Why CRM Centers of Excellence Fail


  • A CRM Center of Excellence fails when it does not deliver measurable business value that its constituents care about.
  • It also fails when it is unable to architect the Customer Relationship Management application to achieve user, customer and business outcomes that matter.
  • And it fails when it is unable to gain widespread user adoption, achieve high software utilization and deliver an impressive ROI.
Johnny Grow Revenue Growth Consulting

The Top 6 Reasons Why CRM Centers of Excellence Fail – and the Strategies to Succeed

Anybody who thinks standing up a CRM Center of Excellence (CoE) is easy or straightforward has probably never stood one up.

We have been doing this for many years, have the benefit of a CRM Center of Excellence implementation framework, and still incur some tough challenges.

While there are many risks that can derail success, the top risks occur with such frequency that they can be planned for and proactively mitigated with a risk management plan.

CoE Risks and Mitigating Strategies

Here are the top risks when implementing a CoE and the mitigating strategies to prevent, mitigate or respond to those risks.

Why CRM Centers of Excellence Fail

Risk 1: Unclear Mission or Poor Focus

Customer Relationship Management software is a broad enterprise application with many constituents.

Trying to satisfy everyone generally results in satisfying no one. An unfocused CoE will be unsuccessful.

Successful programs are built on core competencies that are linked to business outcomes. It takes specialized resources with deep skills to exploit the CRM system to make that happen.

Using specialized resources outside their areas of expertise or using general resources across all tasks isn't a CoE, it's a helpdesk, and will not deliver the expected benefits.

To mitigate this risk, establish a clear mission backed with a scope of specific services. While the original scope of services may be small, the CoE will demonstrate true expertise that delivers meaningful outcomes and significant payback. Over time, you can expand the scope of services.


Risk 2: Poor Strategy or Roadmap

A CoE strategy is a lot like a map. You need to understand where you are starting from, define where you want to go and plot the shortest route to get there.

Your company's business strategy architects the competitive advantages and go to market plan that drive company growth. Your CoE strategy should show how to engineer the CRM software to achieve business outcomes that align and support the company's business strategy.

That may include revenue goals such as increased customer acquisitions, customer lifetime value or customer tenure, or cost savings goals such as lower cost to serve or higher staff productivity.

It's important to remember that Customer Relationship Management isn't a software application. It's a business strategy aimed at growing mutually rewarding and profitable customer relationships. And that business strategy is empowered with enabling technology called CRM software. Don't confuse strategy with software.

Operational Excellence

Also avoid deploying technology in the absence of accompanying strategy. It's important that any technology application show specifically how strategy, people, processes and software are optimally orchestrated to directly impact the company's most important customer and revenue objectives.

You can manage technology without an accompanying strategy, but what normally happens is the results slip from strategic objectives to tactical goals such as getting data into a system, measuring staff activities or producing a sales pipeline report. These may be valid goals but do little to nothing to improve customer relationships or contribute to the company growth strategy.

And if your CRM software doesn't improve your customer relationships, well then, you miss the point of Customer Relationship Management, and will instead revert to CDM (Customer Data Management). CDM may have some value but falls woefully short in helping the company achieve its most important business objectives.

Instead, develop a CoE CRM strategy that directly supports the company's business priorities, and makes the technology and the CoE something the company cannot live without.


Risk 3: Culture Challenges

When implementing CoEs at clients it's the culture issues that seem to most surprise CoE staff.

Many times, CoEs are initially staffed with resources from customer facing departments or lines of business. For recruiting and their own branding, they may promote themselves as experts with superior skills. That can come across as suggesting the people they serve are not experts and create resentment among their internal customers.

The CoE should create a brand but be careful not to come across as arrogant, standoffish or a group of prima donnas.

CoE staff should then go further and develop and nurture relationships with the users they serve. While boundaries are important, it can be okay to consider users as part of a solutioning team for specific objectives or projects.

Recognize that even if the CoE can solve the users' problems, they can't make the users use their solutions. Only the staff can deliver the last mile of any CoE solution. And they may only do that if they have a working relationship with the CoE.

Finally, CoE staff should also develop relationships with the IT organization. It's critical to establish clear delineation between these two technology focused groups.

