CDI complements and extends CRM.

There is considerable confusion over the differences between CRM and CDI, where one picks up and the other leaves off. Defining terms is crucial to the discussion. If you Google "definition of CRM" you get over 11,000 hits, many by vendors trying to shape the discussion to reflect the features and functions of their software. Siebel Systems is widely considered to be the pioneer that brought CRM software to market, and their definition is as follows:

CRM is an integrated approach to identifying, acquiring, and retaining customers. By enabling organizations to manage and coordinate customer interactions across multiple channels, departments, lines of business, and geographies, CRM helps organizations maximize the value of every customer interaction and drive superior corporate performance.

That's a pretty good starting point, because it focuses on the critical core functionality of any CRM system: managing customer interactions.

When CRM was introduced, the vision was a central storehouse of customer information that logged every transaction, compiled every piece of data, and presented it to front office applications and customer-facing staff at exactly the right time. And, if CRM had been the first application installed, with every subsequent application linked in to it, this vision would have been realized. In practice, however, most companies have many systems - sometimes thousands - that house different pieces of customer data. Each application was designed to store the information it needs to perform its function, in effect acting as its own "customer master" for the data it needs.

This creates a whole series of cascading problems. Customer records in different systems are not often linked, and thus creating a "single view of the customer" is difficult. Crucial data like addresses are stored in multiple places, and often differ from one system to another. Changes to data like phone numbers or maiden-to-married name can be picked up by some systems but not others, creating further mismatches. Enter CDI.

Customer Data Integration (CDI) technology aims to create, maintain and distribute the single, referential master customer record. CDI functions as a kind of referee between all the potential sources of customer data, deciding which customer is which (is J. Brown the same as John Brown the same as John H Brown, Jr.?), managing conflict between the various data points in each customer record, creating an administrative environment for human interaction in the process (data stewardship) and running the necessary synchronization processes to ensure that the correct data is reflected in each of the target systems.

Thus CRM is simply another system that needs to be kept in synch with the customer master record in CDI.

It seems simple enough, but the problem is one of scope creep. Today, most organizations understand the need for global visibility of the customer record. In recognition of this fact, the definition of CRM has expanded to include some elements of CDI. You can see this reflected in this extract from the CRM entry in the Wikipedia:

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.

Adding to the confusion, the advent of web services in CRM has exposed programmatic links into CRM systems that allow the data to be easily consumed by other systems. Similarly, inbound transactions which affect the customer record can be logged in the CRM system. Thus we see traditional CRM systems maturing and offer more integration features, which is wonderful from the perspective of executing CDI, but which also adds to the confusion due to some functional overlap.

In practice, we see some major differences in how CRM and CDI systems are deployed and how they manifest in the business environment. CRM systems are typically the core applications behind call centers, sales force automation (SFA) systems, and enterprise marketing applications. Customer-facing employees are users of the CRM system and interact it with it daily. CDI, on the other hand, typically operates in the background. The only users who interact with the system directly are typically data stewards, the arbiters of disputes between conflicting data who decide which information gets written to the master record. Many customer-facing employees benefit from CDI, as it is the system which ensures that their customer data is complete and accurate, but few interact with the CDI system directly.

Finally, there is a considerable difference in the data which is stored in the two systems. CRM systems are focused on managing customer interactions, so all the data from previous customer interactions is stored there. This might include service requests, inquiries, sales and marketing pitches, call notes, documentation, as well as relationship data, preferences, demographics and other relevant data. CDI systems are typically narrower in focus, aimed at ensuring that customers can be accurately identified and contacted, and recognized as customers for all the various products the company offers. CDI systems are typically optimized for rapid query and response, and the data records tend to be smaller as a result.

CRM software got, in my opinion, a bit of a bum rap in the market due to incorrect expectations. Many companies bought CRM when what they wanted was CDI. CRM without CDI is still highly valuable, and many companies have reaped exceptional rewards from intelligent use of CRM technology. Today, however, when the pressure is on for operational efficiency, erroneous customer data is a primary source of errors in the back office and the problem has to be addressed directly. Moreover, as competitive pressures have mounted -- the opposition is gaining in operational efficiency as well - the need to offer exceptional customer service to prevent customer churn and the need to effectively cross-sell and upsell customers across the full range of products has never been greater. For the vast majority of mid-to-large sized companies, that means that both CRM and CDI are on the strategic roadmap.


Update 8-18-05: Aaron Zornes of the The CDI Institute takes a stab at answering this question.