How to develop a strategy for implementing CRM in public sector.

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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:

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]

Regards,

Richard Forsyth

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09th Sep 2002 14:03

Hi there,

It is true broadly enough what you have been trying to mention in the article. It does give some broad base recommendations on how not to end up in a failure for CRM implementations (not just in public sector). The reason I am posting this is that the initial reason that your article title attract me is that I am very interested in implementing a strategy for CRM in the public sector without any actual discrimination. As we know, most CRM initiatives nowadays talk about actual differentiation of the customers (constituents in this case) and that can be pretty rocky and touchy point to skip around when a government is supposed to treat all equally and fairly. Any thoughts from the author or any readers on the forum? I understand this isn't necessarily the aim of this articles. However I am just interested to hear the views regarding this issue.

Thanks (0)
avatar
10th Sep 2002 11:28

Response to Wendy Hewson comment: How Local Government views the service transformation challenge.

Wendy,

Thanks for the great analysis of the Local Government view of the challenge that faces them. Sounds like they really need support from the private sector which has faced at least the first three of your key points (and also have problems coordinating their own products and services), and have learnt a lot about how not to do it, and quite a bit on how it can be done.

Best wishes,

Richard Forsyth

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avatar
05th Sep 2002 09:29

I read with interest your article on developing a strategy for implementing
CRM in the public sector. As the director for a CRM consulting practice
specifically tailored to central government the points you raise are of
significant interest to me.

Broadly I agree with the content of your article - time and again I have
seen government CRM-related projects stumble due to a few issues:

One - the abrogation of responsibility for business decision-making to
consultants & vendors
Two - the lack of a CRM strategy full stop
Three - the adoption of an IT-led CRM approach

I would like to make a point about your comment 'who can develop that
strategy?' Though the responsibility ultimately rests with the business
owner itself - in this case the central government or local authority head -
there is a place for a CRM consulting partner to assist the client with
understanding their options and the resultant impacts - as well as -
assisting with the management of the risk of change. General management
consultants rarely have the practical experience to give advice in this way
- and technology consultants simply do not understand the operational
business implications of a particular approach. My advice to all exploring
CRM in the government is to get the right sort of help (as opposed to
outsourcing decision making) and ensure that you check CV's for experience
in designing, implementing, and operating successful CRM business models.

Regards,


Daniel J Gilbert
Director
EDS - Government CRM Practice

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avatar
10th Sep 2002 11:35

Response to Alan Meekings comment: Why top-down programmatic approaches to change don't work.

Alan,

I agree entirely that top-down isn't enough. That's why we recommend significant involvement of the citizen / customer in the development of the strategy (see previous editorials: 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 (links provided in body of editorial above).
In my view, strategy development needs to be top-down and bottom-up, with the ultimate end-user in CRM being the customer / citizen. Of course, it would be more than useful to involve customer-facing staff as well.

Best wishes,

Richard Forsyth

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avatar
By c.obi
02nd Sep 2002 15:25

I shared similar concerns in my response (titled Ethical Responsibilities of Vendor and Consultancies)to your article on the impact of CRM & e-govt on democracy.

However I do not believe local authorities need to have an understanding of CRM to develop a strategy. What most local authorities and government appear to need foremost in developing a strategy for CRM are

1. To know and understand their customer(the citizen)- Who are they? How many(closest actual figures, not just census statistics)? How are they segmented? What are their expectations of the services offered? e.t.c

2. To develop the service offering - What are the services being offered? Do they meet specific customer needs? How can the services be best delivered? Where and who can they be best delivered? What 'departmental or functional silos' have to be dismantled for service delivery? How can the effectiveness of the services be measured e.t.c


With local authorities asking and answering these type of questions, they are well away into developing their own CRM strategy and the necessary technology components required will begin to emerge in a technology map once the customer and service offering models have been formulated. Only then do you bring in the 'techies'.

These questions present a completely new approach for the public sector in how they view their customers and deliver services to them.

In my experience, some public sector clients get well into their CRM implementations avoiding these questions only to be repeatedly hit by them time & time again.

Thanks (0)
avatar
09th Sep 2002 14:03

Hi there,

It is true broadly enough what you have been trying to mention in the article. It does give some broad base recommendations on how not to end up in a failure for CRM implementations (not just in public sector). The reason I am posting this is that the initial reason that your article title attract me is that I am very interested in implementing a strategy for CRM in the public sector without any actual discrimination. As we know, most CRM initiatives nowadays talk about actual differentiation of the customers (constituents in this case) and that can be pretty rocky and touchy point to skip around when a government is supposed to treat all equally and fairly. Any thoughts from the author or any readers on the forum? I understand this isn't necessarily the aim of this articles. However I am just interested to hear the views regarding this issue.

Thanks (0)
avatar
10th Sep 2002 11:50

Response to comment by John Ho - Valid Points.

Dear John,

Here in the UK there is a similar concern amongst many that the use of CRM techniques may be perceived as favouring some citizens rather than others at the risk of appearing to discriminate.

