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CRM Failure: Old Wives' Tale or Success Story?

By Julio Quintana
July 18, 2007
One of my kids came into the house recently, stern faced, asking me if it was true that rubbing a penny on a wart would get rid of it. 'Wow,' I thought. 'Sounds like an old wives' tale my mother use to tell me.' Old wives' tales are like that; they tend to hang around, long after anyone can remember where and why they started.

A statement has been circulating around stating that a majority (estimated over 74%) of CRM projects fail. I, personally, have been hearing it for the last 10 years, without knowing much about where it came from. It turns out that this well-publicized statistic came from a 1994 Standish Group study which has served as the foundation for much decision-making about client relationship management issues in and outside of the legal community. The Standish Group, a leader in project and value performance, risk assessment and cost return and value for Information Technology (IT) Investments, indicated that project success rates increased in 2004, to 34% of all projects.

The latest study (known as the CHAOS Chronicles), conducted in 2006, comprises 12 years of research, including focus groups, in-depth surveys and executive interviews, on project performance of over 50,000 completed IT projects that include CRM initiatives. 2006 numbers show that closer to 50% of projects fail. Standish Chairman Jim Johnson attributes the change primarily to the scope of projects getting smaller: 'Doing projects with iterative processing as opposed to the waterfall method, which called for all project requirements to be defined up front,' was a major step forward.

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