We've been focusing quite heavily on the use of CRM in the public sector in the past few weeks (see CRM Opportunities in e-Government and The impact of CRM & e-government on democracy in US and UK), and we expect that focus to continue in the future. This week I want to flag what I consider the most significant issue based on my reading of the UK consultative paper on e-government: [email protected] - Towards a national strategy for local e-government.
From a CRM practitioner's perspective, the major issue coming out of a reading of that report is the risk of failed CRM implementations. The report recognises the significance of CRM for the e-government space but has a very different view of the scope of CRM compared with private sector experience. It identifies CRM as a technology, but seems to exclude many of the technologies that we would consider part and parcel of CRM - for example the multi-channel management technologies, and the data mining technologies.
It does recognise that CRM is wider than a technology, requiring organisational change for effective usage, but in our view it makes a serious error in relying on strategic partnerships, likely to be with technology partners, to provide the strategic expertise to help local authorities to develop the strategy for implementing CRM, and the experience to manage the organisational changes required.
This seems to me likely to lead to serious difficulties with CRM implementations in the public sector, and I want to focus on what I perceive as the potential problem areas in this editorial.
Let me start by saying that I believe that the major organisations likely to become strategic partners of local organisations in the implementation of e-gov in the public sector have an important role to play in delivering that strategy. There is no doubt that their undoubted skills in systems integration and the technical delivery of CRM will be required by many local authorities to deliver their e-gov strategies.
Despite their significant role, I strongly recommend any local authority not to use that partner to develop its business strategy for the implementation of e-gov, for a number of reasons:
- Firstly, any local authority needs to be aware of the conflict of interest in any such organisation when it is involved in the development of the CRM strategy for a local authority and the implementation of that strategy. The parallels between the audit and consultancy arms of major audit firms, and such major scandals as Enron immediately spring to mind. In the current commercial environment for CRM where the commercial sector is pulling back from major investments in CRM increases these difficulties. Many of these major companies are facing up to major holes in their CRM revenue plans, and there will be significant internal pressure for the local government sector to be seen as a potential route to filling those revenue holes. We've covered this issue in some detail in a recent editorial: The failure to achieve ROI from CRM: How responsible are the Big 5 consultancies? - recommended reading for all local authorities developing a CRM strategy or appointing a strategic partner.
- Secondly, do these partners have the knowledge of how to use CRM to deliver value so that they can help local authorities develop a strategy likely to deliver benefits? One might expect them to have such expertise, but in most cases the reality is very different. The core expertise they bring to the table is the ability to implement technical CRM solutions through the implementation of packages and the required system integration. These skills are, of course, a key requirement for the successful adoption of CRM, but organisations with such skills may have very little expertise at actually running CRM programmes and therefore seeing where the practical benefits arise, and hence the ability to help develop a business strategy for adoption of CRM. Any local authority which doubts this can easily check this out by asking candidate partners what percentage of their CRM revenues over the last two years have come from running CRM programmes as opposed to implementing CRM systems. A cynic might say that if a candidate organisation understands the question that is already a good start, but very few are likely to be able to demonstrate significant experience in 'doing CRM' compared with implementing it. For many of them there also has to be the question as to whether they understand the needs of local authorities well enough to be able to apply any putative understanding of the benefits of CRM to the e-gov world.
- Another real risk is that, once in implementation mode with a technology-based partner, the tail may wag the dog. The IT experience leads to an IT-focused project, and if one thing is clear from CRM implementations in the private sector it is that IT-led projects are a disaster. It is essential that each local authority has a very clear view of what it is trying to achieve at the business level to keep the IT implementation team focused on delivering technical solutions of real practical value at the business level.
- Finally, local authorities need to be aware that CRM in the private sector is already beginning to change shape and business objectives, and these changes are highly relevant to the public sector and are likely to be accelerated by the e-gov initiative. Perhaps another bit of useful reading would be our recent editorial: Emerging trends in customer - supplier relationships.
What I hope has come clear from this initial discussion is that, in our view, it is essential to have a clear-headed business strategy for the adoption of CRM to have any reasonable expectation of a successful outcome from the implementation. It is also, in our view, unrealistic to expect any strategic implementation partner to be able to develop that strategy for the local authority.
So who can develop that strategy? Well, fundamentally that responsibility rests with the local authority itself and it is very high-risk to delegate it elsewhere. There are two key issues in being able to develop that strategy. Firstly to ensure that the local authority has sufficient understanding of CRM, and secondly to have a clear vision of what it wants to achieve strategically through the implementation of e-gov. Essentially, that understanding has to be built within the local authority, and if it should be tested with third parties, the most important third party to involve is the citizens themselves. In a number of editorials we've outlined a methodology for this involvement of the citizen / customer in the development of the business strategy. See Where is the Customer in CRM?, Deliver the benefits from CRM by putting the C into CRM - Part 1, and Deliver the benefits from CRM by putting the C into CRM - Part 2.
Whilst we're at it, perhaps we should explore how we implement CRM in a bit more detail to make sure that there's a good understanding of the process in the local government sector. The consultation paper ([email protected]) recognises the need for organisational change when implementing CRM, but does not seem to be aware of some of the other dimensions of successful CRM implementation. You need more than the organisational change. Commercial experience suggests there are five key steps to the heaven of a successful CRM Implementation:
- Develop an actionable vision of where you want to get to.
- Develop a programme of the projects you need to undertake which currently limit the delivery of that vision, prioritised by value, cost and flexibility. (See Delivering ROI from CRM through incremental implementation and Back to the future: a strategic planning methodology to successfully adopt CRM and sustainability for a discussion on how to develop this list.).
- Implement the organisational change, the technology, and the detailed business process changes required for each project.
- Measure the successes and failures of each completed project.
Perhaps the biggest difficulty in getting started on this process is to make sure you have the understanding you need of CRM in order to be able to develop the actionable vision of what you want to do. With one local authority, I'm exploring doing this by running a series of one-day workshops that bring the commercial experience of CRM to the local authority, and enable a discussion of the relevant objectives, issues and opportunities that experience suggests for the local authority. That seems a reasonable starting step to the development of a local authority's strategy for the adoption of CRM within their e-gov strategy. Of course, each subsequent step will raise further issues, and I hope to be able to address how those can be addressed in further editorials.
Whichever approach a local authority takes to the development of its CRM and e-gov implementation strategy, I hope this editorial makes it clear that there are significant risks in expecting a strategic implementation partner to develop that strategy for you. A clear strategy for CRM and e-gov implementation is a pre-requirement for the successful adoption of CRM and e-gov. If you need help in developing that strategy, make sure that that help comes from elsewhere than your implementation partner.
As, always, we're interested in your views on this subject, so please make them below or email me at mailto:[email protected]