Poor Business Decisions Equal No Measurable CRM ROI

A new study by market researcher Gartner claims that through 2005, 75 percent of CRM projects that do not deliver measurable return on investment will have failed due to poor business executive decision making. The report, "Building Business Benefits From CRM: How to Design the Strategy, Processes and Architecture to Succeed," focuses on recommendations on the strategy, planning, implementation, and supporting technologies and services required to plan and launch a successful CRM initiative and build profitable customer relationships. The 354-page document is a compilation of research from 21 of Gartner's CRM analysts. The research has not been previously published, but some of it had been presented at Gartner's CRM conference earlier this year. Using case studies of companies that have experienced CRM success, the report's includes guidance on the critical components of successful CRM initiatives; ways to gain insight through customer data management and CRM analytics; strategies and tools for building customer loyalty and satisfaction; a review of key CRM vendors and products; CRM project-management best practices; considerations for using external service providers; and industry-specific views on CRM strategies. Joe Galvin, vice president and research director at Gartner, says that in addition to delivering measurable results and value, technology implementations must be aligned with strategic goals. "Alignment among enterprise strategies, business processes and applications of technology is often missing in CRM initiatives," he says. "To improve the chances of project success, focus on ensuring that technology implementations are tied to specific business benefits and the delivery of measurable ROI." The report emphasizes that companies either engaged in or planning CRM initiatives must understand the critical components of successful CRM strategy development and implementation. According to the study, approximately half of all CRM projects fail to meet the expectations of executive management. Galvin notes that it is easier to pinpoint failure than to ensure success. "Failure is in the eyes of the beholder," Galvin says. "But one thing we know is that failure happens when companies don't have the proper alignment of executive leadership and technology. Technology is not a strategy. There has to be leadership behind it."