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

   This article studies the risks involved in the implementation of billing and CRM systems in the telecommunications industry. It is based on five case studies of carriers that recently have attempted to implement such systems resulting in either outright failures or lengthy delays, and in costly overruns and negative business impact. We conclude that project failures are due to at least one of four factors: 1) intrinsic project complexity (such as attempting to implement billing and CRM systems within three carriers simultaneously); 2) limitations in the software platform (such as shortfalls in integration capabilities or abundant customization requirements); 3) project management shortfalls (including limited user involvement); and 4) lack of implementation capabilities (either in-house or within the systems integrator). A number of recommendations are made to limit the influence of these variables.

Introduction

The management of telecommunications service providers is becoming increasingly complex. Multiproduct lineups, pricing complexity, bundling, customer experience improvement and ever-shortening time-to-market are some of the challenges facing carriers. However, investment in information systems is nondiscretionary. Information systems remain the necessary tool to address complex business requirements, yet, they themselves are becoming increasingly difficult to manage. While information technology is a necessary competitive requirement, its deployment and operation can be fraught with risks.

This article focuses on the potential failures in implementing billing and CRM systems. These applications lie at the center of a carrier’s architecture. Their implementation requires significant investment, and although the industry is shying away from homegrown applications, the customization of off-the-shelf packages remains a lengthy project, entailing a large amount of resources, both in-house and from systems integrators.

We have studied the experience of carriers that have failed in implementing such systems. Our definition of failure is twofold: the straightforward case is canceling the project and decommissioning the system. This could be due to an inability to overcome implementation complexity, limitations of the chosen software package, lack of management commitment, or a combination of all three. The second situation is where the solution is implemented successfully, but after incurring a significant economic and schedule overrun.

Our analysis and conclusions are based on five case studies¹:

• A North American wireless operator’s implementation (13 million subscribers) of a CRM system from 2004 through 2006
• A North American satellite content distribution company’s implementation (12 million subscribers) of a CRM system from 2004 to 2007
• The Asia/Pacific operations of a global wireless carrier implementing a billing and CRM system from 2003 to 2007 (4.5 million subscribers supported by three subsidiaries)
• A European wireline incumbent’s implementation (35 million customers) of a CRM system in 2007 and 2008
• The wireless arm of a Latin American full service provider  implementing a CRM system from 2006 to 2008 (8.5 million subscribers)