Gaining Taxpayer Respect

Government CRM has a private-sector goal: customer satisfaction.

After years of dismissing CRM as a poor fit for the public sector, many government agencies are now enthusiastically embracing the technology. In fact, some analysts say the government sector is the hottest growth market for CRM. Barton Goldenberg, president of ISM Inc., a consultancy in Bethesda, Md., says he expects government spending on CRM software will grow 30% in 2004, reaching up to $2 billion in sales.

The government, of course, doesn't sell many products or services, and most agencies aren't using CRM to increase revenue. But Goldenberg says several of the other reasons for businesses to use CRM also apply in the public sector: cost reduction, product and service improvement, better customer knowledge and higher employee morale, to name a few. To achieve these benefits, agencies are often using conventional software, call centers and the kinds of online services offered by major retailers. Even though government agencies aren't driven by profit, they do want to serve the public better and become more efficient. In this sector, CRM is closely related to "e-government" -- using technology like online services to make it easier for taxpayers to get services.

On the Internal Revenue Service Web site, for example, professional tax preparers can see customers' IRS accounts, file returns and resolve tax problems. Corporations can also file. Because of security and privacy concerns, the agency isn't ready to give taxpayers the same kinds of access. But more than 25,000 tax professionals are using IRS "e-services," says Richard Skorny, the agency's deputy associate CIO for program management.

One Stop for Answers

State and local governments are also jumping on the CRM bandwagon. The Dade County, Fla., government is working with the city of Miami to install a joint call center that will handle all nonemergency service requests beginning in November. Residents will be able to dial 311 whether they want to apply for a business permit or report an abandoned car, a stray cat or a pothole. The center won't merely answer questions; it will fill out work orders for city and county employees, dispatching a building inspector or dogcatcher as needed.

The Miami-Dade 311 Answer Center will be the nation's first to handle calls for both a city and a county, says June Randall, assistant director of the county's enterprise technology services department. Project leaders hope that many of the nearly three-dozen municipalities in Dade County will join.

CRM can also improve coordination among federal agencies, where people don't know whom to call about passports (the State Department), student loans (the Department of Education) or food poisoning (the Food and Drug Administration). If a citizen calls the wrong agency, it can take many more calls and transfers to find the right one. "They often get on that carousel of being shunted around" from office to office, says Theresa Nasif, director of the Federal Citizen Information Center, an office of the General Services Administration.

Nasif's office operates the federal government's central Web site,, and the 1-800-FEDINFO call center. Together they will receive more than 230 million customer contacts this year. Nasif also heads a program called USA Services that seeks to improve responses to citizens across all the agencies. "It's an obligation of the government to serve citizens in this manner," she says. "It increases citizens' confidence in their government."

The Miami-Dade Answer Center uses Motorola Inc.'s Customer Service Request system, which is CRM software for the public sector. Motorola's expertise began with 911 emergency call centers and dispatch systems. In many government CRM projects, the vendors are mainstream CRM suppliers. The IRS, for example, uses PeopleSoft CRM for Government.

Todd Sickles, a partner in the federal practice of consulting firm Accenture Ltd. in Reston, Va., says call centers are nothing new for government, but in many cases the call centers are silos that are poorly integrated with the agencies' other business processes.

ISM's Goldenberg says that many government organizations are reluctant to measure service delivery and track customer interactions because of the public sector's prevailing risk-averse culture, where a relatively minor dip in customer satisfaction can be grist for a heated congressional hearing.

Better Citizen Service

One government that's using CRM as a performance improvement tool is the city of Baltimore, which uses its 311 call center as one source of information for its award-winning CitiStat program. Mayor Martin O'Malley uses complaint rates and many other pieces of data to rigorously track the performance of city departments. Matt Gallagher, CitiStat's director, says Baltimore gets 1 million calls a year from residents. Many of them go to a 311 call center running Motorola's software.

Another difference between public- and private-sector CRM programs stems from citizens' concerns about the government intruding on their lives. For example, federal agencies are generally forbidden to track the online activities of individual visitors to their Web sites. However, Accenture's Sickles says privacy safeguards need not be a show-stopper.

The return on investment is measured differently because CRM is likely to have only an indirect effect on government revenue, if it has any effect at all. But the IRS modernization program is based on the notion that efficient, effective tax collection may help the bottom line.

Goldenberg suggests that taxpayers who have had a good experience in their interactions with the government may be more willing to pay taxes and fees for the services government provides.

Ferris is a freelance writer in Chevy Chase, Md. Contact her at

Special Report

CRM Goes Vertical

Stories in this report:


Copyright © 2004 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon