Public sector plays catch-up on CRM

Local authorities are under pressure from two different directions - facing demands on one side to cut costs but also to improve the service they provide to the public.

And in many cases they are expected to do this with technology many have never used before.

Councils are increasingly adopting customer relations management (CRM) models to find out exactly what customers want. But public sector CRM is developing in quite a different way to its private sector counterpart.

Gartner analyst Ed Thompson said: "In the private sector, CRM is about the value proposal and the profitability of the customer.

"When you say 'value' in the public sector, it's very hard to define. The first thing to say is that it's not really CRM. Very few councils sell things. They do to some degree to get businesses and taxpayers into an area but really it's about customer support."

And Paul Conneely, strategic advisor to the government's Improvement and Development Agency (IDeA) explained: "Rather than technology, it's a philosophy. It should be thought of as a way to make [things] work well for customers. There is no private sector organisation in the world that has as many services as a local authority."

But according to government figures, one-fifth of UK councils are expected to miss the March 2006 deadline set for the Enterprise Workflow National Project (EWNP), aimed at streamlining business processes.

The results of the EWNP so far demonstrate a varied response to the demands to improve social services with technology.

Some authorities have only implemented software to cut phone queues, while others are already in the second round and using their collected data from new systems to improve processes again.

Nick Hewson, MD of analyst firm Hewson, said some improvements have already been noticed: "It's quite right that some good stuff has happened around CRM in the public sector. If you see it as a customer experience or application - a call centre for example - you could argue that some good things have happened."

But councils are still far behind the private sector in their implementation of CRM.

"[Councils] don't have much behind them in integrated data sharing. That has not happened. There is a direct parallel between public and private CRM  - [public] is where [private] was in 1988 when people said 'we've bought all the apps so we've done it'. The process must have gone through integration but I don't think it has occurred in the public sector yet," he said.

But IDeA's Conneely said good work has begun already: "Many of those that have been successful became so because they have taken CRM as a philosophy supported by technology. Change is difficult."

And there is a greater opportunity for sharing experiences in the public sector, he added: "The public sector is more transparent and people are held accountable, which is the way it should be. A lot of this is about authorities learning from each other."

Gartner's Thompson said while the UK's e-government programme has a number of faults, it is still the best in Europe: "It's still better than the rest of the EU. But if you look at an average council, they'll have 70 to 100 services on offer, but only five to 15 of them are online. It's not universal at all and tends to be reactive to a bad audit report."