The Meta Group reports that a staggering 55% to 75% of all CRM projects fail to meet their objectives. Clearly it’s just the latest in a long line of over-hyped technologies.
Or is it? On the average about 70% of all IT-related projects fail to meet their objectives, so CRM’s failure rate, along with the appalling 70% failure rate for ERP implementation projects and the shockingly high 70% failure rate experienced by those implementing supply chain management (SCM) is about as distressing as a 70% failure rate for baseball batters.
Which is to say this is actually good news. Any manager in baseball would be thrilled to have a team batting average of 300, and if CRM and SCM projects are succeeding as well or better than traditional IT projects it’s remarkable. Why? CRM and SCM aren’t like traditional IT projects. They’re the next stage in an ongoing shift in the role of information technology — from solution to enabler.
When I had hair and COBOL was the only programming language used in business, we automated an existing process, and we were done. The new application was the solution.
Enterprise Resource Planning (ERP) systems, in contrast, ship with built-in business processes. They’re more than software, and as a result require far more coordination between IT and business management — something that caught many early ERP implementers off-guard. Businesses usually implement ERP systems to replace obsolete technology and think of the new processes as added baggage, not added value.
SCM and CRM are fundamentally different. Neither is a category of software.
SCM is a business discipline. Its goal (loosely stated) is to maximize the quality of the raw materials used in creating a company’s products while minimizing handling costs. It requires sophisticated manufacturing and distribution processes, along with the cooperation of your suppliers, their suppliers, and the shipping and distribution companies that move stuff from one to another.
CRM is a core business strategy. It refocuses a company around the management of customer relationships, treating them as assets, where ongoing investment yields ongoing returns. It involves personalized marketing and service, mass customization in manufacturing, and sophisticated employees whose good judgment and attitude, assisted by the company’s systems, help turn every customer experience into not just a pleasant interaction, but part of an ongoing relationship between each customer and the business.
CRM is a core business strategy, driving success through the management of customer relationships which become assets, where ongoing investment yields ongoing returns. It involves personalized marketing and service, mass customization in manufacturing, and employees whose good judgment and attitude, assisted by technology, turn every customer experience into not just a pleasant interaction, but part of an ongoing relationship between each customer and the business.
With both SCM and CRM, information technology is just one of many enablers.
And that’s a fundamental change in our relationship with the enterprise.