Despite lots of money (typically US$5,000 a seat and $2 million to $5 million per deployment), many companies haven't seen a return on their CRM installations. Gartner estimates that 50 percent of the installed CRM systems don't fulfill their promises.
There are several reasons for and as many solutions to the CRM tangle.
Denis Pombriant, research director for CRM at Aberdeen Group Inc., says that, to get an integrated view of the customer, early CRM systems required data conversion when consolidating data from multiple legacy systems. For example, organizations might have sales and customer data in separate systems, each of which a sales rep would have to log in to for a complete view of the customer.
At the enterprise level, CRM software is just plain difficult. A company that has a DB2 database of payment history on an IBM mainframe communicates with point-of-sale and processing locations such as loan offices via MQSeries. If you've opted for a heavyweight CRM suite from Siebel Systems Inc., you'll also invest in an MQSeries module for $100,000 to $1 million. And you'll hard-wire and hard-code the two systems together to connect the Siebel suite to the mainframe and the MQSeries locations.
And with multiple databases, FTPing information back and forth from a Sun Microsystems Inc. box to an NT machine will mean time and money running data reconciliations. There's custom coding to pay for, too.
But this isn't the worst problem.
The mother of all headaches is that the sales folks don't use the CRM system. They complain that it's complicated, doesn't personalize their data or doesn't work on the road.
There is hope, but it means rethinking CRM.
ASP models for Web-based CRM systems, such as sales force automation, let you rent software for as little as $65 per month per user. Salesforce.com (with 3,400 customers), UpShot and Salesnet offer software as a service. The benefits are quick ROI, no software to buy and no installation.
Another approach from Siebel and ERP vendors such as SAP AG, Oracle Corp., and PeopleSoft Inc. is to deliver CRM via ASPs.
There's also modular design employing JavaBeans (rather than C, C++ or Visual Basic code) with integration into legacy environments. This approach lets vendors leave legacy data where it is. A CRM module can focus on specific workflow processing and business rules. Dorado Corp. is doing this in the financial services industry.
CRM has disappointed, but there is a way out of the mess.