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The Benefits of CRM 0


TABLE OF CONTENTS

1. Introduction to this Guide 2

2. What is CRM? 3

3. What is the CRM National Project? 4

4. Why should I be interested in CRM? 5 4.1 Delivery of cost reduction and efficiency savings 5 4.2 Service improvement & added value 7 4.3 Meeting e-Government targets 9

5. What is the scale of benefits for my authority? 10

6. What level of investment is likely to be required? 11

7. The CRM National Project can help delivery of CRM 11

8. What drives success? 12

9. Key Risks 13

10. How does CRM fit in with the other National Projects? 14

11. Where can I get further information? 14

Appendix 1: Detailed CRM Benefits and Metrics 15

Appendix 2: Detailed CRM National Project Product Listing 21

Capgemini was commissioned to quantify the benefits of six National Projects. Their findings are based on the experiences of the local authorities engaged in implementing these solutions, providing a sample for analysis from which reasoned conclusions have been drawn and validated with local authorities and their suppliers. See www.localegovnp.org.uk/benefits


1. Introduction to this Guide Over half of English local authorities have already implemented or are planning to implement CRM - demonstrating that CRM is high on the agenda of many local authorities. The primary driver for a CRM implementation tends to be not efficiency savings but improvement in customer service. However, when accompanied by cultural and process changes, CRM delivers both improved customer service and transactional efficiency savings. Early indications from implementing authorities suggest that, at a national level, some £100m of transaction savings are on offer. In addition, and depending on how and where CRM is implemented, £195-650m of added-value benefits can be derived. This guide is one of a series describing the benefits of the e-Government National Projects programme funded by the Office of the Deputy Prime Minister. The guides are aimed primarily at local authority staff needing a succinct summary of what each of the projects is about and what benefits local authorities can expect to gain from implementing different aspects of local e-Government. This initial report sets out how to identify the potential benefits from CRM and how to go about extracting the benefits that CRM solutions offer. Further data on benefits, reflecting the findings of continuing in-depth studies with a range of local authorities by the CRM National Project, will be released in winter 2004/2005. CRM can form a central backbone to an authority’s service improvement drive. It is only one of a portfolio of national eGovernment solutions supported by ODPM projects. Figure 1 shows the entire programme of National Projects. Authorities are recommended to assess which other projects may add further value to them, and access the appropriate collateral. Figure 1: Local e-Government National Projects

e-Citizene-Benefitse-Benefits CRMCRMDigi-tv

FAME

NOMADLAWs

Information and Knowledge Sharing

Process and Content

Customer and Channels

KM Valuebill

RYOGENSe-Standards Body

Smartcards Working With Business

e-Trading Standards

e-Fire e-Pay

Encore

PARSOL

e-Procurement

Workflow

e-Democracy Schools Admissions

The ODPM e-Government National Projects Portfolio

e-Citizene-Benefitse-Benefits CRMCRMDigi-tv

FAME

NOMADLAWs

Information and Knowledge Sharing

Process and Content

Customer and Channels

KM Valuebill

RYOGENSe-Standards Body

Smartcards Working With Business

e-Trading Standards

e-Fire e-Pay

Encore

PARSOL

e-Procurement

Workflow

e-Democracy Schools Admissions

The ODPM e-Government National Projects Portfolio


2. What is CRM? CRM stands for Customer Relationship Management. The customer, in this case, can be a citizen, business representative, intermediary or partner. CRM is the discipline of improving the way customers are managed through changes in business processes, people, organisation and technology. The key drivers for a CRM programme within the public sector tend to be the improvement of services to citizens, together with some real expectation of improving the efficiency and the effectiveness of the organisation. Other drivers could be to focus limited resources on those in most need or to maximise revenue from customer facing activities. Improvements in customer service from CRM can range from a more rapid and focused response to enquiries through to proactive contacts with customers to anticipate and manage potential issues. CRM is a key enabler for customers wishing to access local government services, improving the efficiency of traditional channels i.e. phone, face to face, and mail and providing innovative channels such as Internet, SMS and DigiTV. The central component of a CRM solution is generally the creation of a single shared customer database – allowing information to be collected once but used many times. The sharing of this customer data across the authority, in conjunction with the functional tools provided by a CRM solution, allows the authority to make gains in both efficiency and effectiveness e.g. by improving the ability of front line staff to resolve issues at first contact or dealing automatically with enquiries that originate over the web. CRM is often seen as consisting of a number of layers, connecting customers through to front and back office and possibly third parties as shown in the diagram below:

