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CRM Technology Decisions: Company politics can kill CRM

If you think Democrats and Republicans are bad, just watch company politics ruin a CRM project. At CRM Technology Decisions, analyst Scott Nelson blamed internal strife for the majority of CRM failures.

ATLANTA -- Forget about the technology and the vendors; according to a Gartner Inc. analyst, botched CRM is usually a victim of politics.

Speaking at TechTarget's inaugural CRM Technology Decisions conference, Scott Nelson painted a picture of a business practice wrought with more politics than a heated campaign on the eve of Election Day. Dooming CRM are internal tugs of war over customer ownership, disenfranchised executives, and customer contact channels that don't communicate with one another, Nelson said.


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And he blamed companies for not learning from the mistakes of early adopters.

Nelson, once labeled "the man who killed CRM" after publishing the original research disclosing the industry's high implementation failures rates, said that about half of all projects still don't produce the desired returns.

While he cautioned that "CRM should not look the same in every organization or even within organizations in the same industry," Nelson did offer a set of best practices.

Successful CRM starts from the top, he said. Most executives pay lip service to CRM and don't put enough money -- or energy -- behind their words.

Nelson cited Jeff Bezos,'s CEO, and Charles Schwab, chief executive at the investment firm bearing his name, for championing CRM and getting results. In Schwab's case, Nelson said, the technology at work isn't especially noteworthy, but the executive effort is.

Nelson's CRM predictions
Gartner Inc. analyst Scott Nelson also offered some prognostications at CRM Technology Decisions. Here are a few of his forecasts for the CRM market:

  • Vertical market CRM offerings will get "white hot."
  • Process automation is "the next frontier."
  • Expect more CRM application development tools, or "homegrown" tools.
  • The industry will shed its reputation for failure.
  • More vendors will consolidate, but big ERP providers and Siebel will survive.

Scott Pochron, senior director of effectiveness improvement at EyeMed in Cincinnati, realizes the value of executive buy-in. Five years after deployment, his company is looking to replace its existing sales force automation software because the project is "not perceived as a success."

Pochron knows that achieving returns starts with getting management to sign off on a plan. "There's a heartfelt desire on the part of executives to service the customer," he said, "but it's siloed around functional needs."

Nelson stressed that successful CRM begins with vision and ends with technology. In fact, in his eight-step guide to implementation, he placed vendor selection seventh -- followed only by outlining measurable metrics for returns. Strategy, reassessment of business processes, and data management all preceded the actual technology.

That caused Jamie Castaneda to rethink his game plan. The automation manager for TACA International Airlines in El Salvador was at the conference to decide on a CRM vendor. Now he and a colleague have decided that they first need to gain a better definition of their diverse customer base, which includes travel agents, airline partners and passengers.

Vendor selection will be one of the "final steps," Castaneda said after Nelson's session.

Another common mistake is assuming that existing data is good. Nelson said that one quarter of an organization's customer information goes bad each year. The first person to notice the inaccuracies, he said, is usually the customer.

He cautioned those with multiple customer contact channels not to suffer from "marketing Alzheimer's," in which the customer has to reintroduce himself with each interaction because different systems don't interact. Effective CRM also must cut across different departments and product offerings, Nelson said.

That's the challenge facing Sidnah Doby, a project manager at AT&T in Blue Ridge, Ga. As she researches a possible rollout of Siebel SFA and contact center applications, she's hoping that her company's wide range of products won't cause the "silo effect," in which each division has a different view of the customer.

There is, however, hope that CRM's tarnished image will rebound. Nelson estimates that only 40% of all companies have undertaken a CRM project, meaning there are plenty of success stories that could eventually counteract all the talk of failure.

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