Thursday, July 17, 2008

Governments increasing spend on Customer Relationship Management solutions

Driven by the need to improve its management of constituent relationships, a new report from Datamonitor, “CRM and the Move to Constituent-Centric Government”, predicts that government spending on customer relationship management (CRM) technology solutions in the US, UK, Germany and France will grow from $2.9 billion in 2008 to $4.4 billion in 2013. In today’s commercially-oriented world, it has become a trend among public sector agencies to treat constituents as customers who expect top levels of service.

CRM allows governments to inform constituents of relevant services and upcoming events or deadlines which might affect them. For example, sending out a reminder email about tax filing information in advance of the deadline can decrease the number of late filers. Not only does this bode well for revenue collection, it also reduces the costs of chasing after the late-filers. In some cases, innovative governments have taken this a step further, and are experimenting with Web 2.0 in CRM, through constituent surveys and interactive websites. CRM solutions also allow governments to increase efficiencies and reduce costs by tailoring message content for constituents.

In addition to the benefits it provides citizen-facing functions, CRM has a positive impact on improving operations and management decisions. By adopting a CRM strategy, government agencies can achieve a host of benefits when it comes to streamlining its business processes and analytical capabilities. With the increased emphasis on performance management in government agencies, CRM steps up to the plate by allowing government to track the nature of constituents inquiries- ‘who’, ‘what’, ‘why’, ‘where’, ‘when’, and even ‘how’; CRM solutions increasingly support multi-channel communications, including phone, email and in some cases, even text messages.

Despite the many obvious benefits to adopting CRM, implementation faces inevitable challenges which must be addressed in order for government to realize the full value of these solutions. The report notes that a key aspect of CRM as a solution is only as good as the agency that implements it. A successful CRM implementation involves buy-in from management and staff, as well as the adoption of constituent-centric business process, with the technology serving as the grand enabler in the equation.

More information on the Customer Relationship Management market can be found at

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