What is also missing in many of these earlier CRM implementations, experts say, is a management strategy that identifies important customer data and lays out a disciplined governance process to ensure its quality and its integration with critical systems. "Unless companies have a broad strategy about how [to manage their data], no matter how good transactional systems are, they’re not going to be able to deliver," says Ronda Krier, Oracle’s senior director of product strategy.

An increasing number of CIOs are now realizing the importance of such a data management strategy and are experimenting with Web services technology to unite legacy systems with new applications without having to rip and replace everything. Many of these CIOs are building a service-oriented architecture that can integrate their divergent applications into a CDI hub via the Web.

However, much like the CRM implementations that preceded it, this new approach is neither cheap nor fast. Ray Wang, Forrester Research’s principal analyst of enterprise applications, says that average CDI installations cost nearly $5 million for licenses and implementation services. And they can take much longer than expected. (UnumProvident’s CDI implementation, still unfinished, has taken a year so far.) But that’s still cheaper and quicker than ripping out all of a company’s old systems and installing proprietary enterprise CRM.

A CDI strategy is especially relevant to mid-market CIOs who may not have the budget to buy proprietary CRM solutions or the time to invest in the typically arduous CRM implementation process which, according to Gartner’s guideline for enterprise CRM rollouts, can cost more than $20 million over a three-year period. (Some CRM failures have run up to $100 million in overall costs. See AT&T Wireless Self-Destructs, for one disastrous example.)

The beauty of [the CDI hub approach] is that most organizations already have most of the pieces in place," Wang says. "They just need to find a way to pull it all together."

The Problem’s Not the Software; It’s You
In the late ’90s, CRM vendors promised that their software could give companies the ability to leverage customer data to boost sales. That software cost millions and took years to install, and yet at the end of those marathons many companies were left with tools and systems they couldn’t or didn’t want to use. Integration often was incomplete, data frequently dirty, and all too often companies had no guidelines for who would own the data or how it would be input and reconciled among systems. Eventually, business and technology executives became disillusioned with the enterprise approach. Many companies, large and small, turned to on-demand CRM, only to find out it also had problems with costly customizations and real-time integration challenges.