Public Sector Hopes CRM Guides Citizens to Sites

Public Sector Hopes CRM Guides Citizens to Sites

Linda Zecher

A wide variety of customer relationship management technologies are finding their way into the public sector as government officials discover the benefits of acquiring software solutions that promise better services, improved revenue and speedy contact with citizens.

Competition and customer service are driving colossal investments in customer relationship management (CRM) applications and infrastructure in the commercial sector, while the growth in electronic government initiatives is fueling public-sector CRM projects.

There is a growing consensus that CRM can play a major role in the government's drive to achieve self-service for its customers, citizens and other agencies. Governments and agencies are showing increased interest in the notion of one-stop government, and are devising systems that free up calls to their 911 systems, industry and government officials said. Public-sector interest will only grow as the government's CRM focus becomes having more workers trained to answer inquiries on the first call.

"CRM is going to be the largest IT growth space during the next two to three years," said Linda Zecher, senior vice president for e-business solutions at Oracle Service Industries, Reston, Va.

"All citizens, whether in federal or state and local government, are looking for ways to get more services from their government, and CRM really plays into that," said Zecher. Oracle Corp. of Redwood Shores, Calif., the world's second-largest software company behind Microsoft Corp., hopes to make a big splash in the CRM space with its end-to-end solution.

"For the past three to five years, there has been a lot of noise about e-government, and many agencies and governments thought they could put up a Web site without a lot of meat and offer better service," said Beverly Gibson, general manager of public sector for Siebel Systems Inc., San Mateo, Calif. The company is the No. 1 provider of software for helping businesses manage relationships with their customers.

Many agencies are moving beyond these informational sites as political pressure builds to boost their Internet offerings and provide more opportunities for businesses and citizens to conduct transactions online.

The reasoning of one year or so ago that "we could do a Web site and that is enough, is changing rapidly. So, there will be more of a spike in growth than we've seen with the adoption of other technologies," said Gibson, whose company's software allows organizations to deploy customer contact centers that include intelligent call management and work-flow management.

CRM spending by the U.S. federal government is expected to grow rapidly, jumping from an estimated $90 million in 2001 to between $250 million and $300 million in 2003, said Kimberly Baker, senior vice president of consulting at Federal Sources Inc. The McLean, Va., company provides market research and IT consulting services

Like many other technology segments, this area is difficult to estimate. There are varied CRM definitions, and some are more inclusive than others, Baker said. Federal Sources defines CRM as a component of knowledge management that includes spending for hardware, software and services.

One gauge of CRM's sweeping popularity is the proliferation of research and consulting groups sharpening their focus on this space. Aberdeen Group, a technology market consulting and research provider based in Boston, launched its CRM@Aberdeen research offering last December.

In announcing the move, Aberdeen touted CRM as "one of the fastest growing and most dynamic software markets today." CRM accounted for more than $10 billion in worldwide software, platform and systems integration investments in 2000, and the total CRM market will exceed $24 billion by 2003 and remain a high-growth IT market, according to Aberdeen.

New technology has raised citizen expectations, and trends in the private sector are driving agencies to change how they respond.
"Today, when I file an unemployment claim, I don't want to get passed from service rep to service rep and wait five to eight weeks for a resolution," Gibson said. "I may start my transaction on the Web, and if I need to go to the phone, I expect to be able to pick up the transaction from there. And if I have to go to an office to do some type of in-person certification, I want them to know I was on the phone three weeks ago and on the Web before that. That is the citizen benefit."

The payoff for the government is that the new system prevents citizens "from shopping for the right answer" and tying up different officials for days or weeks, she said.

Siebel's government customers include the General Services Administration, the Education Department, the Postal Service and the state of Kentucky, Gibson said.

Earlier this year, Siebel teamed with American Management Systems Inc., an international business and IT consulting company in Fairfax, Va., to implement a customer relationship management system for the Virginia Department of Taxation.

The challenge facing the tax department was "to completely transform themselves into a customer focused agency," said Jonathan Light, a vice president at AMS.

The solution, which integrated Siebel Call Center with AMS' Advantage Revenue, is a Web-based problem resolution application that enables VA TAX to assist customers over multiple communication channels, such as the Web, telephone and e-mail, Light said.

The system comprises components that support all tax operations, from electronic filing to taxpayer account management, remittance processing collections, audit, enforcement, policy and research.

AMS funds the project and is paid by the state as the desired results are achieved and incremental tax revenue is generated. The company is in the third year of a five-year partnership with the taxation department, with the effort scheduled to run through summer 2003. The VA TAX contract is valued at $122 million.

VA TAX, which introduced a new individual tax form in January, also introduced a solution to handle the anticipated increase in customer inquiries and volume of e-mails and faxes received by its customer service department.

In a traditional environment, there would need to be "a whole bunch of training about how the new form worked and the complex questions would get handed off to experts," Light said. Using the Siebel system, scripted answers "were right on the desktop of the customer service rep and when the same question comes up time and again, they give the same clear, concise and correct answer."

"You now have a device that makes sure each rep has the information at their fingertips, and that they'll give a high-quality answer every time. So, you're taking a lot of variability out of the system," Light said.

Oracle officials also see a huge opportunity in the CRM space, Zecher said. That is because Oracle "has front-office CRM applications that are integrated into back-office applications, and a whole broad suite of products it is marketing into this space," she said.

Oracle officials believe their applications offer an advantage; they reduce integration time and expenses for customers. Among the trends Zecher sees driving government agency officials to embrace CRM are the shift away from legacy systems that are expensive to maintain and difficult to integrate, and the number of federal workers preparing to leave the government.

With droves of federal IT professionals nearing retirement, and the government having trouble recruiting skilled IT workers, the federal government is being forced into more of an outsourcing mode, she said.

Oracle designed, built and deployed an Internet e-commerce and customer relationship management application last fall for the Chicago Park District, which needed to make the Internet work for its citizens by building a Web site that enabled class registration from a simple browser.

The park district, which runs the city's more than 500 parks and numerous ball fields, field houses, swimming pools and skating rinks, offers more than 1,000 adult education and recreation classes each year. Previously, citizens had to visit park sites during daytime hours and conduct business with cash. Now, nearly half the orders are transacted online with a credit card during non-business hours.

Another major CRM government customer is the Transportation Department. In fall 1999, Oracle implemented its iStore, enabling agency departments to accept payments from citizens via the Internet, and its work for the department has since been expanded.

Zecher noted a study of the Internet and government that found there were four phases of adoption: phase one, online presence; phase two, interaction; phase three, transactions; and phase four, total interaction.

In Zecher's view, the public sector has moved into the early part of the fourth phase, but "CRM is really picking up steam."

"Several years ago, three out of five government officials would not have been familiar with the term CRM. Today, we hear government officials say, 'How fast can we move forward?' " Zecher said.

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