CRM “in denial” that businesses find it ineffective

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The CRM industry has been accused of being “in denial” about the challenges it faces as a new study reveals that almost half of businesses are turning their back on CRM tools.

A new study by the Institute of Sales & Marketing Management (ISMM) has revealed that a staggering 40% either do not intend to use CRM because they consider that it is ineffective for their business, or have developed their own in-house bespoke systems.

Furthermore, the ISMM’s CRM Survey 2013 suggests that of those using CRM systems only half (54%) are satisfied with them, with 43% indicating that they intend to change their CRM system in the next two years.

Responding to the results, Brian Hawkes, CEO of Foresite SPA, said: “This must be a clear indication for CRM vendors that our business environment is rapidly and fundamentally changing and that their products are in danger of becoming outdated.”

Hawkes highlights that 93% of respondents reported that contact management is the number one key function that they use – “a function that could arguably be equally performed by personal management systems such as Microsoft Outlook or IBM Lotus Notes,” he says. Indeed CRM vendors are increasingly moving more towards multi-tenancy solutions by integrating with other third party applications in order to extend front office functionality; notably’s AppExchange.

Nevertheless the main criticism levied against the leading CRM vendors today is ironically a lack of functionality and flexibility.

“From our experience we believe that the fundamental issue is the way that customers identify, validate and procure from suppliers,” continues Hawkes. “We increasingly find that relationship management is no longer the most important factor in customer acquisition or retention. CRM might be accused of being in denial as it continues to widen front office functionality and ‘link’ awkwardly with back office applications, when the real challenge is to expand commercial functionality beyond the so-called front office to confront the bigger commercial challenges which are having the biggest impact on future sales every day.

“As well as internal drivers, this includes commercial intelligence relating to external factors such as market reactions to your business, competitor performance and retention dynamics i.e. what is really happening in your business. Sales performance involves every commercial business function, many of which are outside the jurisdiction of sales force. Customer relationship is (of course) very important, but seldom is it the leading mechanism in sales growth or sales performance improvements.”

In other findings, of those that are using CRM systems, the market is being dominated by three vendors: (20%), ACT! (17%) and Microsoft Dynamics (16%). Other vendors mentioned included Sage CRM (5%) and surprisingly Siebel, Oracle and SAP, which shared only 7% between them.


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20th Jun 2013 15:24

Comment on this post from the MyCustomer LinkedIn community

If this is a case of businesses not having the tools to do what they wish to do, there are several possible explanations. Are current CRM solutions not up to the job? Have they been oversold? Have businesses made purchases that don't meet their needs?

I think it's a tricky one to unpick. 

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By Imoyse
21st Jun 2013 09:53

Part of the challenge here is that CRM is a very generic term for a variety of solutions.

At Workbooks for example we can do the quoting, orders, invoices and sup[lier order transactions inside the CRM in an affordable and easy way for the average company to use, extending CRM into the commercial sphere the article mentions. but stil under the banner CRM.

So users need to look around and not assume all CRM's offer the same flat basi sales and marketing functions.

A good independent reference point for this is

Ian Moyse


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21st Jun 2013 10:21

Comment on this post from the MyCustomer LinkedIn community

Good article, however it is missing one fundamental cause of CRM application failures, misalignment of strategy to the purpose for implementation. 

Most of my client's CRM implementations fail because they do not align their strategic goals with the objectives of the solution that they chose to implement. 

The application should align people and processes with corporate and BU goals, not serve as a point solution to solve short-term company imperatives.

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