Figure 2: Understanding the Components of CRM

High Peak District Council

High Peak implemented CRM to improve access to customers, provide more consistent service and ensure value-for-money within the front office. The implementation benefited from strong senior management sponsorship. Based on findings from citizens’ panels, the initial focus was on a call centre, including merging of switchboards. The scope of the services covered by CRM has been increased in a stepped fashion over the last two years to 400 service request processes, at each stage carrying out a review to see how the efficiency of the processes can be improved. Services assimilated include Environmental Health, Council Tax and Housing Benefits. Opening hours have been extended without taking on additional staff. Integration to back office systems is being achieved for Environmental Services with associated process savings, and further services are being actively considered.

Key Lesson: Implement CRM incrementally

Front Office

Contractors PoliceGovernment

AgenciesConsultees/

ExpertsExternal

Agencies

BackOffice

Third Parties(examples)

Self -Help: On-line

Workstation

One-Stop-Shop/Service Pt

CRM

Contact Centre (CC)

CRM

Workstation

FAXFAX

In personWhite Mail Telephone EmailFax SMS

Consistent service

Field-Based

PDA

Office -Based

Workstation

Web

Fax

Integration

Laptop

Channels Otherfuture

channelsSMS

Consistent service

Field-Based

PDA

Office -Based

Workstation

Web

Fax

Integration

Laptop


channels

Workstation

Web

Fax

Integration

Laptop


channels

CRM Overview


CRM projects can vary considerably in their scale and scope. A simple CRM implementation may encompass a single Contact Centre or website supported by standardised forms and documentation, with no integration to back office systems. A more complex implementation can include a common customer database, a content management tool (to ensure consistent information is published through all channels), provision of new communications channels (PDAs, kiosks or even Digital TV), a document management system (to improve the speed and accuracy of handling of paper applications) and integration with, and redesign of, back office processes and systems. The CRM National Project has identified two common strategies for implementing CRM in local authorities – wide and shallow, offering a broad range of services to customers through a single point of contact, with (initially) little back-office integration, and narrow and deep, offering a selected number of services but with full back-office integration. CRM has been implemented through partnerships with other local authorities, with private companies and with other public bodies. There are several examples of county councils and district councils working together to provide a single point of contact for citizens for all council issues.

3. What is the CRM National Project?

The CRM National Project was set up to bring clarity to the role of CRM within local authorities and to provide practical guidance. The CRM National Project has developed a portfolio of models, frameworks and standards to assist local authorities in implementing CRM. These include:

• Guidelines for authorities through the entire transformational phase from developing the vision “by changing what we think about services” to implementation and integration of a CRM system.

• Business case models for estimating the benefits of the CRM.

• Guidance on data sharing, IT integration, system specifications and user requirements (since CRM is underpinned by data sharing).

• Legal compliance standards for ensuring that authorities comply with the relevant laws.

West Sussex Accessible Services Partnership

CRM is being introduced by West Sussex County Council in partnership with seven borough and district councils. A goal is to support a single view of customers across different authorities, through the creation of a single logical database. There will be shared one-stop-shops (branded as Help Points). In addition the CRM system will support a call centre for West Sussex County Council, providing the opportunity for a shared telephone contact centre if there was agreement to do this at a later date.

Key Lesson: Think partnership potential

Surrey County Council

An important milestone in Surrey’s gradual journey towards maturity of its customer service initiative was the development of a contact centre. The Customer First team and frontline services jointly identified the appropriate role for the contact centre, ensuring that the customer facing processes were working well and assessed the costs and benefits associated with the service. The Customer First approach has been ‘low tech’, a pragmatic decision having been made to invest in people rather than spend on technology. All cycle times have been reduced by at least half. Improvements include a reduction in time from asking for a Blue Badge to receiving it from 27 days to 1. 80% of queries are now resolved on first contact and satisfaction level of customers is about 96%.

