Europe’s CRM project failure rates to peak at over 80%, says Gartner

The failure rate for CRM projects will rise from the current 65% to over 80% by mid-2003, according to Gartner research. It will, however, fall back to less than 50% by 2005 as an increasing number of companies embark on CRM initiatives without understanding the full extent of change required.

“Companies come to CRM when they have a crisis and then too frequently see it as a software quick fix, ignoring the hard changes - until they jump up and hit them,” said Gartner research director Jennifer Kirkby. “It’s only when they feel the pain that they start to think about integration, motivation and co-ordination. It seems to be an initiation rite.

"We would advise companies to kick off their CRM projects with a pilot ‘minefield’ so they find out in practical terms what is really wanted and have carefully chosen guides waiting on the other side."

Gartner believes that the risk of CRM failure will continue to be high until organisations have learnt to refocus their CRM initiatives in the areas that top the poll for causing failure. Gartner’s research has identified these as being:
• “We want it done by Christmas” Refocus on board level education to understand that CRM is not a project or a quick fix but a mapped out endeavor that will last many years and needs to be implemented in stages.

• “I’m not paid to do that” Refocus on changing behavior by adjusting compensation and encouraging and nurturing the right skills. Changing internal working practices and spreading information and knowledge on customer requirements.

• “So what do I do differently then?” Refocus on convincing individuals that CRM is not just hype, but a key skill required to win in the changing economy. Then show them how they fit into the big picture and that their actions can make a difference to the whole organisation.

• “We know what they want” Refocus on ensuring there is a relentless focus on customer requirements by listening to and acting on feedback – most CRM initiatives are aimed at what the organisation thinks the customer needs.

• “Send someone to that exhibition for brochures” Refocus on looking beyond CRM as a software application – the greatest danger is that becoming customer-centric is seen as a short-term technology installation project.

About Gartner, Inc.
Gartner, is a research and advisory firm focused on helping businesses understand technology and drive growth. Headquartered in Stamford, Connecticut, the company consists of 4,600 associates, including 1,400 research analysts and consultants, in more than 80 locations worldwide.

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