Business strategies that focus on coddling the customer have been around as long as the corner drugstore. When Internet shopping came along, giving customers more power but less personalized service, companies began to look for innovative ways to search for newly fickle clients and analyze shopping patterns. Vendors jumped at the opportunity, coming out with new software packages that automated sales and marketing departments, as well as call centers and systems that promised to link the front of the organization with back-office systems.

Despite the criticism that CRM systems are hard to implement, Siebel claims that the vast majority of its customers are happy with its product. According to David Schmaier, Siebel’s executive vice president, a recent outside audit by Satmetrix Systems of Mountain View, Calif. (Siebel is a minority owner of this company), showed the vendors’ customers boosted revenue by using Siebel software and also reported a 21 percent increase in customer satisfaction levels.

Still, many who work with companies involved in CRM projects say those figures mask a widespread level of confusion. David Dobrin, president of B2B Analysts in Cambridge, Mass., says he has visited six Fortune 500 companies during the past two years to examine large-scale CRM implementations and described the projects as either "moribund" or used in a way that didn’t match initial expectations. "The scope and the benefit are far less than what has been talked about in CRM vendor sales pitches," Dobrin says.

Adds Liz Shahnam, a senior analyst at Meta Group: "Within the next 12 months, if the vendor community doesn’t respond, people are going to start holding them accountable."

Schmaier admits that some projects fail, but he argues that’s due largely to the fact that sales and marketing departments aren’t used to the automated systems that have made finance and manufacturing hum for years. The trick is to work with qualified and certified systems integrators, he notes. Siebel, which certifies consultants to implement its software, also has its own group of systems integrators who work with 15 percent of its customers. In a typical CRM implementation, 28 percent of the total cost goes to buying software, while 38 percent of the cost goes to services such as software customizations, application integration and training, according to Wendy Close, a research director at Gartner in Stamford, Conn. Hardware makes up 23 percent of the cost, while telecommunications expenses make up the remaining 11 percent.

But when a CRM project does run into trouble, CIOs are often the ones who suffer the most. "It happens all the time in this field," says Evelyn Follit, CIO and senior vice president at RadioShack in Fort Worth, Texas, which is now evaluating CRM vendors for its initiative. "After the Internet, CRM is the next silver bullet. There are heightened expectations that IT folks are going to deliver something." However, if the company’s CEO and top sales and marketing executives aren’t actively involved, the tricky task of imposing new systems on the workforce can easily fail.