CRM Software: The Technology Behind the Tool

For those of us who use Customer Relationship Management (CRM) applications on a regular basis, they add immeasurable value to our productivity. We talk to so many people over the phone, email, text, Twitter and Facebook that it’s impossible to remember who said what and when they said it, but CRM software helps us manage the communication. We take this modern software marvel for granted, but deep in the core of CRM, you can find some major innovation and stunning technology.

The Inner Core

At the core of a CRM system is a Database (DB). Think of a huge spreadsheet with items like name, address, city, state, zip, email and notes. Now take that concept and feed it steroids. Boom! You have a DB. The DB at the core of a CRM system stores information and connects data relationships.

When you know person A works for company B, and person C used to work for company B but now works at company D, the DB deep inside the CRM system keeps track of this information for you. However, a CRM solution’s performance is only as good as the data it’s given; you should always make sure you feed your system the best data possible.

Do you remember life without CRM systems? I do, but barely. I remember Rolodex card files with people’s information written out and tiny handwritten notes covering the last thing you asked them. I remember people carrying around a “little black book.” I remember Franklin Covey®-branded PalmPilot™ devices helping to keep your contacts organized, and I remember very early incarnations of CRM systems that used one big text file instead of a DB. I can wax nostalgic about the way “things used to be,” but in reality, having a DB at the core of everything beats a paper Rolodex file any day of the week.

The Middle Layer

The DB is very good at its job, but not so smart when it comes to making decisions about the data entered. Another layer, the Business Logic Layer (BLL), handles this function. You can think of the BLL as a very smart butler, making decisions, running errands, and getting things done, all using the data in the DB.

As an example, let’s say we have a business rule that says, “for every contact in my CRM system who has a birthday, send me an email reminding me to send them a birthday card when their birthday is a week away.”

First, you need to have the contact’s email address in the CRM’s DB, and the BLL needs to know what to do with that information. Luckily, you only have to tell the BLL to do something once, and it will do it over and over. So the BLL wakes up and says “Hey, John Smith’s birthday is next week. I need to email my owner and tell him to send John Smith a card.”

A very simple example, yes, but it illustrates what the BLL does and how it works. You build business logic or business rules for your CRM system to follow, and it follows those rules. I have seen companies running almost completely on business rules, handling everything from bank drafts to commercial printing operations, so your BLL can get as complex as you want it to be.

The Top Layer

At the top layer of a CRM system lies the part you’re most likely to recognize: the Presentation Layer (PL). The PL consists of the screens and fields you view and fill out. The PL is connected to the DB via the BLL. In this way, you can build in business rules for what needs to happen to the data before it makes it to the DB, and you can build in business rules for how the data is displayed as well.

The PL can make or break the usefulness of a CRM system. If it’s too simple, the user won’t get the most out of the system. If it’s too complex, the user will go back to index cards (Don’t laugh—I’ve seen it happen!). Software publishers have to strike a balance between functionality and simplicity, and a well-designed PL has two primary traits: One, the PL is not intimidating to first time users; and two, it doesn’t get in the way of power users. Finance management specialist Mint.com offers an excellent example of a well-built presentation layer.

CRM systems follow classical three-tiered architecture. Data is stored in a database; the logic, rules, and alerts stay in the business logic layer; and the presentation layer faces the user. Developing an application this way means you can make changes to the individual layers without having to rewrite the complete system from scratch.

We may take effective CRM technology for granted, but taking some time to understand how the technology “under the hood” works can give us a new appreciation for the brainpower that goes into making it, as well as a deeper understanding of its power.

Tirrell Payton is a marketer and technologist with more than 15 years of experience in the digital world, and is the VP of Analytical Marketing at Egg Marketing and Communications. He is a former executive at Accenture, a global technology and consulting firm, where he helped companies transition from “industrial speed” to “web speed.” Prior to Accenture, he worked in the digital media division of Yahoo. Tirrell combines marketing sense with technology savvy with an unwavering eye on the bottom line. He is a regular contributor to ChamberofCommerce.com, Small Business Trends, and DIYMarketing as well as his own website, SEOTirrell. Follow him on Twitter @SEOTirrell.
 
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  • Mike Richardson

    It is indeed difficult to imagine running a business today without a suitable CRM solution. This article does a great job of stating the importance of having a CRM system to leverage your business database and presents a nice model for visualising how to do that. However, CRM is more than just an interface for a database. An effective CRM solution is also a platform for customer analysis, a tool for gaining a better understanding all your customers, and a means of automating key customer-facing actions – don’t just ask for a reminder of a customer’s birthday, have an appropriate message or offer sent out automatically. The CRM system can also be linked to other databases to provide better insight and a more comprehensive view of each customer. Maximizer CRM: HubSpot Connector, for example, feeds data from different marketing streams into the CRM platform top make sure everyone has complete and up-to-date information on the contact.

    It is of course important to understand the basic process behind your CRM solution, but the crucial element that allows for simplification of your staff’s day-to-day tasks and heightened efficiency in meeting your customers’ needs is the Top Layer identified in this article: a user-friendly interface makes the information easily accessible. Variations such as availability on various mobile devices can also be a vital element as well. CRM software slices and dices huge amounts of data and an effective system delivers it in a clear way, no matter where or when you need it – not only dealing with client birthdays, but also facilitating complex business intelligence processes.

    As the needs of companies increasingly evolve, so do the options available to them when it comes to customising the software they use. CRM needs to grow along your business – and your business needs – and therefore be adaptable. Upgrading your CRM software and navigating through all the available options to find the right solution can be a daunting task. Maximizer Software’s Ensuring you CRM delivers guide is a great roadmap for anyone looking to implement a new CRM system, covering the key questions a business needs to ask itself before plumping for a platform. It can be downloaded from the Maximizer website here.

    Mike Richardson, Managing Director EMEA, Maximizer Software

  • Dan L. Hammers

    WOW!! That was really amazing knowing what runs in the background of a CRM. I use talygen CRM system on a daily basis and getting aware of the technology in depth feels great. Thanks for the tech dose.

    • http://Smallbiztechnology.com/ Ramon Ray

      It is our pleasure

      sent from my phone

      Ramon Ray
      Editor and Technology Evangelist
      Smallbiztechnology.com
      @ramonray