8/7/2019 CRM Definition

1/3

CRM Definition

Customer Relationship Management (CRM) is an information industry term for

methodologies, software, and usually Internet capabilities that help an enterprise

manage customer relationships in an organized and efficient manner. In many

cases, an enterprise builds a database about its customers. This database

describes relationships in sufficient detail so that management, salespeople, and

customer service reps can access information; match customer needs with

product plans and offerings; remind customers of service requirements; know

what other products a customer had purchased; etc.

There are three parts of application architecture of CRM.

1. Operational CRM

Operational CRM means supporting the so-called "front office" business

processes, which include customer contact (sales, marketing and service). Tasks

resulting from these processes are forwarded to employees responsible for them,

as well as the information necessary for carrying out the tasks and interfaces to

back-end applications are being provided and activities with customers are being

documented for further reference.

2. Analytical CRM

In analytical CRM, data gathered within operational CRM are analyzed to segmentcustomers or to identify cross- and up-selling potential. Data collection and

analysis is viewed as a continuing and iterative process. Ideally, business

decisions are refined over time, based on feedback from earlier analysis and

decisions. Business Intelligence offers some more functionality as separate

application software.

3. Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels

(personal, letter, fax, phone, web, e-mail) and supports co-ordination of employeeteams and channels. It is a solution that brings people, processes and data

together so companies can better serve and retain their customers. The

data/activities can be structured, unstructured, conversational, and/or

transactional in nature.

Collaborative CRM provides the following benefits:

8/7/2019 CRM Definition

2/3

o Enables efficient productive customer interactions across all communications

channels.

o Enables web collaboration to reduce customer service costs.

o Integrates call centers enabling multi-channel personal customer interaction.

o Integrates view of the customer while interaction at the transaction level.

supply chain management (SCM)

Definition

Management of material and information flow in a supply chain to provide the

highest degree of customer satisfaction at the lowest possible cost. SCM

requirescommitment of supply chain partners to work closely to

coordinate order generation, order taking, and order fulfillment thus, creating an

'extended enterprise' spreadingfar beyond the producer's location.

Supply chain management flows can be divided into three main flows:

o The product flow

o The information flow

o The finances flow

The product flow includes the movement of goods from a supplier to a customer, as wellas any customer returns or service needs. The information flow involves transmittingorders and updating the status of delivery. The financial flow consists of credit terms,payment schedules, and consignment and title ownership arrangements. There are twomain types of SCM software: planning applications and execution applications. Planningapplications use advanced algorithms to determine the best way to fill an order.Execution applications track the physical status of goods, the management of materials,

and financial information involving all parties.

An enterprise resource planning (ERP) system is an integrated computer-based

application used to manage internal and external resources, including tangible assets,

financial resources, materials, and human resources. Its purpose is to facilitate the flow

of information between all business functions inside the boundaries of the organization

8/7/2019 CRM Definition

3/3

and manage the connections to outside stakeholders. Built on a centralized database

and normally utilizing a common computing platform, ERP systems consolidate all

business operations into a uniform and enterprise-wide system environment. [1]

An ERP system can either reside on a centralized server or be distributed across

modular hardware and software units that provide "services" and communicate on

a local area network. The distributed design allows a business to assemble modules

from different vendors without the need for the placement of multiple copies of complex

and expensive computer systems in areas which will not use their full capacity. [2]