Public sector using CRM to cut costs

The cost implications to improving service to citizens has opened the door to customer relationship management in the public sector, experts say.

Jim Stonehouse, national business leader, public sector for Oracle Canada, says governments are getting more and more involved in CRM.

“I don’t think there are too many governments that are worried about generating more revenue through the process, but clearly they’re pretty interested in streamlining and saving money through the use of CRM products,” says Stonehouse.

This differs slightly from the business application.

“It’s about better service with limited resources in the public sector and in the private sector it’s certainly better service, but that better service always has the motive of improved profits,” says Stonehouse.

At a recent conference in downtown Toronto Stan Brown also addressed the issue of CRM in the public sector.

“CRM is not technology. CRM is not a project. CRM is not an initiative. CRM is a strategy, and it’s a strategy of how you want to understand, how you want to anticipate, how you want to manage, and how you want to personalize the customer experience,” says Brown, partner, PricewaterhouseCoopers management consulting services.

According to Brown, the strategy breaks down into four sub-categories: customer, channel, product and infrastructure. Once the infrastructure strategy has been defined, he says time and again organizations fail to put together a performance measurement and management strategy.

“What’s the business case? Why are you doing what you’re doing? What’s the qualitative element and what’s the quantitative element? And I’m not just talking about revenue and revenue enhancements,” says Brown.

“We’re doing those business cases in the public sector to say, ‘What’s the impact of what I’m going to do? What’s the impact of having less complaints? What’s the impact of sharing information?'”

Once a strategy has been put in place, Brown says organizations need to answer a series of questions to fully understand where they stand. For example, Have you aligned your CRM strategy with customer value and expectations? Have you managed customer information as a strategic asset? Do you capture information at every transaction? Do you leverage that information for the development of new services, for the development of new strategies for the organization?

“It’s not easy,” Brown summarizes. “If you want to be successful you’re going to have to spend time on it and you have to be logical about it.”

According to Gartner research, many public sector players are opting not to bother. In a presentation at its ITxpo/Symposium in Toronto, research manager Walter Janowski offered a breakdown of CRM adoption by industry. Government trailed almost all sectors at five per cent, and because it’s not a global industry working through many different channels to offer commodity products, Janowski said there wasn’t any indication that would change anytime soon.

— with files from Shane Schick

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