CRM moves beyond call centers

Fed market eyes <@SM>18 percent annual growth over 5 years

Mark Forman, the administration's e-gov czar, is waiting for industry to bring government the next iteration of customer relationship management.

"We need industry to be a catalyst," he said.

Speaking last month in Washington at an e-government symposium sponsored by Unisys Corp. of Blue Bell, Pa., Forman said CRM can help federal agencies reduce paperwork, bring government services online and facilitate homeland security.

And as large numbers of federal employees retire or join the private sector, CRM can help agencies carry out their missions with fewer workers.

"We literally don't have the people to do the work. There's not the human capital to get the work done," said Forman, who is the associate director of information technology and e-government for the Office of Management and Budget.

"The government is struggling with a tremendous volume of interactions," said Dan Schwartz, vice president of the CRM solutions consulting practice for Electronic Data Systems Corp. of Plano, Texas. CRM can help agencies shoulder the load and deal efficiently with their multiplying tasks and responsibilities, he said.

Viewed from this perspective, CRM is a strategy for the way that government provides services to citizens and shares information with other government agencies. Not only would CRM strategy apply to automating citizen requests via the phone, but also to helping agencies communicate more effectively with each other when, for example, coordinating responses to disasters and emergencies.

Federal spending on CRM is expected to increase at an average annual growth rate of 18 percent from $260 million in fiscal 2002 to $590 million in fiscal 2007, according to the market research firm Input Inc. of Chantilly, Va.

Systems integrators have projects with a wide cross section of civilian and defense agencies and see ample new opportunities. Greg Baroni, president of Unisys' Global Public Sector, said the company has made CRM "one of the hallmarks of how we go to business."

Unisys has CRM projects in the federal sector with agencies in the departments of Health and Human Services,Justice and Labor and the General Services Administration, company officials said.

CRM in the federal sector is not without its share of challenges, though. Jeff Ackerson, senior principal for CRM at American Management Systems Inc. of Fairfax, Va., said integrators accustomed to selling CRM in the commercial sector will find selling to the federal sector counterintuitive. Federal CRM selling is less like selling to a large commercial organization and more like selling to a small- to medium-sized commercial company, he said.

For this reason, integrators "have to sell many times over, unfortunately," he said.

Systems integrators also must help agencies walk through a minefield of privacy and security issues that accompany citizen transactions, analysts said.

Since its introduction, government officials have realized that CRM can be leveraged to improve relations with other agencies and departments as well as with businesses and citizens. Officials also have realized that there are many more channels for service delivery than just call centers geared toward routing telephone calls.

"CRM in government is very different than it was two years ago," said Estaban Kolsky, a senior research analyst with the market research firm of Gartner Dataquest of Stamford, Conn.

One of the most important aspects of the new iteration of CRM for the federal government is its embrace of multichannel management, industry officials said.

While federal agencies previously focused narrowly on optimizing call centers, under a multichannel approach they will integrate services delivery across multiple channels or touchpoints, such as phone, fax, mail, office visit and e-mail.

Call centers are a well-established channel, but now other channels "are coming to light," said Kurt Hyde, the CRM principal for Global Public Sector at Unisys.

Scott McIntyre, a managing partner and head of CRM solutions for the federal practice of KPMG Consulting, said, "If there is a holy grail of CRM, it's multichannel."

KPMG Consulting Inc., McLean, Va., is working on CRM projects for 18 defense and civilian agencies, including Centers for Medicare and Medicaid Services and agencies within the departments of Agriculture, Defense, Labor and Treasury, McIntyre said.

For call center solutions, systems integrators partner routinely with Siebel Systems Inc. of San Mateo, Calif., and PeopleSoft Inc. of Pleasanton, Calif., while for channel management they partner with companies such as Aspect Communications Corp., San Jose, Calif.; Avaya Inc., Basking Ridge, N.J.; and Cisco Systems Inc., San Jose, Calif., company officials said.

There are only a few federal programs, such as Medicare and income tax filing, where there is large-scale government-to-citizen interaction, Ackerson said.

But "the potential for managing government-to-government relationships on a consistent basis has a lot more potential value for the federal government than trying to deal with [managing relationships] at the government-to-citizen level," he said.

AMS is working on a CRM project for the Centers for Medicare and Medicaid Services and is partnering with IBM Corp., Armonk, N.Y., on another with the Naval Recruiting Command, Ackerson said.

In addition to paperwork reduction and digital government, the federal government will rely increasingly on CRM to optimize functions associated with homeland security and the war against terrorism, Kolsky said.

But this is being held up by the fact that several key technologies, such as pattern recognition and incident tracking, are still under development, McIntyre said.

Other key CRM trends are the sharing of records among agencies as a way of tailoring government communications to citizens, balancing loads across call centers and consolidating those centers within agencies, industry officials said.

CRM can help the federal government keep up with the times. More than 5 million citizens interact with the government each day, and electronic communications is now the predominant channel for government to citizen interface, Forman said.

Ackerson said it will be increasingly difficult for the untrained eye to detect CRM in the federal sector. For example, he said CRM and digital government overlay each other and share many commonalties, particularly regarding how government interacts with citizens.

"We expect to see a lot of opportunity for CRM technologies, business processes and strategies that are not identified as CRM but are one aspect of a digital government initiative," he said.

A number of the Quicksilver projects can benefit from CRM strategies, industry officials said. Quicksilver was the name of the task force created by OMB that selected two dozen e-gov projects last year as high priorities.

Forman said OMB and the agencies managing the projects are focusing on "breakthrough performance" this year.

"The Quicksilver initiative offers fertile ground for CRM," Schwartz said. *

Staff Writer William Welsh can be reached at

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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