The Top 10 Reasons Why Software Implementations Fail

We never go into a software implementation thinking it will fail.  However, we live in the real world, and we know that few companies today achieve successful software implementations on the first try.   Most of the time, the reason for failure also has little to do with the actual software itself.  This is true for CRM Software, Accounting Software, ERP Software…pretty much any substantive type of software project to be implemented.   In the US, a recent study estimates that over half of all Accounting, ERP, and CRM implementations fail to meet their objectives. In Europe, the corresponding statistic is 70%–80 % (!!!)

Here are the most common reasons found for failures:

1.         Not Defining Clear Objectives for the Project

Not defining clear objectives for the software implementation is a commonly cited contributing factor associated with failed implementations. A successful project is one that attains its objectives, but it is amazing how many business entities undertake a CRM solution with vague, unidentified, immeasurable goals.   Labeling a project unsuccessful requires some degree of measurement, and if a company does not calculate pre-implementation assessments of critical objectives, it becomes impossible to pinpoint the issues responsible for either success or failure.

2.         Poor Planning or Project Management

Poor planning or project management will not only contribute to an ERP implementation failure, but also often result in staff embarrassment and job loss.   A contributing reason to implementation failures is when the implementation becomes overly disruptive to the organization’s daily business practices. There is a fine balance between dedicating the necessary time and resources to a new project and showing results.   Many times existing employees are asked to not only do their regular jobs but also implement the new software at the same time.  This is a tough road to travel.   One person from the company needs to be designated the Internal Project Manager who’s job it is to liaise with the External Project Manager.   Regular status meetings over pre-defined intervals are critical especially in the early stages of the project.

3.         Believing that software will solve your problems when software is just a tool or enabler

Organizations that believe CRM software is “Customer Relationship Management” are not going to achieve CRM. It must be recognized early that CRM software is merely an enabler to achieve CRM, and while the two are related, they are separate.   If you are doing things ineffectively, then software will likely make you more efficient at doing ineffective things.   You want to do the right things the right way.   All too often we end up automating the wrong things so we end up doing the wrong things the right way.

4.         Trying to Use or Add Every Feature in the New Software Right Away

Do not attempt to implement every feature inherent in the software right away.  In general, a phased approach is a more common tactic to achieve success.   Have a specific list of key success factors (see reason #1) and then focus on those specific features that will help you achieve that success.    Also, be careful with asking for too many customizations right away.   This can drag the project on and on, possibly over budget, and make success more of a moving target.

5.         Insufficient Training and Support

Insufficient training and support delivered during key periods can bury a project. User adoption rates drop off for a number of reasons, but two rank high on the list – lack of training and support prior to and post implementation. Sometimes this occurs not because the training and support are absent, but because it is not provided in the appropriate format.  A remote sales force, for example, may not be able to rely on in-house personnel for remote support.

6.         Not Getting Buy-In from Employees Ahead of Time

This may be the most common reason across all organizations.   All employees must believe in the CRM strategy and the supporting program and software. They must be educated in order to buy-in to the CRM implementation and utilization.  One of the most important quantitative gauges of success can be the user adoption rate.  If only the self-motivated utilize the system, it is not successful.  Use a combination of rewards and procedures to spur users’ buy-in, and recognize that this is necessary for all personnel, including executives.  And, lastly, the most important factor in getting user adoption is the degree to which upper management supports and mandates the software implementation.   Significant communication from management is critical in this area.

7.         Incomplete, Erroneous, or Bogus Data in New Software

Another reason for poor user buy-in is incorrect, incomplete or bogus data. Marketing cannot direct concerted successful campaigns if prospect information is inaccurate. The same holds true for both the Sales and Service divisions, and, indeed, in these lines of business, erroneous records can bring operations to a complete halt, ensuring dismal failure.   Make sure data is converted accurately and completely before turning on the switch.   Or, if not, make sure there is plenty of communication with staff about what’s happening.

8.         Not Planning for Change or Handling Out of Scope Issues

Not planning for change and delineating a specific method of handling each out-of-scope incident can doom a project. Besides user adoption rates, two other important gauges of a successful CRM implementation are budget and cost overruns. Both of these are simple, quantitative evaluations easily measured by objective analysis. If a project was supposed to be completed within six months, but actually took in excess of a year, users will view it as unsuccessful and become reluctant to associate with the project.   Make sure you’re prepared for changes and how you’ll be handling them.

9.         Unstable hardware or network platform to support the new software

An unstable or insecure hardware and network platform is likely to challenge system integrity and can often impose political risk that kills a project.  This can be especially critical for hosted solutions where internet connectivity may be spotty or poor performing.  Make sure you have a fast, reliable internet connection before implementing hosted software.

10.       Choosing the Wrong Software and/or the Wrong Provider

If a provider is chosen that is too expensive, lacks expertise, cannot understand your business model and or cannot train employees properly – the software implementation will be a failure. It may never actually get off the ground. Sometimes it can also boil down to personalities. Some providers are so enamored with their solution that they do not spend enough focus on the business needs of the company involved. Choose wisely.  If the software itself isn’t flexible enough to handle changes in business processes or can’t support the number of users, the project can fail as well.

In addition to the 10 common scenarios presented above, we also run into an 11th, more insidious reason for failure.   Is the organization actually capable of surviving a big software implementation?   Many times there is a long history with an existing software package, and company management believes the grass is greener with something “new”.   However, it’s critical for management to understand that no software package will likely achieve more than 80% of what you need (at best) out of the box, and the remaining 20% is either accepted or there needs to be customizations or work-arounds to close the gap.   If you’ve already got an “80% solution”, you might be better off tweaking the existing solution than introducing the disruptive tendencies of a big new software undertaking.   We’ve seen attempts at big software implementations that have crippled companies for years.   “Bigger” software is not always better.

Naturally, the list above is not all inclusive of reasons why software implementations can fail.   There are plenty of other factors.   However, if you take action to avoid the traps listed above, it will go a long way towards a successful software project.   And, make sure to discuss them all with your software provider.   This doesn’t ensure a successful implementation, but it does put the odds in your favor.