Since the late 1990s Customer Relationship Management (CRM) has been one of the fastest growing businesses and energetically debated topics among practitioners and academicians. Companies have invested or are planning to invest huge amounts to implement CRM strategies, tools and infrastructure in order to win the battle in the increasingly competitive economy.1 As a result, the growth in demand for CRM solutions has been increasing. Gartner estimated that the market for CRM software exceeded $7.4 billion (£3.6 billion) in 2007, up 14 per cent from 2006.2 Forrester estimated moderate growth in the CRM industry through 2010. Forrester suggested that worldwide revenues for CRM solution providers reached $8.4 billion (£4.08 billion) in 2006 and would continue to grow to $10.9 billion by 2010. Forrester anticipated that overall CRM spending will remain steady, with services taking an increasing share of vendors' revenue.3
Despite the enormous growth in the acquisition of CRM systems in the last ten years and widely accepted conceptual underpinnings of a CRM strategy, critics point to the high failure rate of CRM implementations as evidenced by commercial market research studies.4 In an international survey of 1,337 companies who have implemented CRM systems to support their sales force, CSO Insights has estimated that only 25 per cent reported significant improvements in performance.5 According to a Gartner survey, about 70 per cent of CRM projects resulted in either losses or not bottom-line improvement in organisation performance.6
Manufacturing, logistics, store/branch operations and the public sector have all produced great examples — of both success and failure. For years, change programmes involving a big change to systems, or even totally new systems, involved additional risk. It is no surprise — the more the change the greater the risk. CRM systems success and failure have attracted a lot of publicity in recent years, but in the last quarter century, there have been many other management areas where the issue of systems success and failure has attracted the same interest. The reasons for success and failure turn out to be pretty closely related. Successful systems-supported change projects observe change management disciplines, unsuccessful ones do not. Successful projects are planned carefully, with all aspects covered, all the right people involved, and the company and any external suppliers (consultancies, systems companies, business partners) work well as a team. The opposite applies to failed projects. In the middle lie the many partly successful projects that achieve some but not all of their objectives, probably at a higher cost than initially planned.
One of the central themes of most studies of success or failure in systems development and implementation is whether the project slipped badly, so that it was completed well after the original deadlines. In our experience, however, CRM systems seemed to be different, in that they usually support a large change in how a company works with its customers, a change that involves learning by the company's staff, its system suppliers, the consultants (if any — and internal or external) helping plan and manage the projects, the company's business partners (eg marketing communications agencies, call centre capacity suppliers, fulfilment houses) and not least, its customers — as the company tries to create a new way of working with them, and sometimes even a relationship. These CRM systems often had several stages of development, with one or two years of pure development, followed by several years of implementation and iterative improvement. Our interests, therefore, lie in exploring factors that contribute to successful CRM implementation as experienced by users in the private sector.