Key issues in CRM software failures

I attended a town hall meeting today on IT failures specifically targeting CRM. The key items mentioned about the failures all related to not It and non-software issues. Some of the key items that I took away included:

• Software comes with the vendors version of best practices. This may not be your company's view of best practices. Converting to their best practice could hurt your results.
• For CRM in particular, attempting to get information on what your best salespeople do is a problem. If you ask them what they do, so that you can copy it, then watch them, you will find that they don't practice what they say. This is true of other professions, but it may not have the same impact. Most of what people do is done subconsciously. That's why what they say and what they do is different.
• Many IT projects fail because they try to do too many things for too many people. This increases complexity and increases opportunity for failure.
• Because of the defined complexity, the application becomes difficult to navigate and decreases productivity and sales. It's better to make it simple.
• There is too much emphasis on training vs. education. Training tells you how to do it. Education helps you understand why you should do it and how that will help to improve performance. There was another question related to how much training should be provided vs. making the software intuitive. Would anybody play games if they required you to attend a full day training session?

Those were my key takeaways. You can check for more on Twitter at #ITfail.

A view of a failing software project

I have just read an article about a CRM project that is doomed to failure. The basis for the problem is that, buyers often utilize the customizing features available in many software packages to change the functionality before they understand what the software does and how it works. Utilizing the software out of the box is what the writer recommends.

While this may not be possible for all software buyers, it raises an excellent point. Software is developed to automate a process. If you start to change the functioning of the software without understanding the basic operations of the process, you are doomed to failure.

The answer may not always be, use it out of the box without changes. However, understanding the underlying process is critical. A better approach would be to document your existing business process and compare it to the process provided by the software. This does two things:

• It provides you with a basis for evaluating the software and identifies opportunities for improvement of the existing process and what you can get from the software.
• It will also tell you whether there is a conflict.

Now you know exactly what you need the software to do and whether any enhancements are required. If there are no critical missing requirements, I would agree: Use it out of the box without customizing.

You will get results earlier, and if customizing is required, you will get a bump up when the system has stabilized and your staff are up to speed.

The original article can be found http://bit.ly/47lzRv

The Missing Link to CRM Success

Customer Relationahip Management software has a very poor success rate. Numerous stories have been written about their failure to deliver on anticipated results.

I found a BLOG entry that describes 12 steps to a success CRM Implementation. The list of items is valid for most proojects of any type as well as CRM, but there is one missing element.

The first step says "Calculate the Value". This step is important, but it is not good enough as a statement. Having the value calculated will help you to justify the initiative, but it won't tell you how you will achieve the value. The typical problem is too much of a generalization. This is the source of failure from most software implementations.

Generalizations are made about how benefits will be achieved. Then after implementation, nobody understands why the value was not achieved. In some cases, it's because some activities were cut to reduce the costs of a project. These activities are the ones that provided the most benefits.

In order to prevent this, you must focus on the "HOW". How will the benefits be achieved? This means loking at the details of your operating processes, and showing how the software will be of benefit. Not only will this provide the definition of value, it will also show how the value will be delivered. The HOW will show up, not only in the business case, but in the activities of the project, and every member of the project and the operating team will be able to see it.

Cost problems will not cut the value, because in cutting out activities, you will automatically know what benefits you will be cutting.

To see the full list of other steps, see "

12 Steps to a Successful CRM Implementation".

CRM - 3 roads to disaster

CRM (Customer Relationship Management) seems to get an increasing number of articles about failure. It offers so much opportunity for a business, yet has a high failure rate.

The attached article by Rick Cook in Inside CRM is another in the list. In it Rick identifies 3 areas where businesses have made mistakes with a CRM project:

• Concentrating on technology rather than people.
• Not having everyone on board.
• Not putting the customer first.

I've mentioned these before, but it keeps happenning. The last is the most interesting. When we use the words "Customer Relationship Management", how can we think of anything but putting the customer first. If we want to improve the relationship, the customer must be first.

The second must be important if we are to accept the third. If our people are not on board, the customer will never be first.

If we accept those two, then we should not be concentrating on technology. It is the least important and only becomes important because the job is left to the technology people. Technology is only a small part of the solution. It may be a big one from a non-technician's point of view, but forget that. The people, the change in process, the relationship is what's important.

In order to achieve success, it is the only thing that is important.

