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SugarCEO John Roberts: Why CRM fails, part 1

SugarCRM CEO John Roberts explained why 80% of CRM projects fail and how to reverse the trend, while in part two he described why CRM and Web services aren't a perfect match.

Proprietary customer relationship software (CRM) vendors gave a party, and all the guests left after one drink. Open source CRM can sweeten the user experience and keep CRM launch parties from falling flat, said John Roberts, CEO and co-founder of SugarCRM, in Cupertino, Calif.

In a recent interview, Roberts explained why 80% of CRM projects fail (according to Peppers & Rogers Group) and how to reverse the trend. In part two of this Q&A, he describes why CRM and Web services aren't a perfect match.

Why is the failure rate of CRM projects so high?

John Roberts: Billions of dollars have been wasted on CRM applications because users didn't adopt them.

SugarCEO John Roberts' CRM evaluation tips

1. Ask the vendor how much of the product's price is going to development and how much to sales and marketing. Only the development expenditure is improving the product or helping the customer.


2. Look at the issue of vendor lock-in. Are you restricted to one platform?


3. Is the source code open or closed? Are you just provided with APIs or can you actually modify the software?


4. Are there third-party CRM consultants available in your area? There are tens of thousands in the open source world. In the proprietary world, there are less than a thousand, and they're going to want top dollar to work on a proprietary platform.

In my presentations, I ask audiences how many of their companies have CRM. In most cases, 100% of the people raise their hands. Then I ask how many people actually use it on a daily or weekly basis, and only about 20% raise their hands, and even they have sheepish smiles on their faces.

In a lot of cases, companies deploy CRM, and there's a lot of euphoria over it for the first couple of months. Then, people stop using it. They look at it as 'Big Brother' watching them. CRM is sold as a tool to make an organization more effective and efficient; but the end user doesn't see CRM as making them more efficient and effective.

In general, what types of people use or don't use CRM?

Roberts: Typically, the people who actually use CRM are at a desk looking at their computer all day long. They're in one place, and it's easy for the company to train them on the detailed, intricate user interfaces found on proprietary CRM products today.The trouble is, the people who should be using CRM are not those who sit at their computer all day. They're salespeople. They have a different mentality than the person who is using CRM at a desk all day doing routine tasks like order entry. That's where you have this disconnect.

People in the field use CRM for about 15% to 20% of their time, and a lot of times it's voluntarily. They may get reprimanded, but they're not going to get fired for not using it if they're making their numbers.

What's needed to get field workers to use CRM regularly?

Roberts: They need an interface that is easy, efficient and fun to use. It's got to work with the fewest amount of keystrokes. They have a different user experience than the office worker does, and the interface is to appeal to them.

I think there is a lot of work to be done in terms of making CRM applications more intuitive, useful and mission-oriented in terms of providing the info they need to do their jobs better.

How well do business intelligence and CRM work together today?

Roberts: Business intelligence is only as good as the data in the system. Today, too many employees aren't putting their data into CRM. As a result, management didn't get the insights into operations that they'd hoped to get.

If your employees use CRM more, they'll create meaningful data to which you can connect business intelligence tools.

A year from now, there will probably be five to 10 open source business intelligence tools that will be comparable to the proprietary ones on the market today. They'll provide meaningful alternatives to proprietary-based intelligence platforms.

Why does SugarCRM build on the LAMP (Linux, Apache, MySQL, PHP/Perl) stack?

Roberts: We wanted to build the fastest user interface on the planet. We decided to go with the LAMP architecture, which is an open, user-friendly open source language. Shipping a million lines of C++ isn't really useful for in-house developers. If you ship a million lines of Java, that's somewhat useful. PHP, however, is a mature scripting language that people are not afraid of. It's capable of supporting very large implementations and generating very rich user interface experiences. It's also extremely fast in the way that it renders, and it runs on pretty much every platform out there.

For more information

Read part 2 of Roberts' interview here

Open source bridge customer info gap

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The LAMP stack works well on top of the service-oriented architecture for a large deployment. In some cases, it adds functionality to use the J2EE [Java 2 Platform, Enterprise Edition] infrastructure underneath LAMP.

LAMP has many more benefits than ASP or .NET for building an extremely rich, super-fast, highly customizable environment.

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