CRM Software Resource Guide - An Introducion to CRM

An Introduction of CRM
What is CRM?
The Benefits of CRM
Vendor Listings
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CRM: An Introduction

Customer Relationship Management (CRM) is a software package that enables organizations to better serve its customers. Its focus is service, information gathering and processing. It integrates and automates the information needs of the entire organization, especially customer service .

Integrated CRM software is known as a " front office solution" because it deals with the customer face-to-face. When a customer calls, the customer service function automates service requests, complaints, product returns, information requests and sales. By serving the customer quickly and efficiently, while all of the customer's information is at your fingertips, CRM software enhances customer service and, by extension, the company and its bottom-line.

It is clear that the future belongs to CRM. Seeing the writing on the wall, companies are turning to customer-relationship management systems and strategies to gain a better understanding of their customer's wants and needs. Used in association with data warehousing, data mining, call centers and other intelligence-based applications, CRM allows companies to gather and access information about customers' buying histories and other data to better anticipate what customers will want.

Notice CRM's versatility: while performing customer-service functions, you are building customer loyalty by treating them to superior service.

A couple of trends have brought CRM to the forefront. As products have become harder to differentiate, companies have moved from a product-centric to a customer-centric focus. However, becoming customer-centric is not easy and requires a significant investment in enhancing a company's ability to turn this process around ¾ on all levels, to include employees and partners as well. Therefore, an effective CRM strategy must deliver more than just robust technology. It should also deliver methodologies and best practices that companies can apply to specific situations to achieve a high ROI.

However, some solutions can take months or years to implement completely. The cost might also run into the millions, depending on the size of your company(s).

CRM software also has its critics who feel that it invades customer privacy and encourages aggressive sales tactics due to the information companies now have on you (see persuasion technology). But it is not its fault that CRM is versatile: it can and does gather new data, but its most important contribution to the business world is that it is designed to leverage that data and make it work for you.

It is important to understand what CRM does and how it fundamentally transforms an organization. CRM enables an organization to build better, more predictable, higher-value, and longer-term customer relationships.

Usually a move to CRM is in response to a variety of internal and external organizational pressures called business drivers, which create a need for change. Examples of key business drivers include customers, competition, operational pressures, business partners, suppliers, financial pressures, economic conditions, and government or industry regulation. Changing from a product-centric focus to a customer-centric focus in light of these drivers requires an organization to formulate new goals, strategies, and tactics.

The Future of CRM

AMR Research expects the CRM market to grow to more than $20 billion by 2004, making it as large as the ERP market. IDC reports the CRM segment is expected to grow at a compound annual growth rate of 29% through 2004. Also, the demand for CRM solutions among mid-market companies will result in a market uplift for implementation services continuing through 2004. Key growth drivers will include a stronger focus on CRM business processes and front-to-back office integration.

CRM vendors pay varying degrees of attention to usability, integration, and privacy concerns. It being widely acknowledged that it is impossible for one vendor to fulfill all three. Therefore, it seems unlikely that any one vendor can dominate in the near term.