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CRM technology explained

Can you please explain the differences I should look for between traditional database-centric CRM systems from SAP, Oracle, Siebel and Peoplesoft, and newer, process-centric CRM systems from Pegasystems and Chordiant?

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I'm not sure the difference is all that profound, at least on one level. Of course, virtually all modern CRM systems (and other applications for that matter) run on relational databases, that's not the issue. What I think the question is getting at is what does one do with the data once it has been captured. Early CRM systems focused on transactions, primarily sales or service transactions, and it was vital to the success of the user to have relevant data about the customer and situation to correctly process the transaction. Then came the Internet.

When the Internet became part of the picture, CRM began to disintermediate. Essentially that meant that non-human representation of companies through the Web site, automated calling systems, and e-mail response systems (to name a few) began to take over some of the CRM functions that were previously performed by expensive employees. An employee is a wonderful thing; though they are expensive they know how to think and if they are trained they carry around in their heads the business rules and procedures (processes) they need to use in conjunction with the data that CRM systems store to provide customer service or to successfully conclude sales transactions.

When the Internet began making itself felt in business, many organizations figured they could replace some of their expensive employees with websites and the like. What many didn't realize was that customers didn't carry around in their heads the processes and rules that employees did and business didn't always go so well as a result. Companies like Chordiant saw this kind of thing coming and architected solutions that incorporated workflow and rules processing to replace some human thinking. Moreover they built their solutions in modular architectures such as Java/J2EE to make it easy for business users to modify the rules and procedures without doing brain surgery on the source code. Such applications are very much at home in the disintermediated environment of the Web while still offering plenty of support to those smart (but expensive) humans that use the systems.

This was first published in July 2002

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