The Boundaries of CRM

Defining customer relationship management (CRM) seems like an easy question on the surface; easier, for example, then trying to explain Web services. As time goes by, however, the definition of CRM is expanding past the typical conceptualizations of salesforce automation (SFA), marketing, analytics, and call centers. CRM is steadily becoming a philosophy as well as a product set, thereby encroaching on areas once considered the province of other e-business application areas.

Take, for example, two recent developments: hosted CRM specialist Salesforce.com's release of accounts receivable (AR) applications, and Oracle's debut of contract management functionality surrounding its CRM product. In both cases, say the companies, CRM as a philosophy -- putting the customer at the center of business processes -- dictated the outward expansion of functionality.

For Salesforce.com CEO Marc Benioff, it's a question of putting sales at the center of the business. His company's AR module lets salespeople view outstanding and historical invoices for each customer and present invoices online, in effect distributing a customer's AR department. "I have a contract management executive who keeps information in Excel," Benioff explains, detailing the legacy process at Salsforce.com before it used its own software. "I've got finance guys toggling between Oracle AR and Salesforce.com. All the customer information is in Salesforce.com, but the invoices are in Oracle AR." With the new functionality, Benioff says, "The whole salesforce can be an AR agency."

Salesforce.com's new e-business suite also includes contract management, a feature historically addressed by e-sourcing, not CRM, products. Just days after the debut of this feature, Oracle CRM also added contract management. Juliette Sultan, VP of CRM product strategy for Oracle, emphasizes that CRM is broader than traditionally thought.

"How you manage the relationship if you don't manage the contracts that govern the relationship?" she asks. For Oracle, the answer to this query means offering contract management functionality around sales, services, and property rights, while also offering contracts intelligence. Sultan maintains that contracts are an integral part of the sales process. "When you have visibility into the state of your contract business, you have the opportunity to cross-sell and upsell," she says.

As e-business software and technology becomes more advanced, vendors from previously separate application areas -- for instance, CRM and e-sourcing -- find themselves offering similar services. "The lines are blurring," explains Sultan. "But, if you think about what CRM means, AR and contract management should definitely be a part of it."

Demir Barlas also writes for Line56.com