Key Lesson: Invest in People not just Technology


4. Why should I be interested in CRM? You should be interested in CRM because it 1. Delivers cost reductions and efficiency savings 2. Offers service improvements and added value 3. Delivers strategic and intangible benefits e.g. helping authorities to meet e-Government targets

CRM delivers considerably more benefits than those simply associated with transactional savings and efficiency improvements. Substantial added value results from improvements to service. There are other areas where clear benefit potential can be seen but where it is not sensible to quantify savings. Benefits associated with CRM are summarised by type in the following diagram: Figure 3: CRM Benefit Types Note that although there will be some immediate benefits from the implementation of CRM, benefits will increase over time, with full benefits likely to be realised after 3-5 years.

4.1 Delivery of cost reduction and efficiency savings The implementation of CRM solutions in local authorities enables potential savings through more efficient use of resources for example:

• Consolidation of contact centre/front-office operations

• More productive time on customer facing activities and more productive staff time.

• Insights into the drivers of calls, and therefore ideas for call avoidance

The increase in productive time results from reduced errors and rework due to consistent information and data capture, increased speed of access of information and more effective ‘one-and-done’.

Efficiency savings alone are rarely sufficient to make a really compelling case for CRM. Efficiency savings and service improvement are frequently linked. For example, if you can migrate 10% of your calls to the web, you could reduce unit cost, but if a further 20% of calls were previously being abandoned, you may choose to service these calls. The result would be an improvement in service but a reduction in the efficiency saving.

Knowsley Metropolitan Borough Council

Knowsley has realised savings in excess of £150,000 p.a. from its CRM implementation in the two impacted service areas – Revenues and Benefits and Council-wide bookings. The savings have arisen from the elimination, automation, improvement and combination of processes.

Knowsley adopted a structured approach to identifying, documenting and agreeing business process improvements and was able to prioritise and phase CRM functionality based on realisation of identified benefits.

Ongoing work includes improving the CRM infrastructure, optimising system performance, enhancing electronic forms, providing additional training and back office integration and expanding the CRM footprint to other service areas such as Social Services.

Key Lesson: Take the opportunity to rethink processes

Service Improvement / Added ValueCost Reduction and Efficiency Savings

Increased RevenueAll figures are £m

* = no quantitative evidence

Improved public perception and awareness of services

More effective production and use of management information

Improved customer satisfaction and response time

More cost effective use of channels

Reduced cost per resolved transactions

CRM

Other Cost Reduction

Transactional / Process

Service Improvement

Strategic / Intangible Benefits

Service Improvement / Added ValueCost Reduction and Efficiency Savings

Increased RevenueAll figures are £m

* = no quantitative evidence

Improved public perception and awareness of services

More effective production and use of management information

Improved customer satisfaction and response time

More cost effective use of channels

Reduced cost per resolved transactions

CRM

Other Cost Reduction

Transactional / Process

Service Improvement

Strategic / Intangible Benefits

49–146 * 195-650

SIGNIFICANT MODESTHIGH


Anecdotally, it is common for the number of transactions to increase after the implementation of CRM by as much as 30%. This is because of latent demand - customers are now receiving a better service and hence are more willing to contact the authority. The following table summarises indicative cost reduction and efficiency savings for an individual authority and for all English authorities. When planning implemention of a CRM solution, benefits will need to be validated through a specific business case for an authority. National Annual Cost Reduction & Efficiency Savings1

Low (£m)

Average (£m)

High (£m)

National Total: All Authorities 49 97 146

Per Local Authority Annual Cost Reduction & Efficiency Savings

Low (£k)

Average (£k)

High (£k)

County 82 163 245

Unitary 228 457 685

District 83 166 249 Prior to implementing a CRM solution, it is essential for a local authority to establish a baseline against which financial and non-financial benefits can be measured. Otherwise it is extremely difficult to monitor the level of benefits that are derived over time. Figure 4 provides an example of a model that can be used to consider financial benefits. The CRM National Project is also developing a CRM Benefits Calculator. Figure 4: Benefits Logic for CRM

1 The financial efficiency savings were calculated using CIPFA data, which provides cost of handling transactions in different service areas in a sample of local authorities. Average transaction costs were calculated separately for county, unitary and district councils and an average saving of 20% assumed. Estimated savings were cross-checked against a range of typical CRM solution implementations in the public and private sector.

Number and type of Back office

Staff

Cost of current Contract Staff

% Reduction in Processing Time

% Reduction in Follow -up Calls

Release of Staff Time

% Increase Integrated

Transactions

% Take-up of Additional Services

Cost of current Back office Staff

Average Cost of Back office Staff

Number and type of Contact Staff

Drivers of Cost Quantification

Types of Financial Saving

Where do the Benefits apply?

