What exactly does a CRM do?

A CRM is essentially about customers, from the business's perspective. So what does a business wants to do with its customers?

First of all it wants to store their information together with their history of interactions with the business. Obviously it would categorize and produce reports of them based on various factors of
those interactions. This information would be used to identify new potentials for the business and where the business is failing.

Secondly they want to organize promotional events and track them by various aspects. These could target existing customers and new customers.

Thirdly they would want to have a loyalty program for their customers, which would encourage them to do more business with them, and attract new customers.

Each of these requirements has to be further dissected as they represent really complex business requirements as vague expressions. Then the software requirements would be extracted from those business requirements.

A commercial product that is built to address these requirements should be highly scalable, extensible, configurable, interoperable, platform independent and highly available. As the potential customers could be of various sizes of organizations both geographically and
operationally (Be warned - We are talking about customers who has thousands of access points spread over dozens of countries! - I'm talking for real, this is really an global enterprise system we are talking about here), requiring rigorously customized functionality from the system, who use all types of hardware and software solutions from other vendors and require the system to integrate with them.

That leads us to find out what are the industry accepted standards for CRM software. But the fact that a CRM software could be used in many industries and those industries could most probably have separate standards (and for the fact that I'm interested in only one industry
right now) requires us to narrow down our CRM to a single industry: Retail.

IXRetail and Microsoft's .NET Connected are two such standards. But on my personal preference of approach, before going in to details of those standards, I would continue to work on clarifying the business requirements with just a little bit of an idea for what those
standards are. At this point all that matters is the knowledge of requiring adhering to some standards. Where they are required is still to be realized.