Terminologies in information technology tend to put off most people -- ERP, Y2K, data warehousing. What next? It has to be CRM, expanded customer relationship management.

What does CRM do?

For that, we have to go one step back and look at what ERP does. ERP, or Enterprise Resources Planning, integrates and streamlines different business processes, provides a seamless flow of information internally and externally and helps companies plan, monitor and control all business processes. ERP looked basically inward out, starting from the inside of the organisation. But now the company has to look downstream, at the customer, and try to integrate him/her into its processes. What is essentially customer relationship now assumes a new dimension because of the immense possibilities. Besides, there is limited competitive advantage to be had if a company has implemented ERP solutions, because its competitor may well have done so too.

Customer Relationship Management packages automate and integrate all the customer-related activities like marketing, sales and service activities of a company. Each customer record is maintained in a database. This integrated database will give a one-shot picture of the customer. It can record transactions with a customer interactively, over the telephone or the web and give customised service. It essentially helps in reducing the time and effort in marketing and gives a comprehensive picture of a customer. In future, it can even customise the web interface and the advertising on the website can be oriented specifically to the customer who has logged on to a website, based on his preferences, which are recorded in the database.

In India, these packages would seem to be more relevant in the service industry since the manufacturing industry is not yet tuned to making customised products on demand. For example, Oracle's CRM package is aimed at the financial sector. It is actually not a new product. It was built out of a core model of a salesforce automation package and similar modular packages for various functions are available in the market.

CRM has become 'top of the mind', but then whether it rules the mind and the market will be a matter of time.