Study shows businesses getting the hang of CRMSept. 19, 2002
In contrast to frequent reports of escalating Customer Relationship Management (CRM) failure rates and ever increasing price tags, a new Baylor University study indicates that companies are finally getting better at estimating the organizational cost necessary to successfully deliver CRM. The study, conducted by Dr. Marjorie Cooper of the marketing department at Baylor University's School of Business, surveyed experts either currently on or recently involved in CRM implementations, with surprising results.
"Concerning CRM project budgets, 56 percent of the 99 clients, consultants and vendors polled, reported implementations being completed within originally established budgets, a vast improvement over the dreadful budgetary numbers of the past," says Dr. Cooper. "While the 31 percent reporting budgetary overages leaves much room for improvement, things appear to be moving in the right direction."
As one provider of CRM consulting services noted, "Most projects have had ample support, funding, planning and appear to be on target to meet or exceed goals."
Dr. Cooper asserts that the improving budgetary numbers and industry sentiment indicates that companies are getting better at understanding the true costs associated with CRM implementation.
"While many participants did run into obstacles resulting in functionality and/or budgetary changes, the high success rate indicates that companies are getting smarter at focusing on critical functionality while curtailing issues such as scope creep," explains Dr. Cooper. "This improvement is due, in part, to the realization that organizational support around a clear CRM strategy is critical to CRM success." More than half of the study's respondents indicated lack of support to be the primary obstacle to a successful CRM implementation, illustrating how companies are beginning to approach CRM more systematically and comprehensively.
Perhaps even more encouraging are the numbers concerning Return on Investment (ROI). Expectations remained high with 86 percent of the participants anticipating a positive ROI. It appears that expectations are finally falling in line with reality, as 85 percent of the participants reported projects actually delivering expected ROI numbers, such as increased revenues and lower costs. "By taking a practical approach, the initiative grows in line with the return on investment," explained one participant. Therefore, it appears that not only are customers getting better at CRM, they are beginning to reap the rewards through positive ROI.
"The results of the survey, at the least, are encouraging" says Dr. Cooper. "These higher expectations of positive ROI and on-time completion seem to indicate that companies are acquiring a better understanding of CRM and its associated tools."
The future looks promising as CRM moves past its infancy and begins to return the benefits projected for so long.
For more information, Dr. Cooper can be reached at (254) 710-4951 or by email [email protected].
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