Customer relationship management

Customer relationship management (CRM) is a system for managing a company’s interactions with current and future customers. It involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support.


Customer relationship management (CRM) has now joined the ranks of mainstream technology and it’s hard to find any organization that doesn’t want or need it in some form or another. And why not? CRM’s raison d’être is to improve customer relationships, and what organization doesn’t have customers? CRM covers the entire sales spectrum, from keeping track of customer contacts to selling, marketing and servicing. Moreover, as this year’s CRM vendor survey shows, most products now include not only customers but all contacts, including suppliers and referral sources.

CRM used to be dominated by big applications from SAP and Oracle (which purchased the first CRM vendor, Siebel, in 2005). SAP and Oracle are still top players in CRM technology, partly because their customers want integration with those companies’ ERP systems. But salesforce.com and Microsoft are now nipping at their heels. Salesforce.com was the first company to sell CRM using software as a service (SaaS) — a variety of cloud computing, where the infrastructure for supporting the software and the data is outsourced. SaaS is now considered mainstream as well, and just about every vendor is now playing catch-up to salesforce.com. Microsoft is also a market leader partly because it is best able to leverage Microsoft Outlook and other Microsoft products.

CRM is considered such a hot market that vendors are eagerly pumping R&D dollars into the technology and new vendors are emerging with more features and lower prices. Today the buzz is mostly about mobile CRM, social networks and CRM business intelligence (BI). Mobile CRM allows you to have CRM access on your mobile device but in a way that optimizes the small screen size. It should also mean you can work when disconnected from the central system on the web and resynchronize your data when reconnected.

Social networks such as Facebook and Twitter can be used as a way to attract customers or to find out what existing customers are thinking. BI is all about turning data into information to make decisions and with a ton of CRM data, there ought to be some valuable information worth analyzing.

The two problems we hear most about CRM are the lack of integration with ERP and users’ reluctance to use the technology. Integration is not just about linking contacts and customers between CRM and ERP. It also means making it possible for CRM to perform functions similar to those found in the order processing module of an ERP system. Lack of integration is also a problem if you need multiple reporting systems, workflow systems and security systems that all require different setup and maintenance. The lack of integration is addressed by some ERP vendors such as NetSuite, which have built CRM into the fabric of their solutions. Others provide links to the more popular CRM systems.

Users’ reluctance to use CRM can’t be fixed by technology, no matter how easy or intuitive the system. The problem is, many users don’t want to spend time updating their CRM systems when they are judged and evaluated on other activities. As well, CRM can diminish the importance of certain people who use their knowledge as a source of power.

As with all our surveys, we were unable to validate the information supplied to us by the vendors. We don’t think there will be that many intentional mistakes, partly because the vendors will lose credibility if they are caught making false claims.