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Providing high-quality service to customers is a major goal of any business — and therefore a high priority for IT, which must deliver the technology tools to enhance customers’ experiences and make it easier for them to conduct transactions.

For years, customer relationship management (CRM) applications have been helping companies better serve their customers by gathering and analyzing data about customer actions, preferences, complaints, etc. The CRM applications market, now more than a decade old, is dealing with several key trends, according to Mary Wardley, research vice president, CRM applications, at IDC. These include a need to upgrade or replace aging systems, the integration of CRM with other business applications, and an expanded Web presence for CRM.

CRM applications, both commercial and home-grown, have found their way into many organizations. They can be used by customer-facing operations such as sales, marketing and customer support to provide staffers with relevant information when interacting with customers.

Among the benefits of the technology is that it enables people who come in contact with customers to serve them more quickly and effectively. Customers don’t need to rehash the history of past transactions each time they call, and staffers can have a good understanding of the customers’ needs without having to ask a lot of questions.

Another key benefit of CRM is that it can give organizations an opportunity to boost revenue. By analyzing customer data stored in a database or larger data warehouse, businesses can design and launch more-effective marketing campaigns aimed at either large groups of customers or individuals. They can cross-sell products and services based on knowledge of the customer’s needs and interests. The analysis of customer data can also help businesses make decisions on new-product development and pricing.

But for many organizations it might be time to update CRM. “It's hard to imagine that the CRM applications market is more than 10 years old. eCommerce systems from the late ’90s, call center systems and homegrown applications that were put in place to deal with the demand of the dot-com boom are not able to handle the degree of traffic, scale or stress that dependency on the online world brings,” says Wardley. “Customers expect a consistent experience between their in-person and online interactions. Rebuilds are now the top priority to make this a reality.”

There’s also a need to integrate CRM with other applications. “The isolation of the various parts of the CRM process — marketing, sales and service — can no longer exist,” Wardley says. “Customers don't want to deal with the results of systems that are clearly not integrated. At minimum, linking the customer-facing components with the back-office information held in accounting systems, order tracking [and] inventory systems, coupled with the analysis of customer buying behavior and segmentation, can begin to reduce [annoyance to] the customer.”

Yet another development is the use of CRM in combination with an expanded Web presence. “The possibilities that the Web gives to organizations expand every day,” Wardley says. “Not only are the technologies and the tools significantly more sophisticated and compelling today, but the Web itself is creating new forms of interaction that can be harnessed by savvy organizations.”

The rapid growth of social networking is creating unparalleled opportunities to understand customers, their behaviors and their preferences, Wardley says. “While in the early development of being harnessed by CRM systems, access to social networks [brings] a new opportunity for organizations to create or participate in communities that are not just limited to their products, but bring a richer environment to the consumer while bringing insight to participating organizations,” she says.

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