SAP CRM projects at risk, Gartner says

A Gartner study projects that through the end of 2008, 25% of CRM projects will be postponed or cancelled, with SAP projects potentially vulnerable

Through the end of 2008, 25% of CRM projects will be postponed or cancelled, according to Gartner.

This rate of postponement and cancellation is largely a result of a CRM skill shortage -- of consultants and systems integrators in particular -- the Stamford, Conn.-based research firm says in a recent report.

SAP CRM projects are more likely than projects involving other CRM vendors to run into these problems.

"Demand outstrips supply for skilled, experienced SAP CRM consultants," said Matthew Goldman, research director for Gartner. That's thanks not only to new SAP CRM sales, but because many customers held off on deploying CRM until they finished their ERP rollout.

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With this market shortage of qualified resources, how can companies with pending SAP CRM projects avoid these pitfalls?

Delays happen around alignment and staffing, Goldman said, so companies looking at CRM projects can take some steps to ease problems in these areas.

When starting a CRM project, it is important to understand the project goals specifically and also how they fit into the overall goals and objectives of the larger enterprise. How CRM fits into the greater organizational agenda is critical.

"Alignment of those two objectives is a huge concern," Goldman said. "When addressed early, it sets the project up well."

Organizations should also set project parameters.

"Measure start and finish lines for the project," Goldman said. "Where are we today? Where are we going? How do we know when we get there?"

On the staffing front, identifying the types of skills needed to complete a project is a task that it's important to complete early on. Look for potential partners that have the correct resources to meet the CRM project's needs and that also match the rest of the organization's procurement standards, Goldman said.

Keep in mind that different phases of a project will probably require different people and skill sets, he said. Companies must choose partners that can keep the appropriate resources in place for relevant phases of the project and then transition effectively -- whether back to internal resources or to other teams from the service provider.

Goldman urges companies to consider all available options for service providers, "especially here where there seems to be some challenge in the marketplace [in acquiring people with the correct skills]." This means looking at software vendors, SAP, staff augmentation firms, third-party consultants, and others.

The SAP CRM skills shortage presents an opportunity for third-party skilled resources to jump in and fill the skills gap.

These third-parties will be able to command higher rates for SAP CRM projects than for other CRM implementations. So it is important, Goldman believes, that companies implementing SAP CRM revisit their planning assumptions to account for the potentially higher costs.

Some delayed projects are inevitable, despite a company's best efforts. When faced with delayed projects, there are three options: Wait out the delay, improve current legacy systems, or simply do nothing. "Doing nothing is the least preferred option," Goldman said.

Better to revisit legacy systems to see whether they can be better leveraged than to doing nothing, Goldman said, "if you wait for your project to take better care of your customers," he said, "you can wait too long."

The market will eventually adjust -- it is a matter of simple economics, supply and demand. But for now, Goldman said, these ideas can help companies prevent their projects from falling into the ignominious 25%.

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