Over the years, most of the reports on CRM and ERP implementations endorsed the existence of gaps between customer expectations and actual results. The studies also pointed out that time and cost performance still remain an undeniable point for improvement.
You need to be careful while interpreting these statistics. Most studies do not measure exactly the same things, they have different types of respondents, and the methodological approach may vary as well.
In the early nineties, Standish's Chaos Report shocked the industry, when it reported a 16 percent success factor on software development projects. The same report called 53 percent of the projects to be challenged on implementation, and 31 percent to have failed. Although considered to be controversial, this report managed to attract worldwide attention for solution delivery issues.
About sixteen years later, we still have Chaos Reports, now accompanied by many others. The 2009 statistics of the Chaos Report showed 32 percent success, 24 percent failure, and 44 percent projects to be challenged. Investigations of other research companies show slightly better statistics; however, they all conclude that there is still opportunity for improvement as most of our ERP and CRM projects take longer and cost more than expected.
While these facts and figures may shed a poor light, these statistics are not intended to discourage a relatively young industry sector or to put off executives from undertaking ERP and CRM projects. Instead, these should be viewed as lessons learned from failed and challenged projects, which the stakeholders involved in the solution implementations can use as input for continuous improvement efforts.
It also seems easy to transfer the responsibility for all failed implementations to the service provider. But as we have noted in the previous sections, a solution is made up of many components, including the product (software vendor), the service provider, and the user of the solution (the customer). While it might be easy to blame the implementer for all failures, it is not entirely justifiable. For instance, recent reports also offer insight into how customers impede their own projects.
Microsoft's own research into customer escalations of Microsoft Dynamics engagements has shown that almost half of the escalations were due to implementation issues. Further research indicated factors such as lack of formal processes within the teams, communication issues, and scope management, corroborating the need for a good methodology for solution delivery.
Many factors decide whether or not a customer perceives a project as successful. Time and cost are two of the most important criteria, but there is another parameter that is important but ignored sometimes—business value. Recent studies allege that ERP/CRM implementations under-deliver business value, and the organizational changes of the solution are reported as ineffectively managed. This again underscores the need for a good delivery process, one that begins with the organization clearly determining success factors for a project before undertaking it. For instance, Microsoft Services requires an understanding of the Conditions of Satisfaction (COS) to be noted within the Project Charter or similar project documentation, and signed off by the customer at the outset of the engagement. COS can be excellent measures of project success, but the key to measuring this is to clearly establish:
Baseline metrics—the values that exist before the project is initiated
Projected metrics—the goals for the engagement
When these metrics are measured after the engagement, the teams can clearly determine success or failure of the project.
Nucleus Research released a guidebook, titled Maximizing success delivering Microsoft Dynamics, in October 2009. According to the guidebook:
When deployed properly, Microsoft Dynamics ERP and CRM solutions can deliver significant returns to customers — however, that is often dependent on selecting a partner that can deliver the project on time and on budget with minimal changes from the initial project scope and planning.
Nucleus also noted that:
While a structured implementation methodology delivers the greatest success for Microsoft partners, partners also needed to be flexible enough to meet the specific needs of customers and to evolve over time as business dynamics changed…Structured methodologies like Sure Step can help partners balance their approach to diagnosing, implementing, and optimizing solutions for customers. The skills and guidance of implementation partners are a key factor in Microsoft Dynamics's customer success, and those that are most successful have moved beyond ad-hoc diagnostic, communication, and project management to follow a more structured implementation approach such as Sure Step. They reap the benefits through improved communication, greater customer satisfaction, and ultimately through greater profitability and growth.