I believe we can use CRM techniques to identify specific groups, with significant benefits, without impacting anyone's rights to service. Let me give a few simple examples:

Of course everyone should have the right to education for their children, but that doesn't invalidate the fact that old-age pensioners are unlikely to require those services. Focusing education-related communications on those with children of educational age has obvious benefits.

At the other end of the process (customer contact end) there are no doubt many citizens who are comfortable to use the Internet to communicate with local / central government, with resulting significant cost-savings. Of course there are also many people who don't want to use the internet, and that group may include some of the more vulnerable members of society. Such people need to be able to have access on a face-face basis.

That doesn't invalidate implementing an Internet-based channel. By doing so, we shift demand from the face-face channel to the Internet channel, probably with a two-level benefit - we reduce overall costs (depending on Internet channel take-up) and enable the face-face channel to focus more on the needier citizens. An obvious consequence of this is that we need a multi-channel contact strategy, including face-face, phone, and Internet (and potentially others).

These are just two examples of how CRM can deliver benefit without affect rights to service. If you need more, or want to discuss further, either email me direct ([email protected]) or post another comment on this editorial.

Best wishes,

Richard Forsyth

Thanks (0)
avatar
05th Sep 2002 09:29

I read with interest your article on developing a strategy for implementing
CRM in the public sector. As the director for a CRM consulting practice
specifically tailored to central government the points you raise are of
significant interest to me.

Broadly I agree with the content of your article - time and again I have
seen government CRM-related projects stumble due to a few issues:

One - the abrogation of responsibility for business decision-making to
consultants & vendors
Two - the lack of a CRM strategy full stop
Three - the adoption of an IT-led CRM approach

I would like to make a point about your comment 'who can develop that
strategy?' Though the responsibility ultimately rests with the business
owner itself - in this case the central government or local authority head -
there is a place for a CRM consulting partner to assist the client with
understanding their options and the resultant impacts - as well as -
assisting with the management of the risk of change. General management
consultants rarely have the practical experience to give advice in this way
- and technology consultants simply do not understand the operational
business implications of a particular approach. My advice to all exploring
CRM in the government is to get the right sort of help (as opposed to
outsourcing decision making) and ensure that you check CV's for experience
in designing, implementing, and operating successful CRM business models.

Regards,


Daniel J Gilbert
Director
EDS - Government CRM Practice

Thanks (0)
avatar
05th Sep 2002 08:29

I couldn’t agree more with Richard that Local Authorities need to “own” their own strategy for development & improvement. Where I disagree is over his prescription of 4 key steps to “the heaven of a successful CRM implementation”.

I understand why he advocates this approach. It seems so intuitively sensible & seductive that it’s become today’s received wisdom. But this kind of top-down, programmatic approach to change is always sub-optimal & inefficient. It doesn’t work well in the private sector & it won’t work any better in the public sector. There are several reasons for this. Let me highlight just 2:

1. Envisioning Improvement
Because senior managers typically have little idea of what’s possible or how to achieve it it’s difficult for them to conceive how very much better things could be. Senior managers are typically disconnected from end users & hence lack a keen understanding of their real wants & needs & what they interpret as ‘value’ from local services. Front-line staff typically do have a good feel for the end-users’ perspective but are almost never involved properly in the development of any top-down, managerial vision.

Ultimately unless an organisation can change the way its work works – (a) acting from the perspective of what really matters to users; & (b) through improving the flow of work & systematically eliminating waste - little fundamental improvement will result.

Instead of trying to build a fruitless, top-down vision of a new & brighter future, start by developing a simple strategic roadmap identifying the major things to be changed or put in place over a 15-month to 3-year period. This will be much more effective than any lofty vision in translating a desire for improvement into real, practical, sustainable benefits.

Programmatic Change
‘Managing change by managing projects’ only works in certain circumstances. Typically the projects in an overall programme address specific issues (e.g. getting into new markets or improving service quality) but miss the underlying systemic issues - the real hidden millstone round the organisation (e.g. the time-span of attention & quality of cross-functional team-working of the senior management group, the use of performance measures & targets, the roadmap for IT development etc).

There is a better way ... but that’s another story for another day.

Alan Meekings
[email protected]

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02nd Sep 2002 18:20

Public service transformation is on the tip of everyone’s tongue, and high on the UK Government’s agenda. However from a local goverment perspective the IEG targets present a challenge of far greater magnitude than any experienced by the private sector.

The bottom-line is that total investment is estimated to cost Local Councils £2.5bn. Of this, £350million will be centrally funded, leaving a £2.15bn shortfall to be found by local government from more cost-effective service delivery. A challenge indeed and let’s not forget that meeting the Government’s IEG targets is mandatory with penalties for non-compliance.

Local Authorities themselves consistently identify four key risks and challenges to achieving the IEG targets.

1 Finding the capacity for effective change management. Changing the point of design and delivery of services to a customer-centric viewpoint needs effective and sustained change management. Few people in the public sector have ever experienced the practical reality of a major change programme.

2 Resourcing the investment. Funding is a real worry for many councils. They have to explain to their taxpayers why they are spending on websites while simultaneously cutting-back on highly valued local services. They have been tasked in finding ways to deliver improvements and liberate cost savings in one area so as to re-invest these savings in other areas. Liberating £2.15bn is a hurculean task that only a that few private sector organisations would be able to achieve

3 Securing the take-up of new service channels. The development of a sensible, prioritised “roadmap” for launching the new service channels, based on pragmatic assessment several factors, such as user benefit, technical feasibility, in-house capability, and so on is non-trivial.

