Eye on the States

CRM Gets New Spin In Public Sector

Thomas Davies

By Thomas Davies

Customer relationship management finally is getting the attention it deserves in the public sector. Companies such as Siebel Systems Inc., San Mateo, Calif., and Affiliated Computer Services, Dallas, are bringing to market promising CRM solutions for state and local governments.

Integrators are entering into teaming relationships to deliver the goods. After many false starts, and lengthy delays because of the year 2000 computer glitch, it looks as if the state and local CRM market is gaining real traction.

Some would say it is about time. The groundwork for CRM in the public sector was laid with reinvention initiatives that began in state and local government more than 10 years ago.

One extremely compelling idea behind reinvention was changing government to become more customer focused. This may have been the essence of reinvention ? to treat the citizen as a customer and become more responsive to individual needs. In this regard, government was mirroring popular management trends in the commercial market that called for mass customization and one-to-one marketing.

Initially, very few appreciated what was required to treat citizens as individual customers. Many top state and local officials focused initially on changing the culture of government. They introduced a new lexicon that referred to citizens as customers, rewrote regulations to become customer focused, conducted widespread training to instill new attitudes in management and front-line workers and widely transferred best practices across the country.

But as time went on, it became clear that reinvention was falling short of its goal. The capability to empower front-line workers was missing. They did not have the tools necessary to put into operation the lofty ideals behind reinvention.

Most importantly, the front line did not have timely access to a holistic view of the citizen and his or her dealings with government. Each interaction with a citizen was a one-time event, with no ability to link interactions across time, programs and agencies. The left hand simply did not know what the right hand was doing.

A unified, integrated view of all interactions ? phone calls, e-mails, letters ? between citizens and their government is the critical linchpin of reinvention. You cannot treat citizens as customers if those delivering the services do not have the tools and information to do their jobs.

In the absence of such capabilities, government workers could not walk the walk of treating citizens as customers. Appealing concepts like one-stop shopping and customer-friendly service couldn't be achieved without significant investments in CRM skills and competencies.

Some companies thought they were picking low-hanging fruit. With a flurry of promotions, they announced they had transferred their commercial CRM solutions to the public sector. But they soon realized there was more to public-sector CRM than meets the eye.

These early entrants to the market found what many companies selling enterprise resource planning systems to state and local governments had discovered: namely, cross-selling solutions from the commercial market to state and local one often is easier said than done. They needed dedicated public-sector sales and marketing organizations, staffed with executives steeped in first-hand knowledge of state and local governments, if they were going to be successful.

Other companies, often with more experience in the public sector, realized CRM was not the same as citizen relationship management. And while citizens often wish to be treated as customers, at the same time they have concerns about government having access to sensitive information about them. As a result, these companies have started bringing solutions that are more responsive to the differences between government and commercial CRM.

The state and local CRM market is in its infancy, and there won't be a quick fix for what the public sector needs any time soon. Government business processes, information management policies and work-flow practices must be re-examined. In programs such as social services and job placement, this will require a lot of federal, state and local collaboration.

Nor will there be a one-size-fits-all solution to states' needs. The largest jurisdictions likely will design customized, enterprisewide CRM solutions. These will be complex and costly and will take years to implement.

Others will take advantage of the emerging application service provider model. This approach will become especially attractive to small- and medium-size local governments.

Regardless of which solution state and local governments adopt, CRM is a very large and important part of their future. For many, it will be a turning point in their ongoing journey to rebuild citizen faith in government.

Thomas Davies is senior vice president at Current Analysis, a next-generation business intelligence and analysis company in Sterling, Va. His e-mail address is tdavies@currentanalysis.com.

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