The customer relationship management (CRM) industry is undergoing a transformation with the advent of AI. What was once a digital filing system for sales and service is now evolving into a productivity engine fueled by AI.
With businesses across sectors relying on CRMs to manage their customer lifecycles, the debate has shifted to whether traditional CRMs can survive in an AI-driven era, or must they be rebuilt as AI-native systems to stay relevant?
To unpack this shift, AIM spoke with Pankaj Goel, CTO of LeadSquared, who shared how AI is reshaping CRM capabilities. Complementing this, Prashanth Krishnaswami, global head of strategy and thought leadership for CX at Zoho, offered an industry-wide perspective.
Process Managers to Productivity Engines
Goel believes the CRM’s role has changed dramatically. “Typically, CRM was more about managing your business processes, whether sales or service. But this is now slowly evolving into a productivity tool.”
The shift, in his view, requires AI not as an add-on, but as the foundation: “You need to be very AI-native. If it is developed as an afterthought, the value will be very limited.”
This is already visible in LeadSquared’s roadmap. AI is being embedded into every workflow, from lead scoring to customer service. By predicting lead propensity, CRMs can direct sales teams towards the most convertible prospects, improving conversion rates. In service, conversational bots and agent co-pilots are helping resolve tickets faster, often automating responses to 80% of routine queries.
Goel emphasised that products failing to adapt will quickly lose relevance. “If you imagine yourself in the customer’s shoes, if you’re able to get better value at the same cost, the other product will become irrelevant,” he noted.
Traditional CRMs Will Evolve
While Goel envisions an AI-native future, Zoho’s Prashanth Krishnaswami sees traditional CRMs evolving while adopting new technologies like AI.
“The traditional notion of the CRM as being ‘built for sales teams by IT teams’ is definitely outdated today,” he said, adding, “The reality is that even an AI-first CRM is a CRM at heart. It has to cater to all the needs and use cases that exist today.”
For Zoho, the future lies in what it calls a “system of work orchestration,” where CRMs remain the central hub, aligning multiple teams and ensuring customer needs are met holistically.
Krishnaswami said that AI fits naturally into this orchestration model. By summarising feedback, prioritising actions, and maintaining compliance, AI enhances the CRM’s purpose rather than replacing it. “The fundamental purpose of a CRM doesn’t change even if it is AI-first, mobile-first or edge-first,” he explained.
This suggests that while the “traditional” tag may fade, core CRM architectures will endure. What changes is the degree of AI integration and how intelligently it is applied.
The Challenges Ahead
Both leaders acknowledged that obstacles remain before AI-native CRMs can scale. For Goel, the biggest hurdle is balancing customer data privacy with model training.
LeadSquared, which works with BFSI and healthcare clients, must keep compliance at the forefront. “One of the biggest challenges with any of these AI implementations is how we can keep data secure and compliant,” he said.
Zoho, meanwhile, pointed to the challenge of unstructured data. Much of the information businesses need to contextualise AI sits across fragmented systems, often in formats not ready for machine consumption. Unless legacy data is structured and new flows managed, AI cannot deliver its full potential.
The debate also extended to costs. Goel acknowledged that managed services like AWS Bedrock or OpenAI APIs are effective for pilots, but not always scalable in the long run. He anticipated more companies will shift to self-hosted models to balance performance and expenses.
Goel also highlighted how unifying fragmented customer interactions is central to AI’s value in CRMs. “When a [human] agent looks at a ticket, do they have context around all the interactions done before? This is where unified data and AI intelligence can provide a 360-degree view,” he explained.
By bringing together calls, emails, and past service records, AI enables agents to respond faster and more effectively, ultimately lifting customer satisfaction and productivity.
What This Means for Jobs and Skills
The rise of AI-native CRMs inevitably sparks concerns about jobs.
Goel dismissed alarmist predictions that AI will wipe out roles. “When the computer came in, the jobs didn’t go away. The nature of jobs changed,” he said.
His view is that skills will evolve, with roles such as prompt engineering or AI device management emerging as businesses adopt new systems.
Krishnaswami’s perspective aligns with this pragmatism. He stressed that while generative AI has made real-time personalisation more effective, it is an evolution, not a revolution. CRMs still need human oversight to ensure alignment across customer-facing teams.
A Future of Convergence
The CRM debate is not binary. AI-native CRMs are not about replacing traditional ones but reimagining them. As Goel put it, AI must become the “backbone” of CRM, driving productivity and customer value. Zoho’s framing of CRMs as orchestration systems reinforces the idea that while architectures endure, their intelligence must deepen.
The next decade of CRM evolution will therefore be about convergence where embedding AI will help transform outcomes, while retaining the structures that keep businesses aligned to customer needs.
Traditional CRMs will not disappear, but those that fail to become AI-native may find themselves rendered irrelevant.
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