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Things that caused CRM failure

Updated on November 26, 2019
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Henry is an expert in enterprise resource planning and has mastered various strategies of system implementation process.


Customer relationship management software suites, while being among the most used pieces of business technology, are also prone to high failure rates. Reports and studies state that about 30 to 50 percent of all CRM deployments fail to achieve their objects or simply fail from the get-go.

These statistics have shown to be quite consistent year after year, something that should be cause for concern and act as a drive for business owners to perform critically important risk analysis and risk mitigation measures.

Elaborated below in this article are some of the reasons CRM systems can fail:


Lack of clear objectives: Quite a few business owners implement CRM systems without a clear set of quantifiable goals. Lacking these leads to aimless projects and a questionable sense of completion. There must be a set of written plans that are clearly thought out with specifically set objectives to complete. This must be done in conjunction with a focus in outcomes concerning the user, customer, and the business as a whole. CRM implementations projects are most successfully when they are undertaken with project objectives that are designed to satisfy company, customer, and user goals.

Simply installing the application software without the deliverance of pleasant user experiences is a recipe for guaranteed failure.

Lack of a strategic plan: As Lee Bolman said; “A vision without a strategy remains an illusion”. Indeed, if you want your CRM implementation project to turn out successful and provide tangible benefits to your business, you must formulate a detailed strategy which will dictate how your business goes about the operation. You have to have a clear idea of your starting position, the final destination to reach, and the best route to get there.

The art of making decent use of CRM itself is a strategy aimed at growing mutually rewarding and profitable customer relationships which is empowered with software technology. Thus, you must avoid deployment of technology without strategy. Doing so automatically results in focus shifting to short term tactics that fix temporary problems, it doesn’t make any progress in the drive to advance the company on a macro level.

  1. Lack of a will to adapt to change: CRM systems regularly updated themselves with new revisions, features, processes, automation, roles, responsibilities, control, or even a perceived or actual loss of control. Understandably this sows anxiety in many users and results in non-acceptance or even contention by this majority. Use of change management tactics will greatly help ease adoption of new tech.

Some CRM software suites include the option to make change readiness assessments and detailed analyses on the impact of the effect of new technology and business strategies. Material like these help provide assurance that resistance to change will be resolved qualitatively.

Lack of a sound business process design: Businesses need to change business processes on a regularized basis of a few years to best adapt to changes in the industry. Without good improvement in the business process, the business becomes just another place to store data which will predictably result in users being left unimpressed, lead to low software utilization, and automation will witness a negative gradient as your employees begin to work outside the system.

Increased productivity is enabled with technology but it isn’t achieved with it alone. It is known the automation of the business process is the #1 contributing factor to increased employee productivity replacing manual activities, quickens business process cycles and reduces error margins. Following next is optimization, the process of eliminating low value or non-value steps and procedures. This decreases business process cycling times, lower operating costs, and improve outcomes overall.

Lack of executive sponsorship: Inadequate or completely absent executive sponsorship is often a direct cause of CRM failure. The staff work on imperatives from the executives so it is very important for them to deliver precise, clear, and active sponsorship of the project. Governance frameworks greatly aid executives in achieving what they want to achieve. Specific governance methods which bring both visibility and predictability are necessary to get the most benefits for their CRM implementation project.

Clear responsibilities for every role, proper communication channels, performance meetings, and reviews are what should be defined by a decent governance framework. Decent governance empowers leaders and the the rest of the team to view the project in the clearest lens possible and enable themselves to proactively guide the CRM project to a planned set of achievements.

Lack of process improvement: As your company’s goals to gain more customers, increase market share and improve customer retention always grow, your enabling technology should always grow too. Constant refinement and optimization of the business software system must be undertaken either through retraining following new releases or pursuing a CRM maturity model.

These have been the most common ways in which CRM implementation projects fail and have failed. This article is designed to guide the entrepreneur through troubles associated with an impending failure of CRM implementation by making it easier to identify the causes and signs, encouraging action. These failures can be managed and prevented through risk management strategies. Risk management is the process of identifying, calculating, and prioritizing risks to tackle. It also includes the implementation of strategies to manage them, creating plans to prevent or mitigate risks threatening project objectives.

Every CRM project has associated risks and while it is impossible to eliminate all risks and anticipate challenges occurring during a CRM software implementation, risk management is the best way to reduces changes of major problems occurring later. Common risk management tools may include a risk strategy, register, early warning systems, and regular risk analysis reporting. Proper risk management assures investors and executives that they will not be caught off guard and unprepared by any calamity.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2019 Henry Chen


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