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The customer is king when it comes to innovation, but customer relationship management (CRM) software has remained a lowly handmaiden.

Until now. A new crop of CRM software makes it clear that IT has a critical role in creating the positive customer experiences that are key to corporate innovation efforts. In addition, the right CRM implemented the right way provides insights about customer spending and shopping habits that can be mined and converted into strong new products or services.

CRM software is slimming down and ditching the weighty moniker of "enterprise CRM." Companies such as SAP and Oracle/Siebel are simplifying their formerly expansive offerings. Microsoft Dynamics CRM and Salesforce.com, once targeted solely at midsize companies, are beefing up with added features and integration capabilities.

What's more, a host of creative newcomers are whittling away at the obstacles that slowed user adoption. InvisibleCRM, for example, lets sales and marketing professionals use stalwart desktop tools — and have CRM, too. InvisibleCRM automatically ferries e-mails and other information entered into Microsoft Office and Outlook directly to Salesforce.com. Therefore, employees enter data into the CRM application without using another application or even knowing they’ve contributed to a CRM database.

The new wave of ideas for linking marketing and sales is inspiring once reticent enterprise IT departments to take another look at CRM. Chicago-based Savo Group makes software that automates the delivery of tailored customer messages by connecting the sales department to marketing’s tools. "It enables a software salesperson to say, 'I'm in a deal for 500 seats; what PowerPoint slides do I need?'" says Rebecca Wettemann, vice president of Nucleus Research in Wellesley, Mass., a highly regarded consulting and analytics firm that specializes in increasing the value of CRM. "Marketing can see exactly what sales needs."

Wettemann calls the trend toward simpler features "the Googlization” of CRM. “We've seen a lot of strides to make CRM more intuitive and easier to use," she says. "Being able to mouse over and see what's under a field, for example."

Still, high failure rates persist, according to AMR, a Boston research firm that recently surveyed 200 organizations that implemented CRM. For one thing, unrealistic expectations continue to trip up many CRM installations. "It's one of the trickier implementations, and some companies still go in expecting to see a big revenue bang," says AMR research director Rob Bois. "That's been proven not to work."

For another, companies need to budget for considerable coaching time, which is often necessary to coax sales and marketing professionals to new tools.

An important contributing factor is that too few companies assign IT a lead role in the process of creating a positive customer experience. Forrester Research found 60 percent of executives polled cited "implementing technology" as the second biggest obstacle to successful customer strategies, yet few had IT representatives at the table during the implementation planning of a customer-facing technology.

To stay in the mix, suggests Forrester, IT needs to advocate to become part of the process of formulating customer strategy, and deepen its functional and business process understanding. Further, with the growing importance of packaged applications versus in-house-developed solutions for customer interaction, IT needs to keep abreast of the market's most-current solutions.

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