To mitigate culture issues, secure cross functional executive sponsorship, develop relationships with the user community, collaborate with IT and consider a change management program.


Risk 4: Fail to Prioritize Objectives That Matter

Center of Excellence research finds there are many common CoE objectives, but they tend to be standalone and without prioritization.

Research and experience show there is a path to sustained success. And that path is best navigated along the three phases of achieving user goals, then customer goals, and finally company goals. The order here is important.

For most companies the first goal is CRM user adoption. That's because it is a prerequisite for everything that comes after, and also because it is a perennial challenge. Slow or low user adoption is a top cited contributing factor to software deployments that fail to achieve their objectives or just fail outright.

Many executives see the signs of slow adoption, but naively believe the staff will eventually come around. In fact, experience shows the opposite is more likely. The longer it takes to achieve acceptance, the more probable the technology will fail to become sustainable.

When users fail to see the personal value from application, they revert to the bare minimum operation, maintain separate shadow systems (often spreadsheets) and marginalize the system.

The key to user adoption is to satisfy the most important user goals. We group user goals into three categories of professional, productivity and personal goals. And the best way to surface the most important user goals is with a CRM Design Thinking workshop.

That exercise can also identify the most important goals for customers. Another popular method is a Voice of the Customer (VoC) program. It's important to recognize that if your technology doesn’t make your customers lives any better, it's unlikely to help grow customer relationships and customer share.

Finally, with the prior two constituent groups satisfied you can move toward company goals.

The big mistake here is that for many CoEs the objective of CRM software is to perform transaction processing that does little more than capture data. That's a case of installing technology for technology's sake and is certain to underwhelm. There's no benefit of capturing data unless that data is converted to actionable insights. This comes back to the prior section of aligning the CoE with the company's growth priorities.


Risk 5: Fail to Group and Sequence Objectives

As touched upon in the prior section, there will be no shortage of CoE objectives. However, there will be a shortage of time and resources to achieve them. That's why objectives should be evaluated holistically.

Each objective can be pursued individually but that misses the bigger opportunity for efficiency and synergy.

The risk with objectives is not considering how to pursue them in a progressive sequence whereby each completed objective delivers its anticipated payback and jump starts the next.

For example, if the CoEs task is to apply technology in ways that help marketing acquire more sales-ready leads for the salesforce, they can consider options such as campaign mixes, campaign attribution, conversion optimization and lead management. Or they can sequence these methods as each one drives the next and together, they deliver a much greater cumulative effect.

CRM apps have hundreds of capabilities. However, companies really have a very short list of the most important business outcomes, such as increasing customer acquisitions, customer share and customer retention.

Starting with the business outcomes and working backwards will make it much easier to determine which application methods or capabilities work together to achieve those results.


Risk 6: Fail to Show Clear and Compelling Value

Company skepticism for the CoE is highest in the beginning so it's important to show real value early.

At the start it's a mistake to take on big problems that consume months of time. A better approach is to seek out problems that can deliver quick wins that are important to users.

And because perception is reality, just accomplishing those wins is not enough. You need to promote them to gain credibility and link them with company outcomes.

It's especially important to promote achievements in business terms, such as revenues generated, costs reduced, or costs avoided, and not in technology terms.

We recently worked with a software as a service technology client to stand up a CRM CoE. We quickly focused on the company's customer churn. In just under six months, we were able to calculate customer health scores, forecast at-risk clients, deliver an automated series of 'surprise and delight' actions and reduce customer churn by 5 percent. That increased annual revenue by 5.5 percent and delivered a home run that put the CoE on solid ground.

Finally, it's a good idea to check back on prior accomplishments to make sure the results are sustained. Many times, things change so a few adjustments are needed to maintain results.

Unaccountable CoEs are unsustainable. It's critical to demonstrate top line and bottom-line impact to the company and ROI based on the budget.

The top 6 reasons CRM Centers of Excellence fail and the risk mitigation strategies to succeed.

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CRM CoEs most often fail for the same reason CRM systems fail – they don't deliver measurable business value that people care about.

That's why it's so important to apply best practices and calibrate actions and budget to the revenue results that most matter.

Only when these specialized business units directly improve the most important user, customer and business outcomes will they earn high CRM user adoption, achieve high software utilization, deliver an impressive ROI and become sustainable.