The story below is inspired by a true business case. I used it as introduction to the topic of CRM implementation in the latest issue (April 2010) of Mreza magazine (www.bug.hr/mreza). Herein translated to English.

At the end of winter 2003, Mr. S, member of the board of a large telecom operator, walked nervously from end to end of his office on the top of a glossy office building. In front of him there where two little men sitting on a leather sofa. One of them, an external consultant, was staring at the floor. The second one, the project manager from the company, was speaking with trembling voice, trying to explain the circumstances that led to the collapse of one of the largest CRM implementations in the world that year. The situation was more difficult because the bad news came too late. Mr. S has reserved, only a week ago, part of a fancy Austrian ski resort to celebrate success with project teams of a “big bang” implementation of almost all modules of the world’s leading CRM application.

Mr. S believed that the implementation of CRM applications will link his company by steady, predefined, user-oriented processes that will remove communication barriers with customers, reduce human mistakes and, ultimately, fend off new operators who where sharpening their balance sheets for the market battle against what they considered a slow telecommunication giant.

This drama has not occurred somewhere above Manhattan Avenues, but in a small Eastern European country.

How and why did tens of millions of Euros invested in the CRM project of Mr. S leak away like sand, into the pockets of consultants and software vendors? This question is asked by hundreds of companies that have decided to implement CRM and take a step forward to customer-oriented business.

The answer is individual for each of them. However, the legendary failures of CRM projects, such as that of Mr. S, or many others which have ended with much less glamour and lost resources, can be explained by few main reasons, summarized in an unique and fundamental mistake of introducing CRM. It stems from the complexity of any CRM initiative. It appears as its starting point, or simply impose itself through perception where “one doesn’t see the forest from the trees”, meaning that problems around complex IT solution make forget why the initiative had been launched at all, and which where the original indicators of its success.

Detailed elaboration of CRM processes, documented in a book of nearly 600 pages served as basis to the mastodon project of Mr. S. Despite millions of Euros invested in the project and its preparation, it was doomed to failure from its first day.

In summary, there where two main reasons. The first was the aforementioned implementation of CRM applications and overestimation of its power, with neglecting the fact that the business is run by people rather than processes drawn by a group of experienced consultants. But the project did not even survive enough to come into the hands of internal users to get the chance to crumble during the day to day operations. It failed already on the basic understanding of the role of IT within customer-centered processes and the respect for the compromise between the cost of the implementation and its return.

Unpretentiousness is the name of the game in the company of successful CRM implementations. Some processes, among hundreds designed to be embedded in the CRM application, were simply too pretentious. They demanded so many adjustments and use of artificial intelligence that those couldn’t succeed. Especially when you take into consideration that computer decision making involves the appropriate information, the same one that is achieved only after years of using CRM systems.