com Download the full version of CPR for CRM to explore common causes for failure and discover best practices for prevention. www.c5insight.com/downloads

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