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At Your Service

March 7, 2003 By

Like many local governments, New York City's budget is a mess. Most departments made significant cuts, and many IT projects are at a standstill. But one IT initiative continues to move forward with the full blessing of Mayor Michael Bloomberg.

The city is replacing nearly 40 call centers with a new 311 phone system that will provide a single point of contact for any city service citizens require. The estimated cost for the new system is as high as $90 million, making it one of the most expensive ? and comprehensive ? 311 projects undertaken at the state and local level.

The 311 system is powered by customer relationship management (CRM) technology, which involves a host of software tools and IT infrastructures that help government reorganize its services around citizen needs. CRM does this by allowing citizens to contact government through a variety of channels ? including the phone and via the Web ? and to receive responses either live or electronically.

The private sector has used CRM for nearly a decade; when implemented successfully, it transforms how customers interact with a business or retailer and how that business responds to customer needs. The results can be significant. Not only does customer service improve, but CRM also increases worker productivity and decreases customer-service costs, sometimes dramatically.

Now government hopes CRM will have the same impact: transforming citizen service from an antiquated, less than stellar operation ? where one size fits all ? into a cost-effective service tailored to meet unique needs of different customers.

When New York City announced plans to overhaul its phone system, Bloomberg addressed that hope. "By introducing the 311 phone system, the city will end the frustrating bureaucracy New Yorkers encounter when they need help," he said. "I am confident the new 311 system will vastly improve the way that New York City government functions."

Popularity Picks Up

New York City is not alone in pushing forward with a CRM solution in the face of budget shortfalls. A growing number of state and local governments see CRM as a solution with a double advantage: boosting service delivery while trimming costs.

"We're seeing more activity now compared to last year," said Graeme Somerville, vice president for sales and marketing at Knexa Solutions Inc., whose SuiteResponse CRM product has been deployed in a number of local governments and municipal utilities. While the present fiscal climate has put a number of projects on the shelf, Somerville sees enough activity to indicate state and local governments remain strongly interested in pursuing various types of CRM solutions.

The public sector is interested in CRM for a number of reasons, according to Craig Cornelius, a partner in the U.S. government practice of Accenture, a technology consulting firm involved in public-sector CRM projects worldwide.

He cited government's growing recognition that citizens are customers; that equal access to phone, Internet and in-person services for citizens is mandated; and that the desire to reduce service-delivery costs through technology solutions has been strengthened in today's weak economy.

One of the biggest drivers for CRM is that the technology is better than ever.

"CRM is evolving much faster in government than it did in the private sector because of the technology," he said. Ten years ago, CRM consisted of a series of "point" solutions for sales force automation, field service support and call centers.

"But it was hard to integrate all of those applications with other relevant products and end up with a multichannel solution," Cornelius said. "Now, all that's been done, and it's available for the public sector."

As an example, Cornelius pointed to the alliance Accenture forged with Siebel Systems to use Seibel's CRM software in Accenture's public-sector projects. In state government, CRM has been used by revenue, professional licensing, the DMV and unemployment agencies.

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