More Productive Time on Cust

Facing Activities

Earlier Cash Collection

Better Targeting of Benefits and

Services

Revenue Generation

Use of Cheaper Channels

More Productive Staff

Reduced Transaction time

(Admin)

Reduced No of Transactions

(Admin)

EducationEducation

Environmental Health Environmental Health

Highways Highways

LeisureLeisure

Social ServicesSocial Services

LibraryLibrary

Waste MgmtWaste Mgmt

Housing CostsHousing

Council TaxCouncil Tax

PlanningPlanning

Drivers of Cost(examples)

QuantificationTypes of Financial Saving

Where do the Benefits apply?

Housing Benefitpayment enquiries

More Productive Time on Cust

Facing Activities

Earlier Cash Collection

Better Targeting of Benefits and

Services

Revenue Generation

Use of Cheaper Channels

More Productive Staff

Reduced Transaction time

(Admin)

Reduced No of Transactions

(Admin)

Council tax payment change of

standing order

Request for information from

Trading Standards

Citizen service delivery complaint

Average Cost of Contract Staff

CRM Benefits Assessment Model


4.2 Service improvement & added value CRM delivers a wide range of ‘soft’ and hard benefits in addition to the financial savings described above. These are shown in figure 5 (and in Appendix 1). A key enabler provided by CRM is the effective, real-time generation of information about local authority customer requirements, behaviours and usage of service. This allows a local authority to provide better targetted and more efficient services to its community. Figure 5: Categorisation of CRM Benefits

Clear and powerful evidence of quantifiable, non-financial benefits achieved and documented by local authorities that have already implemented CRM solutions 2 is shown below:

2 Sourced from two London local authorities.

London Borough of Newham

The Newham CRM project, having started in 1996, has developed 8 local service centres. A telephone service supports housing repairs, environmental services, social services and education (awards and admissions). The project is currently developing a still broader service base, whilst also pushing deeper into back-office functionality. 1.5m transactions are handled p.a.

The underpinning common customer-tracking database has enabled decisions to be made based on newly available management information. For example information on usage of late night and Saturday openings allowed Newham to reduce out of hours staffing.

Key Lesson: Management information provides a key lever for improvement

Quantifiable

Fin

anci

al

Yes

Yes

No

No

Service Improvement/ Added Value• Improved customer satisfaction

• Improved customer response

• Use of new, more effective channels

• Improved BVPI

Strategic & Intangible Benefits• Improved public perception

• Increased awareness of quality of local services

• Improved information about citizens and authority customers

• Catalyst for organisational change

Service Improvement/ Added Value• Services delivered more effectively across the

organisation

•Development of re-usable skills

•Enterprise-wide processing of information

• More efficient production and effective use of MI

• Use of MI for predictive management of services

• Earlier cash collection

Cost Reduction & Efficiency Savings• Increase in number of queries resolved first time

• Reduction in repeat calls

• More cost-effective use of channels

• Queries quickly directed to subject matter experts (improved use of resources)

• Single team of customer facing council staff (greater efficiency across entire council)

CRM Benefits Matrix


Service Improvement Performance Measure Impact of CRM

Improved customer satisfaction

Monthly Customer Satisfaction Survey statistics3

Increased to more than 96% over a higher volume of increased contacts

Improved BVPI 157 BVPI 157 Increased from 46% - 50%

Calls answered within 15 seconds

Increased from 60% to 89%

Number of Abandoned Calls A decrease from 5% to 2%

Improved customer response to incoming contact centre calls 4

Average call waiting time Decreased from 20 seconds to 5 seconds

Increased call volume through contact centre

An increase from 950,000 calls to 1,500,000 calls p.a. (approx 66%)

Increase in email enquiries An increase of 4,000 to 6,000 p.a. (approx 66%)

Change in peoples behaviour – increased use of new technology channels

Voicemail An increase of 20,000 to 30,000 p.a. (approx 80%)

Change in peoples behaviour – decreased use of old channels

Visitors to Local Service Centres

Decreased by 10%

Whereas transaction efficiencies can be estimated based on statistical evidence from publicly available data, the value added by service improvement is best addressed by developing ‘scenarios’. The following table summarises indicative value added for all English authorities and includes values associated with customer satisfaction, back-office integration, use of new channels, lost calls and customer waiting time. There will also be additional significant value resulting from associated business change activities. National Annual Value Added Through Service Improvement

