Poor CRM is the Achilles’ heel of Irish firms

2 Feb 2006

An overwhelming 67pc of Irish businesses do not know where their business comes from and the majority of firms don’t have a mechanism for recording, managing and analysing vital business information such as best customers and future business leads, a major survey of 800 Irish firms has revealed.

The survey, conducted by Microsoft Ireland, found that less than one third of Irish companies have full-blown customer relationship management (CRM) systems in place and more than half of all Irish companies say they have no CRM system whatsoever.

The Microsoft survey, which was published as part of a report entitled Customer Driven Productivity – A Study on CRM Practice in Ireland, highlights a distinct lack of understanding of CRM as a business strategy with many interpreting it solely from a technological standpoint.

Where CRM technology is in place, it is typically only being used in a few functional areas rather than across the entire organisation, so companies are not taking advantage of the rich set of features that CRM systems offer for managing their business.

Of those using bespoke systems developed internally, 51pc were more than five years old while 22pc were more than 10 years old. The report also indicated that large corporations were no better placed in terms of CRM than smaller Irish companies.

John McCormack, chairman of the Sales Institute of Ireland, expressed concern at the lack of deployment or understanding of CRM in Irish businesses. “A number of reports, including The Enterprise Strategy Group’s Report, Ahead of the Curve, have highlighted Ireland’s lack of customer insight as an Achilles’ heel that could affect our ability to compete nationally and internationally.

“Microsoft’s findings are especially worrying as they indicate a lack of understanding as to the competitive advantage that getting closer to customers can offer. It also means that these companies have no formalised way of harnessing the business they already have and have little or no view of their sales pipeline. In essence the majority of Irish companies are flying blind if they are making decisions without this vital information,” McCormack warned.

The Microsoft report revealed that only 19pc of Irish companies use a dedicated CRM system such as Microsoft CRM, SAP or ACT. Only 14pc had a bespoke system that was developed in-house.

Some 12pc of firms claimed to be using a CRM system, but further investigation revealed that it had little or no CRM functionality such as a fax software product. Some 3pc of firms that claimed to be using a CRM system were later revealed not to have any CRM functionality such as spreadsheets.

A staggering 52pc of Irish companies said that they are not using any CRM system whatsoever. When respondents were quizzed on their plans for future implementations or upgrades, 51pc said they had no plans to review their CRM capabilities.

A further anomaly in the situation was encountered in terms of revelations that many large corporations had no CRM systems whatsoever while some smaller indigenous companies were streets ahead of their larger counterparts by using sophisticated CRM systems.

Neil Tanner, group manager of Microsoft Business Solutions, commented on the findings by saying: “Competition both nationally and internationally is a fact of life for most Irish businesses. CRM as a business strategy presents an opportunity for organisations to get closer to their customers, offer better customer service and potentially add significant additional revenue.

“However looking at the research there are a number of factors hampering the adoption of CRM in Ireland. A lack of understanding as to what a CRM strategy entails, coupled with poor experiences with CRM technology have resulted in a negative perception of the value of CRM.

“As markets continue to become more competitive, this lack of focus on managing the customer could adversely effect Irish companies. Coming on the 20th anniversary of the publication of Fergal Quinn’s book Crowning the Customer these findings serve as an indication of the current state of health of sales and marketing and effective decision making in Ireland,” Tanner warned.

By John Kennedy