4 Improving the co-ordination of Government activities. Delivering improvement in isolated aspects of local services is challenging enough in its own right, without the added burden on integration across various departments or functions.

It’s good that local authorities understand the scale of the challenge they face. Unfortunately, experience of what works and what doesn’t in the private sector suggests two things: first, there are further “hidden” challenges which the public sector currently doesn’t see; and, second, there are potential solutions out there which the public sector currently doesn’t recognise – and therein lies a totally new opportunity both for the public and private sector alike.

Wendy Hewson, Hewson Group http://www.hewson.co.uk

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avatar
10th Sep 2002 11:50

Response to comment by John Ho - Valid Points.

Dear John,

Here in the UK there is a similar concern amongst many that the use of CRM techniques may be perceived as favouring some citizens rather than others at the risk of appearing to discriminate.

I believe we can use CRM techniques to identify specific groups, with significant benefits, without impacting anyone's rights to service. Let me give a few simple examples:

Of course everyone should have the right to education for their children, but that doesn't invalidate the fact that old-age pensioners are unlikely to require those services. Focusing education-related communications on those with children of educational age has obvious benefits.

At the other end of the process (customer contact end) there are no doubt many citizens who are comfortable to use the Internet to communicate with local / central government, with resulting significant cost-savings. Of course there are also many people who don't want to use the internet, and that group may include some of the more vulnerable members of society. Such people need to be able to have access on a face-face basis.

That doesn't invalidate implementing an Internet-based channel. By doing so, we shift demand from the face-face channel to the Internet channel, probably with a two-level benefit - we reduce overall costs (depending on Internet channel take-up) and enable the face-face channel to focus more on the needier citizens. An obvious consequence of this is that we need a multi-channel contact strategy, including face-face, phone, and Internet (and potentially others).

These are just two examples of how CRM can deliver benefit without affect rights to service. If you need more, or want to discuss further, either email me direct ([email protected]) or post another comment on this editorial.

Best wishes,

Richard Forsyth

Thanks (0)
avatar
10th Sep 2002 11:22

Response to Charles Obi comment: What is CRM Stratetgy in the Public Sector?

Dear Charles,

Apologies for the delay in responding to your comment - I've been away a lot recently.

The core reason I believe local authorities (or anyone) implementing CRM needs to understand the technology as part of developing a CRM strategy is because it is enabling technology. This means it allows organisations to do things that they haven't done before, and so are unlikely to have a clear view of if they don't understand it.

Of course, they also need to understand their customers / citizens, (see the editorials on involving the customer - links in body of editorial).

Once they have a view of their customers, and an understanding of what the technology enables, they can define the service offerings they wish to offer.

Best wishes,

Richard Forsyth

Thanks (0)
avatar
By c.obi
02nd Sep 2002 15:25

I shared similar concerns in my response (titled Ethical Responsibilities of Vendor and Consultancies)to your article on the impact of CRM & e-govt on democracy.

However I do not believe local authorities need to have an understanding of CRM to develop a strategy. What most local authorities and government appear to need foremost in developing a strategy for CRM are

1. To know and understand their customer(the citizen)- Who are they? How many(closest actual figures, not just census statistics)? How are they segmented? What are their expectations of the services offered? e.t.c

2. To develop the service offering - What are the services being offered? Do they meet specific customer needs? How can the services be best delivered? Where and who can they be best delivered? What 'departmental or functional silos' have to be dismantled for service delivery? How can the effectiveness of the services be measured e.t.c


With local authorities asking and answering these type of questions, they are well away into developing their own CRM strategy and the necessary technology components required will begin to emerge in a technology map once the customer and service offering models have been formulated. Only then do you bring in the 'techies'.

These questions present a completely new approach for the public sector in how they view their customers and deliver services to them.

In my experience, some public sector clients get well into their CRM implementations avoiding these questions only to be repeatedly hit by them time & time again.

Thanks (0)
avatar
10th Sep 2002 11:35

Response to Alan Meekings comment: Why top-down programmatic approaches to change don't work.

Alan,

I agree entirely that top-down isn't enough. That's why we recommend significant involvement of the citizen / customer in the development of the strategy (see previous editorials: 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 (links provided in body of editorial above).
In my view, strategy development needs to be top-down and bottom-up, with the ultimate end-user in CRM being the customer / citizen. Of course, it would be more than useful to involve customer-facing staff as well.

Best wishes,

Richard Forsyth

Thanks (0)
avatar
10th Sep 2002 11:28

Response to Wendy Hewson comment: How Local Government views the service transformation challenge.

Wendy,

Thanks for the great analysis of the Local Government view of the challenge that faces them. Sounds like they really need support from the private sector which has faced at least the first three of your key points (and also have problems coordinating their own products and services), and have learnt a lot about how not to do it, and quite a bit on how it can be done.

Best wishes,

Richard Forsyth

Thanks (0)