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At Your Service

CRM gains interest as jurisdictions attempt to cost-effectively boost citizen satisfaction.

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.

Accenture already uses Siebel's software in a number of U.S. agencies, including Florida's Department of Business and Professional Regulation and Colorado's Department of Labor and Employment (see sidebar).

Knowledge Bolsters CRM
Many local governments view CRM as a tool for creating a one-stop customer service center where citizens can dial a single phone number ? whether it's 311 or 555-CITY ? to ask questions, request services, and be routed to the appropriate department for responses or to file complaints. To help city or county staff manage the wide range of queries and requests, they need a solid database of knowledge where they can find answers.

An emerging trend is the growing interdependence of knowledge management and CRM, especially for one-stop customer solutions.

"The knowledge repository is the glue that helps municipal staffs to communicate with their citizens," Somerville said. The repository, he said, becomes a resource for government staff to store a wide range of information that, when tapped, creates a meaningful interaction with citizens.

Because 60 percent of queries are informational only, governments can devise ways to direct those queries to automated ? and less expensive ? self-help responses, such as interactive voice response or Web sites, rather than use expensive labor to answer each question, Somerville said.

Customer-service labor costs become even more important when senior-level staff members are involved in handling queries. A survey by Knexa found that in some jurisdictions, senior administrative staff members spend, on average, one to two hours daily finding the status of citizen service issues and gathering necessary information to formulate a response.

Agencies lose a lot of man-hours annually "just running around trying to deal with citizen service issues," Somerville pointed out.

To craft the right response and provide valuable CRM responses, governments must do more than install software and set up call centers.

"It's important to get access to information in the back-end legacy systems in order to provide service at the point of interaction," said Accenture's Cornelius. As an example, he pointed to Michigan's Department of Treasury, for which Accenture is helping build a call center.

While the underlying Siebel technology will provide Michigan's Treasury staff with the ability to respond to queries through multiple channels, their access to discrete tax data stored on legacy mainframes makes the solution valuable to customers, Cornelius said. "That access is critical to the project's success, otherwise you are not going to be able to provide answers to customers' questions."

CRM also has taken on greater significance since 9-11. Public officials pay closer attention to how they manage and respond to public services during disasters and emergencies.

Two years ago in Toulouse, France, a factory blew up, causing extensive damage to thousands of homes and apartments, and forcing thousands of people out of work. To manage the housing and employment crisis that ensued, the Toulouse city government quickly installed Knexa's SuiteResponse and used the technology to communicate with citizens around the clock. Not only did officials provide answers, they tracked residents' most critical needs based on queries, and used resources in ways most beneficial.

Perceptions Linger
Despite growing interest in CRM, many governments still perceive the technology as too costly and primarily for private-sector consumption. In a global study of public-sector CRM by Accenture, a number of key barriers to government acceptance of CRM were identified. Besides the perception problem, challenges include lack of leadership support, inability to make a business case for investment, and that data needed for CRM to work resides in information silos.

The perception that CRM is too costly triggered development of low-cost alternatives, many of which are aimed at local government. These primarily are hosted CRM solutions that run on the Internet. For just a few hundred dollars, cities and towns can set up simple customer service Web sites where citizens can browse through lists of frequently asked questions and post queries and complaints.

Top tier CRM vendors and integrators argue governments should look first at the cost of doing business under existing circumstances, rather than focus on the price tag for a new CRM solution.

"We can't show potential customers how they can get a return on investment if they don't expend time gathering data that can be analyzed to show the flow of communication from citizen to government," Somerville said. With better baseline data, vendors and integrators can begin to show government agencies how the true cost of providing customer service under traditional means compares with CRM.

Governments will often pull out survey results that show a high percentage of citizens satisfied with city or county hall answers. What's not shown is how expensive that level of satisfaction can be. "That's great the citizens are happy," Somerville said. "But what is it costing the government to achieve such a high percentage of satisfaction? And what inefficiencies are in the system that CRM can drive out?"
With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.