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Bucking the hype, Forrester reports higher CRM satisfaction

In the face of a lot of CRM doom and gloom, enter Forrester Research. It says that widely reported CRM failure rates are exaggerated.

Analysts at Forrester Research Inc. released new data that indicates three-quarters of companies using CRM software are satisfied with their existing deployments. The findings are almost completely at odds with previous satisfaction measurements that depict massive customer disenchantment.

Forrester's figures are based on a survey of 111 North American companies with at least $500 million in annual revenue.

While other analyst firms have previously reported that as many as 80% of all CRM shops consider their implementations to be failing, Cambridge, Mass.-based Forrester is signaling that the industry may be experiencing a turnaround. According to Bruce Temkin, principal analyst at Forrester, failure rates have been over-inflated and customers are starting to see more benefits from their existing CRM applications.

"Much like the Internet boom and bust that the CRM wave mirrored, fallout was not as dire as some might believe," Temkin said.

He added that there is a growing maturity in the CRM industry among users and software vendors, credited mostly to the realization that CRM's success revolves more around refining business processes and not just implementing technology. Although vendors have improved best-practices templates to help guide user implementations, Temkin said, vendors largely remain more focused on selling systems than enabling success.

One major trend that has aided the success of CRM is a de-emphasis of large-scale software customization. Cutting down on customization allows users to lower project overhead and lends clarity to efforts to change business processes, Temkin said.

"In years past, people were customizing more, creating so many variables there was no clear picture of the CRM project's end," he said. "Now, companies are eliminating those variables by following best practices embedded in the applications."

Temkin offers three strategy models for companies unsure how to approach business process change and CRM implementation:

  • Utilize existing business processes and find software that can automate them.
  • Buy an application and follow onboard best-practice recommendations.
  • Design future process goals and adopt applications that support them with customization.

According to Temkin, every CRM project should feature a mix of all three methodologies.

Despite his overall sunny outlook, Temkin is quick to point out that the quarter of all CRM shops that remain disappointed represents an unacceptable level of industry-wide failure. Temkin said the majority of the failures he's seen revolve around application usability issues.

"The phase that people who are dissatisfied most often have a problem with is defining strategy," he said. "And these issues most often start early on in the project."

Temkin said CRM satisfaction rates will rise during the coming year. Increasingly savvy users, cheaper CRM software and more competitive pricing from systems integrators will spur improvement, he said.

Temkin also predicts that the CRM industry will grow, with online self-service and customer analytics on the upswing and demand for sales force automation declining.


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