Oracle has updated the on-demand version of its customer relationship management software, adding additional support for social networking and collaboration.

The latest Oracle CRM On Demand – based on Siebel's software-as-a-service technology – aims to use social networking capabilities to improve employee productivity. Oracle said that its software can achieve this by tapping into the collective intelligence of networks within the organisation and externally.

"This heralds a radically new Web 2.0 approach to end-user collaboration and productivity," said Anthony Lye, Oracle's senior vice president of CRM.

Users will be able to embed Oracle CRM On Demand components in their preferred web portals – such as Google, MyYahoo or Microsoft SharePoint – which would allow them to access vital information within the context of an online system they are comfortable using.

Increasingly organisations are finding that social networking features can help drive greater understanding of their customers, noted Gartner research vice president Jeffery Mann in a recent report. By tapping into these networks, employees are "able to keep touch at a shallow level with a large group, with the option of initiating deeper, stronger contacts when necessary," he suggested.