CRM stands for Customer Relationship Management. Some companies recently have expanded this concept to Contact Relationship Management, concentrating on one database and one system the routines to manage the contact with all people and companies that interact with a business, such as customers, vendors, employees, etc.
CRM is a customer-centric business strategy with the goal of maximizing profitability, revenue, and customer satisfaction.  Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation.

Technology to support CRM initiatives must be integrated as part of an overall customer-centric strategy. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy.
ERP Solutions such as SAP Business One and Microsoft Dynamics NAV, unlike the common “Accounting Systems”, have CRM as an integrated module inside the whole solution.
The software piece, however, must be part of an orchestrated effort from the company in order to accomplish an effective and constant improvement in the contact with customers and new leads and new business generation.
To roll out an effective CRM plan, the company must put together some important pieces:

• Customer facing Operations - The people and the technology support of processes that affect a customer's experience at the frontline interface between the customer and the organization. This can include face to face, phone, IM, chat, email, web and combinations of all medium.
  
  
• Internal Collaborative Functions - The people and technology support of processes at the policy and back office which ultimately affect the activities of the Customer Facing Operations concerning the building and maintaining of customer relationships.
  
  
• External Collaboration functions - The people and technology support of processes supporting an organization and its cultivation of customer relationships that are affected by the organization's own relationship with suppliers/vendors and retail outlets/distributors. Some would also include industry cooperative networks, e.g. lobbying groups, trade associations.
  
  
• Customer Advocates and Experienced Designers - Creative designers of customer experience that meet customer relationship goals.
  
  
• Performance Management and Marketing Analysis - Design and collect metrics and data so as to design marketing campaigns, call campaigns, Web strategy, and determine if CRM strategy is working in delivering ultimate outcomes: market share, customers, revenue, profitability, intellectual property concerning customers preferences.
  
  
• Customer and Employee Surveys and Analysis to see how the customer would hear it.

Technology considerations
The technology requirements of a CRM strategy must be guided by an overall view of who is the customer and what value they are to get from engaging with the organization.
The basic elements are:

• A database for customer lifecycle (time series) information
• Translating customer needs and profitability projection into game plans for different segments of customers, captured by customer interactions (Human, automated or combinations of both) into software that tracks whether that game plan is followed or not, and whether the desired outcomes are obtained.
• Numbers and description of whether goals were met and models of customer segments and game plans worked as hypothesized.
• Practice, Practice, Practice = Training and improving processes and technology to get closer to desired results. It is a complex system. Practice is required. No one gets it right first time.
• Analytical and quality monitoring CRM using voice recognition, video pattern matching, statistical analysis, activity-based costing to ultimately determine profitability of customer relationship policies and activities over the lifecycle of each customer segment.

Each of these can be implemented in a basic manner or fully orchestrated.

Operational CRM

Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database when necessary.
One of the main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to describe the history of their interaction each time.
Consequently, many call centers use some kind of CRM software to support their call center agents.
Operational CRM processes customer data for a variety of purposes:
         - Managing Campaigns

• - Enterprise Marketing Automation
• - Sales Force Automation 

Collaborative CRM
The function of the Customer Interaction System or Collaborative Customer Relationship Management is to coordinate the multi-channel service and support given to the customer by providing the infrastructure for responsive and effective support to customer issues, questions, complaints, etc.

Collaborative CRM aims to get various departments within a business, such as sales, technical support and marketing, to share the useful information that they collect from interactions with customers. Feedback from a technical support center, for example, could be used to inform marketing staffers about specific services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected from all departments to improve the quality of customer service.

Strategy

Several commercial CRM software packages are available which vary in their approach to CRM. However, as mentioned above, CRM is not just a technology, but rather a comprehensive customer-centric approach to an organization's philosophy in dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology, towards the broader organizational requirements.

The objectives of a CRM strategy must consider a company’s specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention, improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customers.
CRM strategies can vary in size, complexity and scope. Some companies consider a CRM strategy to only focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages that are available provide features that serve sales, marketing, event management, project management and finance.

Success

While there are numerous reports of "failed" implementations of various types of CRM projects, these are often the result of unrealistic high expectations and exaggerated claims by CRM vendors.
Many of these "failures" are also related to data quality and availability. Data cleaning is a major issue. If the company CRM strategy is to track life-cycle revenues, costs, margins and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases, including sales, manufacturing, supply chain, logistics, finance, service, etc.), requiring an integrated, comprehensive business processing system to be in place with defined structures and data quality. If not, interfaces must be developed and implemented to extract data from different systems. This creates a demand far beyond customer satisfaction to understand the full business-to-business relationship. For this reason, CRM is more than a sales or customer interaction system.

The experience from many companies is that a clear CRM requirement with regard to reports (e.g., input and output requirements) is of vital importance before starting any implementation. With a proper demand specification, a great deal of time and money can be saved based on realistic expectations of systems capability. A well operating CRM system can be an extremely powerful tool for management and customer strategies.

Privacy and data security

One of the primary functions of CRM software is to collect information about customers. When gathering data as part of a CRM solution, a company must consider customer privacy and data security with respect to legal and cultural environments. Some customers prefer assurance that their data is not shared with third parties without their consent and that it cannot be illicitly accessed by third parties.

Customers can benefit from their data being utilized within a CRM system. For example, while an increase in unsolicited telemarketing calls is generally resented by customers, a small number of relevant offers may be appreciated. CRM software can enhance the collection and analysis of customer behavior data, leading to more relevant communications with customers.