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Exclusive Research Study on Membership CRM projects – Why do they succeed or fail?

For many NGOs, Customer Relationship Management (CRM) is the foundation of their strategy to engage, serve and retain supporters and stakeholders.

But while there’s plenty of CRM success out there, there’s also a graveyard of failed CRM projects. Why are these projects failing? And what does achieving success actually involve?

Research on NGOs

Earlier this year, Hart Square conducted a survey of individuals working in different roles – from IT to marketing – at 170 not-for-profit organisations who are, or have been, involved in CRM projects.

When asked about the relative success or failure of their projects, respondents were pretty much split evenly, with 50% defining their projects as “very successful” (10%) or “successful” (40%). However, the next highest percentage – just under 40% – said they had “limited success” and that the implementation had “failed to meet expectations”. Over 11% said their implementations were “unsuccessful”.

In some cases, while projects were cited as “successful”, the CRM system purchased was not as well-tailored as it could have been, so success was limited. A project can be ultimately successful, but involves many compromises. For many respondents, CRM was very much “work in progress” and they found it too early to claim a successful outcome. The process, it seems, is often iterative.

The Inertia factor

When asked about the length of time a CRM system had been in use, the survey revealed a certain level of inertia among organisations. A high percentage of respondents (over 37%) have had their CRM system in place for 5-10 years, and of the just over 15% who said they have had CRM for more than 10 years, most said that between 11 and 25 years had elapsed since their CRM implementation.

When asked about the time taken to implement a CRM project, just under 75% of organisations took between one and two years to implement. Over 21% took up to four years to complete a project, while just over 4% took between five and eight years.

There are many determining factors that can affect how long a CRM implementation takes, including:
•    whether a full business requirements audit has been undertaken
•    if suitable budgets are in place
•    if staff and other stakeholders are engaged
•    whether Board approval is forthcoming.

Having a grip on all aspects of a project is essential for your project’s success.

Cost and overspend

Project overspend seems to be one of the most common reasons why CRM projects grind to a halt, or fail altogether. For every project it is vital to budget for the unexpected – having contingency built-in can stop a project from running out of steam before it reaches the finish line.

When asked if they thought they had overspent, more than 72% of respondents said they had not. However, of the remainder who said they had overspent, just under 40% had done so by up to 25%. And just over one-quarter said they had stretched their budgets by up to 50%. Perhaps alarmingly, just over 16% of those who overspent estimated they had done so by more than 100 %.

Defining your projects 

Judging by the responses to the survey, there is often a thin line between project success and failure – something that many not-for-profit organisations have found out, often to their cost.

These projects are more sophisticated and demanding than expected, so you need to define yours properly, long before signing contracts with any supplier. As ever, successful projects are based on sound foundations that include an internal review focused on getting the best from your people and processes before tackling the technology decisions.

Make sure you ascertain your requirements, project planning and management, Board engagement, staff and stakeholder involvement, budgetary planning, and resourcing – all these play a key role in reducing risk and ensuring your project’s success.

Importance of resourcing

It is clear from the survey that simply adding a project to an internal team’s workload increases the risk of failure. Having the right resources dedicated to a project also appears to be important to the success of many CRM projects, with a majority of over 66% of respondents agreeing that they had employed external resources.

Having these additional external help organisations to define goals, establish and run a project helps reduce/avoid risk.

One of the big questions arising in the survey is whether external consultants are telling clients what they think they want to hear, or telling them “the truth”. That includes laying down clear expectations, setting the scene for how challenging projects can be and what is required to make them successful.

One conclusion that can be drawn from the research is that not all consultants are equal – some have more skills, experience and knowledge than others. And while not all organisations would choose to work with external experts, a majority of those we surveyed recognise the benefits of using them.

The ‘CRM Projects: why do they succeed or fail?’ report, as well as additional analysis, was launched to delegates at the prestigious TechSmart Summit on 30th November 2016 in London. Please download the summary by downloading the guide opposite or download the deep dive report here.