Despite Increased Spending, 29% of Companies Report an Implementation Failure Today, AMR Research released a report stating that customer management application spending will increase 16% in 2008 to nearly $2,200 per employee. Mid-market companies (<$1B in revenue) will see the greatest spending increase at nearly 22%. This year’s report reveals a number of industry positives: 2008 will see the largest average planned increase in CRM budgets to date, and the appeal of software-as-a-service (SaaS) is growing and impacting the industry average for upgrade rates (65% of companies now upgrade at least once a year, with 25% upgrading even more frequently). But these positives are counterbalanced balanced by a set of somewhat alarming data points: - CRM failure rates remain far too high: 29% of companies reported an implementation failure that kept them from going live with the software versus 31% last year and just 18% in 2005.
- User adoption remains a challenge, with 33% to 47% of customer management applications facing serious adoption issues.
- Unused seats of CRM remain a challenge, with 25% of all licenses undeployed.
“There is an interesting paradox going on in CRM right now,” explains Rob Bois, research director at AMR Research. “Spending has reached an all-time high, with expectations nearly as lofty. But implementation failure rates have not improved, nor have ROI metrics. Both buyers and vendors need to figure out how to close this gap soon, or we’re just going to repeat the same mistakes made in the late 90s all over again.” For more information about this report, please visit www.amrresearch.com or call 617-542-6600. About AMR Research: Research and Advice that Matters: AMR Research is the No. 1 advisory firm focused on supply chain, enterprise applications, and infrastructure. Founded in 1986, AMR Research provides advisory services and peer networking opportunities to supply chain and technology professionals in the manufacturing and retail sectors. To learn more about our research and services, visit www.amrresearch.com.
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