Top 8 CRM Project Risks and How to Mitigate Them for Success

Top 8 CRM Project Risks

CRM projects can revolutionize business processes, but they often come with significant CRM project risks that lead to delays, increased costs, or outright failure. In this post, we explore the most common risks CRM projects face and how to avoid them, ensuring smooth implementation and long-term success.

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Background: The High Failure Rate of CRM Projects

Systems projects, particularly Customer Relationship Management (CRM) implementations, are notorious for their high failure rates due to common CRM project risks. Yet, with the right approach, most of these risks can be identified and mitigated. Understanding the key CRM project risks will help ensure your project delivers value and meets your organization’s expectations. ( Learn More )

Risk 1 – Scope Creep in CRM Projects

Scope creep occurs when extra features and tasks are added to a project that were not part of the original plan. CRM systems, like Dynamics 365, offer flexible and powerful tools that make it tempting to add features on the go, but doing so can lead to significant problems.

Implications

• Delays: Expanding scope leads to extended timelines, delaying the ROI.
• Increased Costs: More features mean higher implementation costs.
• Higher Risk: Additional features increase the complexity of the system, raising the chance of technical failures.
• User Adoption Challenges: If too many changes are introduced, users may struggle to adapt to the system, hindering adoption.

Example

For instance, while AI tools like Copilot in Dynamics 365 are incredibly useful, introducing them mid-project can complicate things. It’s often best to hold off on adding such features until Phase II of the project

Mitigation

Avoid adding non-essential features during implementation. Focus on delivering the core functionality first. Any changes that don’t provide immediate, measurable benefits should be left for a future phase once the system is live and stable.

Risk 2 – Unknown Unknowns in CRM Projects

Unknown unknowns are challenges that only surface once the project is underway. These are not part of scope creep, but rather unforeseen issues that no one predicted.

Implications

• Scope Changes: Unknown unknowns may require changes to the project scope, impacting both budget and timeline.
• Critical Adjustments: Some unforeseen issues may require immediate attention, especially if they affect key functionality.

Example

A common scenario is when end users test the system and discover workflows or features that don’t align with their day-to-day processes, saying, “That’s not how we actually do things.”

Mitigation

Involve end users early in the discovery phase. Their hands-on experience is crucial for identifying potential gaps in the requirements. Ensure that the project environment encourages open communication so that unforeseen challenges can be addressed before they become critical issues.

Risk 3 – Poor User Adoption in CRM Projects

A technically sound CRM system is only successful if its users actively embrace and utilize it. Adoption issues arise when the system doesn’t align with user needs, or when users feel left out of the decision-making process.

Implications

• Inconsistent Data: Poor adoption leads to incomplete data entry, undermining the reliability of the CRM system.
• Reduced ROI: If users aren’t fully onboard, the system’s potential isn’t maximized, reducing the overall return on investment.

Example

Consider a sales team where Sally the Salesperson follows up with a lead, only to find that Jim the Joker has already spoken with them but didn’t update the CRM. This creates confusion and damages the team’s professionalism.

Mitigation

Ensure strong support from upper management and make users feel invested in the project. Regularly update users on the project’s progress and involve them in testing phases to build ownership. It’s also essential to minimize surprises by keeping users informed about any changes.

Risk 4 – Timeline Delays in CRM Projects

Long timelines can cause a loss of focus and momentum within the team, leading to stalled projects or missed deadlines.

Implications

• Loss of Momentum: Prolonged projects lose urgency, causing stakeholders to de-prioritize tasks.
• Increased Costs: Longer timelines can lead to higher costs as more resources are required to complete the project.

Example

Many teams begin with strong momentum but lose focus as the Go-Live date approaches. When teams are juggling their day-to-day tasks with project implementation, procrastination can set in, especially when the deadline feels distant.

Mitigation

Keep the project timeline concise. Where possible, aim for completion within six months. Avoid overcomplicating the project by adding non-essential features. Keeping a tight timeline ensures the project remains a priority.

Risk 5 – Poor Communication in CRM Projects

Communication breakdowns—whether between the client and implementation team or among internal stakeholders—can derail a project.

Implications

• Misaligned Expectations: Poor communication can lead to gaps between what the system delivers and what the business needs.
• Process Gaps: Important details about daily processes may be overlooked if end users aren’t effectively communicating their needs.

Example

Consider an end user who currently needs to jot down a reference number to retrieve information from another system. If this need isn’t communicated, the new CRM might not integrate this functionality, leaving users with inefficient workarounds.

Mitigation

Maintain regular communication with all stakeholders. Implement an Agile approach with frequent check-ins to review progress and adjust as needed. A steering committee should be established to represent all stakeholder groups, ensuring everyone’s needs are addressed.

Risk 6 – Lack of IT Support for CRM Projects

Even with cloud-based solutions, buy-in and support from the IT department are critical for project success.

Implications

• Delayed Setup: IT is responsible for critical tasks like security configuration and system setup. Without their involvement, these essential tasks can be delayed.
• Security Risks: If IT doesn’t fully support the project, security measures may not be properly implemented, putting the system at risk.

Example

Some IT departments prioritize security over accessibility, which is generally good. However, if they restrict essential permissions during implementation, it can delay the project.

Mitigation

Engage IT early in the process. Make sure IT tasks are clearly defined and scheduled within the project timeline. Communicate the importance of their support to the project’s overall success.

Risk 7 – No ‘Super Users’ in CRM Projects

Super users are critical to a successful CRM project because they act as internal champions and go-to experts for the rest of the team.

Implications

• Knowledge Gaps: Without super users, the team may lack internal expertise, leading to over-reliance on external support.
• Reduced Adoption: Regular users are more likely to approach a trusted colleague than external consultants for help.

Example

When relying solely on group training, details can be easily forgotten. Super users provide a crucial safety net, ensuring that the team has someone knowledgeable to turn to for help.

Mitigation

Identify at least two super users at the beginning of the project. These users should be involved from the discovery phase through implementation. Backfill their regular duties to allow them the time needed to fully engage in the project.

Risk 8 – Weak Test Planning in CRM Projects

A thorough test plan is essential to ensuring the system works in real-world scenarios. Weak testing often overlooks edge cases, leading to significant problems post-launch.

Implications

• Unaddressed Issues: If testing focuses only on standard scenarios, the system may fail to handle unusual but critical cases.
• Costly Fixes: Fixing issues after launch can be expensive and time-consuming.

Example

In a typical scenario, if a customer places an order that exceeds their credit limit, a manual process might involve calling the customer or finance department to approve an override. In an automated CRM, this step could be missed if not properly tested.

Mitigation

Work with end users to create real-world scenarios for testing. Encourage them to describe common problems they face in their daily tasks and use these stories to create a comprehensive test plan. Testing should cover not only standard processes but also edge cases that may arise.

Conclusion: Ensuring CRM Project Success

CRM projects are inherently complex, but understanding and mitigating these risks will significantly improve your chances of success. By managing scope, improving communication, fostering user adoption, and ensuring IT support, you can complete your project on time and on budget.