How government CRM tools are addressing complex public sector needs

Nishant Shah, Senior Analyst, Government Technology

Stories about frustrating experiences with government agencies abound. Typically, they are due to a combination of service delivery failure, lack of transparency, and inadequate communication. Fortunately, many governments are beginning to address these issues with a greater sense of urgency. The need for action is being manifested in new policy and an operational focus on better service delivery globally, with customer relationship management (CRM) tools as integral as ever.

Ovum’s recently published Decision Matrix, Ovum Decision Matrix: Selecting a CRM for Constituent Service and Case Management in Government, examines the competitive dynamics for CRM in the public sector market and analyzes six leading software application suites to inform agencies’ selection processes.

With a focus on civilian and administrative agencies such as tax/revenue, immigration, and health/human services, it expounds the topics discussed here with rankings and detailed evaluations of Oracle, KANA, SAP, Salesforce.com, and Microsoft products using three major criteria: innovation/government strategy, solution assessment, and market impact.

Government CRM needs differ substantially from other industries

CRM for government is composed of the systems, software, and methodologies for managing, measuring, analyzing, automating, and otherwise facilitating an agency’s interactions with constituents. It is critical to the management of the agency’s customer experience (CX).

As Ovum analyst Jeremy Cox notes: “Although the CRM vision may encompass CX, no single CRM system is sufficient alone to provide the all-channel, context-aware personalized customer experience demanded today.” It is therefore also a hub for recording, analyzing, leveraging, and sharing customer transactions and interactions, which is fed by adjacent systems to provide one complete view of the customer.

CRM for government is often significantly more complex than CRM for the private sector, for a variety of reasons:

  • The citizen can be both a part of the government and a customer, with changing roles in their relation to the public sector.
  • There are vastly more silos in existence that need to be addressed in large governments, across a variety of regional levels, compared to companies – making “one view of the customer” much tougher to achieve.
  • Given the lack of a profit motive, metrics tracking success and return on investment (ROI) for CRM systems are more difficult to define in government than in the private sector.
  • There are a bevy of regulations, standards, and policies governing security, collection/use of data, and procurement of systems that exist in government but not in the private sector.

Demand for CRM solutions in government remains strong

Despite CRM being a relatively mature market, it is still one of the enterprise applications most invested in. Ovum’s recent ICT Enterprise Insights survey, for example, shows CRM as the second-highest non-defense investment priority globally in government. It is behind only web-based self-service, which is also a key part of the “customer-adaptive enterprise” vision.

At the city level, CRM that fits into a broader CX strategy differentiates municipalities much like it differentiates businesses: a highly connected all-channel experience is difficult to copy and therefore a competitive advantage, delivering significant benefits to the citizen, improving quality of life, and drawing more investment and a stronger workforce. Commercial off-the-shelf (COTS) solutions as a preferred route are gaining popularity in government, given their cost benefits and time to value. This is increasingly true not only for simpler projects but also for those addressing more complex business needs.

Different agencies require significantly different types of solutions

Among agencies there is a broad variation in available budgets, levels of workforce sophistication, and CRM use cases. CRM is not a new idea, so many agencies tend to already have well-defined requests for proposals (RFPs) and expectations during procurement. For the competitive landscape, this means a trend toward greater flexibility of deployment models and offerings, with a variety of go-to-market strategies and a stronger focus on solution usability. In our report we note what type of agencies each solution suite is best suited to, as an important addendum to the overall rankings.

The lack of market followers among the vendors evaluated, rare in Ovum Decision Matrices, as well as the number of market leaders, shows the strength and increasing maturity of case management and constituent service functionality within the CRM offerings reviewed. Indeed, the highly clustered nature of solutions on our matrix – on a scale of 1–10, the aggregate scores for all the vendors fall between six and eight – clearly shows the increasing convergence of the CRM market.

Relatively small differences therefore mean quite a bit in the purchase decision, particularly in the areas of integration, analytics, user interface (UI), professional services offerings, channel strength, workflow automation, and available partnerships, as well as intangibles such as existing social proof in agencies.

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