CRM, Salesforce.com and other software

I just read an excellent article about the misconceptions of justifying software and getting value.
The article talked about justifying salesforce.com to your CEO.
The author talked about 5 misconceptions about Salesforce.com. These misconceptions are valid for many software products, not just salesforce.com
The five miconceptions (generic to any software)

1. Buy the software and the results will come in a few weeks. While the software can be up and running in a few weeks and in use, whether you get value is another question. How is your business process going to change if you are going to get value? How will the software help? This is often the biggest failing of any software implementation.
2. Use of the software can be mandated. CRM products are a major problem here, but others are as well. You can tell people that they must use it, but two things will happen: Your productivity will go down; Your data will not be very good. The biggest benefit of your new software is the data that you capture about your business. If the quality is bad, your value goes down. The net effect can be that you get less value than before you bought. People must buy into the need and get some benefit from it, or you will not succeed.
3. CRM products suffer from this problem more than others. The misconception is that Salesforce is a glorified contact manager. No software product is that simple. All software automates a business process. It does not just sit there and contain data. The process that it automates may not match your existing business processes. You need to understand what it does for you and how you can use it.
4. Low intial setup costs should sell you. Different software products have different setup requirements. Some have an initial outlay for hardware and software. Others do not. In either case, the cost of the software is only a small part of the cost of installing and using the software to get value. If there is no value delivered, the cost is too high. No matter how high the cost, if the value exceeds the cost, you are ahead. See my article on the cost of buying business software.
5. The best way to install software is the big bang approach. While there are some minimum things that must be done to ensure that you have it right, the big bang approach creates the big opportunity for failure. This applies to large companies (and some have had a BIG bang failure), but it is even more important for small ones. You don't have a bunch of people sitting around to work on this. You have a business to run, and change is a challenge. It affect productivity. See my BLOG entry on Chaos.

To see the article on Salesforce.com click this link.

Salesforce.com seminar

I attended the Salesforce.com seminar ysterday. Salesforce bills itself as usable by large and small businesses alike. Because of its business model and lack of large up front costs, this is true.

What I found interesting though is that the seminar that I attended was defined as an introduction for potential users of the product. They did have an introduction to the functionality, however, most of the focus was for large multi-nationals and how they can integrate Salesforce.com into their business. They focused on Cloud computing. The partners were there promoting the add ons that they provided. The signs identified the companies and their products by name, not by value or functionality.

While it is nice to see that they are trying to make their product easy to set up and use by introductory users and small businesses, their marketing of the product in this forum leaves a lot to be desired. Most small business users will not care about cloud computing or components. They are looking to get value from the software. They don't have time to analyze the productss. They just want to make it happen.

Software companies that want to sell products to small businesses need to change their approach, if they want to provide solutions to small business. They need to get out of the technology and into value.

Justifying IT projects

In many cases, IT projects get initiated with a wish list. There is a legitimate business need behind the project. The business defines that business need, but can't necessarily articulate it to the technical staff and/or suppliers. The business generally know what they are trying to achieve, but because there is no detailed definition, it is simply a wish.

These wishes need to be turned into plans. If you want to get more sales, many software suppliers will tell you to install Customer Relationship Management software (CRM). While CRM can help to improve sales, it is not a magic bullet. Just because you want it, doesn't make it happen. So far it's just a wish.

How do you change that wish into a reality? Sticking with CRM, the way it helps to increase sales, is that it helps you to improve your relationship with your customers. It provides the capability to track every interaction with your customer, no matter who talks to them, using whatever vehicle: phone, email, letter, even web. The software doesn't do it by itself, it provides the tools to do it.

Implementing CRM may totally change the roles and responsibility of your sales and support staff, as well as change the way your software works. If you justify the project based on the software aspects, you will get many of the costs, but few of the benefits.

In order to create a plan, you have to start with understanding how you will increase sales. If your intent is not to increase sales with existing customers, then CRM will be of no value.

If you do intend to increase sales to existing customers, then CRM software may be a solution. What benefits can be gained? Do you see a 10%, 20% gain? What else will have to change in terms of roles and responsibilities, other software, etc., for you to make that gain.

Most technology staff and suppliers will help you to install the software, but few will address the issues of how the business will have to change and what you will have to do to measure whether it is working. You may also end up implementing a lot more than you have to, to achieve your goals. Most software products have far more features than most companies need.

Even if you successfully implement the software and successfully gain the benefits that you expect, you may end up installing far more than you need and paying a much higher cost.

The biggest issue is justification of the expenditure. Start with the business goal. Then lay out a plan that shows how you will achieve it. This will define the benefit you will receive AND what components or activities are necessary to achieve it and what will provide the biggest benefit Then figure out the cost, and see how the costs map to the benefits. Drop anything that doesn't have a high benefit to cost.

This will get you out of the issue of dealing with all of the extraneous technical issues, the options that provide no value.

Why CRM fails

Customer Reltionship Management projects have a high failure rate. There are many reasons for failure and most of them have nothing to do with software. A recent article on InsiderCRM describes the issues.

The key to any software project is to recognize that there are three components to success, People, process and technology, and any project that focuses solely on the technology is doomed to failure.

To start with, you must recognize that salespeople are often independent operators within a business. If they don't see the value, they won't do what you need. Other parts of the business are often easier to work with, because their activities are integrated with the use of the software. Salespeople seldom can function without the software.

Secondly, you must recognize that the software is useless without a sales management process. The software provides you with a framework to deliver and improve that process, but it is not necessarily obvious.

The last is the software and other technical components. As some of these activities are complex and often take a lot of time, they often become the focus of the project. This is where everything gets off the rails. Yes, you must plan and implement the software, but this component is the least important.

The article that I have referenced describes this in more detail, but there are two items that stand out:

• Face the truth. What are the obstacles and challenges to making this work? They are unlikely to be the software or technology.
• What's in it for us? How will your business be improved by implementing CRM? Be very specific in terms of business outcomes. A wish will not achieve it.

CRM for your business or your sales force?

Customer Relationship Management (CRM) is a big issue for any successful business. The better you manage your relationship with your customers, the more successful you will be at keeping them as your customers. This is why many software companies are in the business of selling software to help you do this.

IF CRM is so important, why is there such a high failure rate in CRM projects. I speak to many people who attempt to implement CRM, and most have the wrong approach. They look to the software as the solution and ignore the people.

In a recent discussion with a sales person, I found a very frustrated individual. The company had decided to implement CRM. He hated it! It created more work and didn't help him do his job. That doesn't sound like it will be a successful project.

To address this problem, you have to understand what CRM is all about. The purpose of CRM is to collect data, so that you can understand your customer better. If you collect bad data, you will have bad information about your customer. If you have bad information, you have no chance of satisfying your customer. If your sales people are frustrated with the CRM software and don't see the value, they will not collect valuable information. There is an old saying that I learned in my early days working with computers: Garbage In, Garbage OUT (GIGO). It applies to the CRM project.

There are two things that you need to do:
1) Define a very clear goal. Show how what you are doing will help you achieve your goal.
2) Ensure that what you are doing with the software will make it easy to capture the information to help reach the goal. The more difficult it is to capture, the less chance you have of reaching your goal.

This means that your sales people and your sales support people need to clearly understand and support the activities. If you don't, you will fail.

You may be able to get your support people to "follow the rules". You will have more difficulty with your sales people. They rend to be independent and are measured differently. Do your assessments of performance measure them on the "new Rules".

More on CRM software installations

Another article on CRM (Customer Relationship Management software) talks about problems with SaaS (Software as a Service). This term can be found all over the IT press and is being hyped as the solution to all your technology problems. SaaS is simply a service where your supplier hosts the software that manages some aspect of your business (This BLOG is an example. I don't install or maintain the software. It's provided to me and I use it).

The primary point of the article is that SaaS doesn't eliminate the need to plan for implementing new software for CRM (or any other business function). The installation, management and support of software is only one small aspect of any software that will run your business functions. The time and effort needs to be put on your business processes and how implementation of the software will improve your ability to deliver the business outcomes that you are looking for.

The key elements of getting results that you want are:
1) Have a business goal.
2) Walk through your business process and identify how technology can improve your ability to deliver.
3) Don't forget the people. Everybody listens to their own version of WII-FM (What's in it for me). If your people don't see the benefits, they will fight it.

The cost of software is only one small part of the project. Lost productivity (as your people learn), conversion, training, consulting support are others. In an article on my website, I outline the costs of buying software.

Click here if you want to see the original article on SaaS and CRM.

