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Expert: End-user companies responsible for CRM failure

It's certainly not a popular position to advocate, but noted customer relationship expert Peter Senge blames businesses for their own CRM failures. Speaking at Gartner's CRM summit, he recommended radical change to ensure success.

CHICAGO -- Software vendors, management consultants and industry analysts have very little to do with the failure of CRM efforts, according to Peter Senge. The blame, the noted customer relationship expert said, lies with business customers themselves.

Speaking to the crowd gathered here for Stamford, Conn.-based IT researcher Gartner's CRM Summit Fall, Senge, a senior lecturer at the Massachusetts Institute of Technology in Cambridge, Mass., observed that organizations trying to implement CRM are more responsible for their CRM shortcomings than anyone else.

"It's the organizations who jumped on the concept of CRM, drove it to its fad era and are now asking if CRM is dead," Senge said. "These organizations used the term CRM so frequently that it lost its meaning. But real relationship management is more important than ever."

Gartner, as well as other analysts, have said that as many as 70% of all CRM projects fail.

In addition to having lectured on organizational dynamics at M.I.T., Senge worked closely with the Society for Organizational Learning, a defunct academic group focused on the evolution of relationships. To illustrate his point on culpability in failed CRM, he referred to the movement for total quality management (TQM) that swept through the automotive industry during the 1950s. Senge said it is widely recognized that quality management is what has allowed Toyota Motor Corp. to become the largest auto company in the world in terms of market value.

"Ford and GM tried very hard to push TQM, but they never approached what Toyota was able to achieve," Senge said. "The losers in TQM weren't trying to learn about quality; they were only focused on the bottom line. Only a handful of companies are ever able to truly drive real philosophical change in human activity."

The same sort of struggle has doomed many CRM efforts, according to Senge. He theorized that the introduction of electronic mediums of communication such as e-mail have only made it harder for organizations to get on the same page to effect real change. Senge said that for companies to connect with their customers and deliver value through CRM, they must build a better idea of what clients are looking for, not what will create a more profitable business.

"Technology problems are easy to solve; changing human behavior is much harder," he said.

Senge based his presentation on the idea that human interaction is based on a set of assumptions and that for businesses to achieve better CRM, they must re-examine conclusions they often make about themselves and their customers.

Attendees found it hard to disagree with Senge's academic approach to change, but intimated it may be hard to implement in the real world.

"Organizational change can be achieved, but different perspectives and politics make it hard to do on more than a local level," said Joseph Twarek, a software program manager for the U.S. Air Force. "We're trying to do this by asking our 'customers' what it is they really expect from us in terms of applications."

Larry Tagli, vice president of information technology for Hoffman Estates, Ill.-based commercial lender Transamerica Distribution Finance, said the fundamentally shifting relationship applies to the basic precepts of good business.

"The struggle is how to capitalize on this metric, as business is composed almost completely of relationships, and there's no clear way to easily effect this kind of widespread change," Tagli said. "Companies are usually run by salespeople, not accountants. Yet the challenge might be to recreate the relationship aspect of sales where trust and interaction are hallmarks."

Robin Way, field strategy and support representative for analytical software specialist SAS Institute Inc., Cary, N.C., said he feels applications providers also need to consider the expert's advice.

"It makes you think carefully about the kind of tools client organizations need to use to be successful [with CRM]," he said. "It's not enough for us to sell them licenses to some technology; these applications need to be infused with their own knowledge of customer issues."


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