Nazish -
The steps are pretty simple.
1. Set all users to E-mail access type - Incoming and E-mail access type - Outgoing to "E-mail Router"
2. Set up and configure the CRM e-mail router.
To understand how to configure the e-mail router you can look at the "Microsoft Dynamics CRM: How to configure the On-premise and Online E-mail Router in different deployment scenarios" document.
http://www.microsoft.com/DOWNLOADS/details.aspx?FamilyID=8ea05b4e-825a-4db1-ad59-d894aa5ef33e&displaylang=enHope that gets you started.
Later
Hoss