Prone to Failure: Why CRM and Billing Systems Implementations Are High Risk

The North American wireless carrier tackled the replacement of a legacy CRM application with a Siebel solution in order to support marketing analysis and channel activities. After approximately two years of implementation work, the project was canceled and the carrier continued relying on the legacy application.

The satellite content distribution company decided to replace a legacy CRM application with Siebel. The project was expected to last 1.5 years but ended up requiring three years. However, once the application partially was implemented, a combination of factors (management changes in the company, higher than usual software license fees, and potential scalability problems) led to the cancellation of the project and consequent decommissioning of the project.

Figure 1 presents the schedule and budget outcome of the five cases:

As the figure shows, the projects that led to a final cutover incurred cost overruns ranging between 44 percent and 125 percent and schedule extensions of seven months to two years. On the other hand, cancellations were decided after a timeline extension of more than a year, and a cost overrun exceeding 133 percent. What was the business impact of all these problems?

Impact on the Business

In addition to the economic losses, the impact of cancellations and delays varied by project. They can be categorized into two areas: technical and business impact. The technical impact (e.g. downtime, problems with data integrity) can be directly linked to the project itself. The business impact pertains more to the hypothetical inference of cause-effect from the delay or the cancellation of the project and business performance.

The technical impact can be easily ascertained in the case of projects that were completed.