Barbara Hohbach
Virginia
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November 14, 2007
Accenture Research Reveals Government Managers Beginning to Embrace Customer Relationship Management (CRM) Principles, But Most Agencies Have Yet to Introduce Them

 

Washington, D.C., November 14, 2001 – Although government executives are not normally driven by goals such as “customer retention” and “profit-per-customer,” they are awakening to the concept that commercially developed customer relationship management (CRM) principles can be critical to the success of their own agencies, according to an Accenture global study released today. Yet, despite the overall willingness – even eagerness – among public sector managers to adopt these principles and put them to work in the near term, the research found that government still has a long way to go to turn the potential of CRM into reality.

At a time when governments worldwide are recognizing the need to improve the ways they provide services to their citizens – and to become more responsive, efficient and customer focused – Accenture’s 11 country study sought to determine the attitudes of senior government executives toward CRM, a technology-enabled capability that has gained widespread interest in business circles as a competitive differentiator. The research targeted four of the most intensely customer-focused agency types: Revenue, Human Services, Motor Vehicles and Government Information (or “portal”) agencies.

“The public’s view of routine service is being shaped by the customer-centric, 24x7 nature of so many private businesses – and they are now expecting the same from government,” said David Hunter, Accenture global managing partner, Government practice. “As the world’s largest provider of services, government has much to gain from using CRM capabilities to meet those higher expectations – by providing self-service options to the public, streamlining government processes and improving interagency data sharing. We are encouraged by the results of our study showing public sector managers worldwide are beginning to embrace the notion that CRM can be adapted to their agencies’ unique objectives and thereby help them improve service delivery to their constituents.”

“But make no mistake, our research also found deep gaps in government agencies between the recognition of CRM’s value and practical application on an operational level,” Hunter continued. “In fact, most government agencies are just beginning to harness the power of CRM and need to do much more to truly realise its potential.”

The survey found broad acceptance of customer service among government managers as important to achieving superior performance, and three-quarters of respondents expressed confidence in CRM’s applicability to government. At the same time, however, there are apparent limits to how much government agencies will embrace what they perceive to be purely private sector concepts. As an example, only seven percent of agencies said they would develop “customer segmentation,” a key CRM technique that enables organizations to gain greater insight into their customers and tailor services to meet individual needs. One explanation for this may be a reflexive distaste for the connotation that government might separate its customers into classes or groups the way that a private sector organisation would.

“What’s notable here is that the respondents were, in fact, able to identify or describe the major classes or groups of customers they served,” said Sean Shine, the Accenture partner who directs CRM initiatives for Accenture’s government practice. “Further, they identified greater customer insight as a high priority, so it may very well be a matter of terminology that is preventing further adoption of customer segmentation capabilities, which we think is vitally important to helping government agencies serve people better.”

While improving the accessibility of government and opening up new channels to increase customer interaction were identified as key priorities in the survey, government agencies do not necessarily plan to tailor the services that are delivered through these channels. Only 20 percent of respondents said they plan to develop the means to gain better insight into customer needs, which is a critical first step to tailoring services. And while customer education and awareness was the number two factor cited by government managers in terms of achieving superior performance, only seven percent plan on developing capabilities in this area.

Survey respondents themselves identified bureaucracy, particularly hierarchical and partitioned organizational structures, and technology as the two greatest obstacles to further CRM adoption in government. While the issue of limited government budgets was not perceived to stand in the way of planning and developing CRM capabilities, it is a top three concern for improving CRM at the operational level.

The study found indications that CRM may be viewed as more of a technology issue than a business issue, with a greater focus on developing IT capabilities than on managing information. Clearly, many government managers have yet to embrace CRM as a whole-of-business approach. For instance, although many agencies are already using technology to collect data through their interactions with customers, the survey results showed nearly two-thirds of agencies are not using the information they collect to streamline processes or improve basic customer service. Rather, the focus appears to be on using the data for public relations purposes and internal staff cost management.

Finally, the study found that agencies are highly receptive to the possibilities of partnering with each other and with private sector organizations to facilitate information sharing and relieve cost pressures. Nearly 90 percent of government managers said they would enter into strategic alliances with other agencies and with businesses to build enhanced service capabilities. However, they lack the incentives and the capabilities to make that happen. Only half of respondents reported that they have the ability to share information with other government agencies, while only 11 percent have the technological ability to share information with businesses.

“Collaboration and information sharing, while respecting privacy concerns, are at the foundation of CRM and can greatly enhance an organization’s ability to operate more efficiently and provide enhanced service,” said Hunter. “In government, it can lead to societal benefits, like those gained from the ability to enforce child support payments through potential suspension of a driver’s license. And partnering with private industry can bring government a new pool of IT resources and capabilities to help them take CRM to the next level.”

“What we have discovered in this survey is that government managers have the will but not necessarily the way to fully implement CRM capabilities,” said Hunter. “There are challenges and obstacles, yes – but we believe this study can provide government managers with some insight on opportunities to seize, and pitfalls to avoid, as they seek to get more out of CRM in their quest to become more responsive, efficient and customer-focused.”

About the Study
The research objective of this study was to determine the penetration and perception of Customer Relationship Management (CRM) in specific areas of government: Revenue, Human Services, Licensing, and Portal Agencies. The scope of this study crossed 11 countries (Australia, Canada, Finland, France, Germany, Ireland, Italy, Singapore, Spain, the United Kingdom, and the United States). Respondents were senior-level executives and managers from the agencies listed. These respondents were determined to be responsible for the management of customer relationships at either the strategic or operational level within their agencies. Interviews were conducted over the telephone, between August 13 and September 28, 2001.

About Accenture
Accenture is the world’s leading management and technology consulting organization. Through its network of businesses approach – in which the company enhances its consulting and outsourcing expertise through alliances, ventures and other capabilities – Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 46 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is http://www.accenture.com.

For more information on Accenture’s Global CRM Study, visit http://www.accenture.com/CRMePressKit

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