According to in-depth interviews with 89 senior managers across industries, 68% say that CRM initiatives are unsuccessful. The interviews took place from October 1, 2002 to February 22, 2003 and were conducted by Brulant, a consultancy providing web solutions to financial institutions.

"Roughly half of the 68% are either full failures, or cancellations initiated to avert disaster," according to Len Pagon, President and CEO of Brulant. "The other half either blows up the budget, or don't fully meet requirements on time."

Pagon noted that when CRM initiatives fail, it is often due to problems with strategy and planning. "When people buy a CRM solution, either off the shelf or through a consultancy, their goal is usually to keep customers and improve profitability. But, serving customers better does not always improve the bottom line. Companies need to tie customer information closely to profitability. If companies keep giving great service to customers that are not profitable, they will actually hurt, not help the bottom line. CRM can improve margins if it is focused on profitable customers," he said.

Pagon said that critical analysis during the post-implementation period is crucial to CRM success. "Once the technology is in place, you immediately need to closely examine how it is affecting the bottom line. Critical factors that contribute to success include strong expectations, best practices and big bang. Many managers overseeing CRM implementation think the job's done once the technology is in place, but that is actually just the beginning," concluded Pagon.