The generally accepted purpose of Customer Relationship Management (CRM) is to enable organizations to better serve their customers through the introduction of reliable processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even redundantize the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy (or lack of one) oriented on customer needs. The second one is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business strategy.

Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company.

There are three parts of application architecture of CRM:

* operational - automation to the basic business processes (marketing, sales, service)
* analytical - support to analyze customer behavior, implements business intelligence alike technology
* co-operational - ensures the contact with customers (phone, email, fax, web...)

The operational part of CRM typically involves three general areas of business. They are (according to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and a Customer service and support (CSS). EMA provides information about the business environment, including competitors, industry trends, and macroenviromental variables. SFA automates some of the company's sales and sales force management functions; for example, keeping track of customer preferences, buying habits, and demographics, as well as sales staff performance. CSS automates some service requests, complaints, product returns, and information requests.

Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving you time.