Problems with CRM software installations

Customer Relationship Management (CRM) software projects have been problematic. I found an article that mentions some of the reasons why. The list of problem areas is valid, but it doesn't go deep enough.

Here are the six problem areas identified:
1. Lack of strategic goals
2. Accurate and up-to-date data
3. Start slow. Have a staged approach.
4. Ensure the CRM system is actually used.
5. Hosted or on-premise solutions
6. Too much customization can be a problem.

Items 2-4 address major issues and are related. So is #6. In order to ensure that you have accurate and up-to-date data, people have to use the software and use it consistently. The causes of lack of use are primarily:

• Too much data being collected and too much customization

When CRM projects are initiated, there is usually a basic goal: to get more business. When requirements are defined, the potential for increased information is recognized, but not the problems in getting it.

Firstly, people need to change how they do business. They have to collect new data (some may be easily available) and they have to enter it in the system. When and how do they do this? For telephone sales and support, it is usually easy, since the salesperson is sitting in front of a PC with other data about the customer. The situation isn't the same for the salesperson on the road. They have to enter this data when they get back to the office or at home. This cuts into their personal time.

Secondly, the more data that you collect, the more you have to analyze. Since there will likely be a focus on certain goals and therefore certain data, much of the data will be ignored. People will know it is being ignored and will stop collecting. Then you lose out on item #2, accurate and up-to-date data. That causes your project to fail.

Thirdly, when you start the project you have certain ideas in mind. These can be articulated, but you will find that as you collect data, your understanding of your business will change and you will want to change what you collect. With the items that are less well defined, it will be even worse. It is likely that you will find the data has no value, at least in its initial form.

The final reason of too much customization falls into this category. Most software products give you the opportunity to customize to meet your specific needs. If you have a very specific need and know exactly what you are going to get from it, do it. If you don't, leave it for later. Remember that many people have had input into the development of the CRM software. With little or no experience and no specific goal except to collect information, you may find that it is not required. Something else may fill the bill.

Out of the six points mentioned above, two are critical:

1. Have a goal.
2. Ensure that the data you collect is accurate and upto-date and helps you achieve that goal.

If you do that, you are likely to succeed.

Here is the article that I referenced.

The search for perfection in software projects

When installing software to run your business, there is good news and bad news. The good news is that most software today is very flexible and offers a lot of options. The bad news is that the software is flexible and offers a lot of options.

These options offer the opportunity to collect a lot of data that may be useful for your business. This data can be the source of failure of your project.

In speaking to a colleague today, I was reminded of all of the projects that I have been associated with and many others that I have encountered after they failed to achieve their objectives. In many of these, the planning process is the source of the problem. Each project is considered to be a major event. Since it is such a major event, the planners want to "get it right", and they assume that they won't get a chance to do it again. So they attempt to collect all of the data that they can, and anything that might be useful in the future. Anyone associated with making software work is familiar with the term GIGO (Garbage In, Garbage Out). If the quality of the data is poor, then the system just won't do what you want it to do. This results in failure of the project, or failure to achieve the return on investment.

The problem with any data collection system (that's what the software is), is that when you collect new data, you are changing the way people do their jobs. The more that you change it, the more difficult that it is to do the job. People may not be receptive to that change. When the job is made more difficult by requiring that new data be collected, people become more reluctant to do the extra work, until they see value from that effort.

The more data that you try to collect, the longer the planning process takes, the more effort it takes to get the job done, the longer it takes to implement and the longer it will take to get a return on investment. This stretches people's patience and reduces their interest in doing the extra effort.

Many projects, such as CRM (Customer Relationship Management) suffer from this disease. The planners see all sorts of opportunity in collecting data about customers, the interaction with customers. They attempt to get salespeople to collect this information. The salespeople see no return on investment of their time, and they don't collect quality data. The result is a failure of the project on at least some level.

The solution is to narrow your focus. Define the business outcomes that you want, identify the data that is required to deliver those outcomes and implement those features as quickly as possible. Measure whether those outcomes are being achieved and show your salespeople the results. Remember that they will be looking at it from the WIIFM perspective (What's in it for me).

Once you have achieved your desired outcomes, look for the next step and the next desired outcome. Many project planners look at a project from a one time perspective, rather than an iterative perspective. They want to capture all of the data the first time, and that dooms their project to failure.