The news this week that UK Plc doesn't seem to believe it's getting its money's worth from CRM software should come as no surprise to anyone. Nonetheless the findings of the Vanson Bourne/JD Edwards survey of 100 UK IT directors and CIOs make for depressing reading.
A mighty 91 per cent of those surveyed said that overall IT investment had delivered tangible benefit - and I'd be interested to know exactly how that was measured - but 76 per cent said that CRM had delivered less value than their applications, such as supply chain and ERP.
One of the problems of course is that too many companies raced into CRM as the marketing bandwagon hurtled past without considering more realistic considerations that should have been taken into account up front. The horror stories of back office ERP should have been ringing loud and strong when the bulk of CRM spending got underway, but no, the chequebooks were flashed and the – largely standalone – CRM projects got underway.
More to the point, they got underway with nary a thought given to the need to undergo a close examination of the underlying business processes. I've said it before, but if a company's fundamental premise is that the customer is a bleeding nuisance, then all the software packages in the world are not going to improve the situation. All that's going to happen is that the lousy customer service stance will become more automated so that companies can be indifferent to their customers more easily.
Of course that early spending took place in the midst of the dot com boom when IT directors and budget controllers took collective leave of their senses and were ready to spend vast amounts of money on unproven projects. It's only three years ago, but already it's being conveniently forgotten that profit was a dirty word; openly questioning the long term commercial viability any technology issue was something akin to belching in front the Queen Mother on the faux pas scale.
With the dot com hangover still with us, it's clear that many companies are waking up to realise that the money they spent on that lovely CRM system is returning none of the investment made in it because it sits in splendid isolation. In contrast, older applications – such as ERP – have had time to bed in and now have a sort of familiarity that lends them respectability.
Talking to CRM vendors over the past couple of months, a common theme that emerges is that the size of orders has declined. There are no more five year, big bang extravaganzas. Instead there are five one year phases to the same project and each phase is being carefully budgeted with a keen eye to how quickly that money is being reaped back on the bottom line.
For some vendors, this seems almost offensive. With pained expressions, some shake their heads sadly and talk of this bizarre predilection among users to want to know what they're getting for their money. All very regrettable obviously...
But it's not of course. It's entirely sensible and it's been a long time coming. More power to the customer, say I. Vendors are having to scale down their expectations, but it was only to be expected after years of flushing money down the IT drain.
No-one should doubt that CRM can deliver tangible benefits to the bottom line. There are more than enough examples of successful implementations in action that have enjoyed substantial ROI. It is to be hoped that if this week's survey were to be repeated in five years time, the results would be very different.
The survey can be found at: