Project failure rates, especially in the early days, were unacceptably high -- partly because companies did not take the time to understand their needs and partly because the vendors were not inclined to admit the limits of the technology.

"People just got caught up in the hype," Pivotal CEO Bo Manning told CRMDaily.com, and "in many cases, vendors grossly oversold their products." Like other new technologies, "it took the world four or five years to figure it all out."

Goodbye, Dinosaurs

Today's CRM systems hardly get used, said Louis Columbus, senior analyst with AMR Research. He called the first generation of CRM applications, which tend to be deep and feature-rich, "dinosaurs in today's market."

In the future, "the growth of CRM is going to be directly tied to how successful vendors are at understanding that the days of siloed applications are gone and that process-centric applications are the future," Columbus told CRMDaily. In other words, the CRM software space is poised to enter a new phase of development in which applications will be implemented not only for their specific functionality but also for how easily they can be incorporated into overall business processes.

The growing interest in analytics exemplifies this trend, according to Kevin Nix, vice president and general manager for Siebel Service Products. "What people are trying to do is take that sea of information they have collected throughout the enterprise and get more value out of it," he told CRMDaily.

Big Bang vs. Project-Based

Project implementation methodologies are set to undergo a shift, as well -- or, to be more precise, yet another shift. "We started out with CRM projects launched with a big-bang approach," Manning said. "When it became apparent that didn't always work for the best, companies shifted to the sequential project-by-project approach," rolling them out one at a time.

"But both approaches are wrong. Now, people say the answer is to implement as many projects, simultaneously, as leadership bandwidth will allow."

Actually, this is a combination of the two previous approaches, Manning said. Companies start with one or two projects, get them right, build confidence from that process, and then move on to two or three projects -- "but always in the context of a plan and always measured by metrics that let you know you are getting the results you want."

The CRM world has figured out that each component of CRM has value, Manning observed -- and "the real value lies in bringing all the pieces together."