At their most basic, citation management tools help you collect articles, books, webpages (and lots more) for use in research & format and create bibliographies using a particular citation style (APA, MLA, Chicago, and many more) to export into a research document. More advanced features in citation management tools allow you to:
Link to & store source materials
Insert in-text citations and bibliography entries while writing in a word processor
Create formatted Works Cited/ Reference lists/ Bibliographies