Low (£m)

Average (£m)

High (£m)

National Total: All Authorities 195 425 650

3 Independently validated by MORI. 4 Figures extracted from CRM Shareware application and monitored since the implementation of CRM

Uses of Management Information

Management information generated by a CRM system can be used for example for:

• Performance management (e.g. calls per day/hour)

• Resource planning (e.g. best opening times by office/centre)

• Cross service charging and interactions (e.g. allocating costs within a multi-agency operation, based on number of enquires; and looking at the complete service to the citizen rather than a individuals who claim Housing Benefit or pay Council Tax)

• Forecasting and Prediction (e.g. establishing which are the busy periods of the year and why; and establishing links between patterns of enquiries to provide portfolio solutions)

• Incident Hotspot Detection (e.g. bogus/duplicate claims and abandoned vehicles)


4.3 Meeting e-Government targets

CRM can play a major role in enabling a local authority to meet strategic objectives and e-Government targets:

• Comprehensive Performance Assessment (CPA): CRM, with its focus on delivering services to customers at a time and place of their choice, can enable the authorities to achieve high CPA ratings.

• Priority Service Outcomes (PSOs): CRM “makes it easier for customers to do business with the local authority” – a specific priority service area. In addition, components of CRM, e.g. customer database, customer tracking and shared call centre, are identified by IDeA as contributing to PSOs in the remaining priority service areas.

• National Strategy (and ODPM National Strategy for local e-Government priority areas): CRM plays a major role in transforming services and improving local authority efficiency. It also contributes to the other priority service areas.

• Efficiency Review: The efficiency review produced by Sir Peter Gershon in July 2004 is focused on releasing resources to the front line by integrating back office and improving transactional services – both areas encompassed by CRM.

Government targets require each local authority to deliver 100% of its services, which can be e-enabled legally, through electronic media by 2005. Implementation of CRM involves integration of back office with the front office, a requirement for e-enablement of transactional services.

Figure 6: CRM in Support of Performance Improvement and Meeting Government Targets

Westminster - On Track for Deadlines

Westminster City Council covers just 8.5 square miles, but it is home to 230,000 people – including royalty, government and diplomats. Its area includes 110,000 properties, among them many famous London landmarks, theatres and shops and leisure facilities.

The council aims to achieve 100% electronic service delivery by the end of 2004/5 – a year ahead of the government deadline. It has a 200-seat contact centre and three one-stop shops.

Westminster’s CRM solution is transforming interactions between the community and the council.

Within the first 6 months of CRM in Westminster’s contact centre, Westminster has achieved some impressive results. The contact centre front line staff are able to deal with queries relating to 66 different services. 94% of callers are answered on their first attempt by the contact centre, with 80% of queries resolved in one telephone call. 90% of callers say that they are satisfied with the service.

Key Lesson: CRM comprehensively supports delivery of Government targets

CPA Framework Priority Service Outcomes Efficiency Programme National Strategy

•Corporate Assessment

Ambition

Prioritisation

Capacity

Performance Management

•Achievement and Investment

Safer & Stronger Communities

Sustainable Communities and transport

Healthier Communities (not districts)

Children and Young People (not districts)

Use of Resources

Schools

Community Information

Democratic Renewal

Local Environment

E-Procurement

Payments

Libraries, Sports & Leisure

Transport

Benefits

Support for Vulnerable People

Supporting New Ways of Working

Accessibility of Services

High Take-up of Web-based Transactional Services

Making it Easy to do Business with the Council

Transactions

Corporate Services

Procurement

Policy Funding and Regulation

Productive Time

Transforming Services

Renewing Local Democracy

Promoting Economic Vitality

Bridging the Digital Divide –e-Inclusion

Efficiency

“Liveability”/ Environmental Quality

BVPI 157

High Benefit Medium Benefit

Lower Benefit N/A

Key

CRM in Support of Meeting Government Targets

CPA Framework Priority Service Outcomes Efficiency Programme National Strategy

•Corporate Assessment

Ambition

Prioritisation

Capacity

Performance Management

•Achievement and Investment

Safer & Stronger Communities

Sustainable Communities and transport

Healthier Communities (not districts)

Children and Young People (not districts)

Use of Resources

Schools

Community Information

Democratic Renewal

Local Environment

E-Procurement

Payments

Libraries, Sports & Leisure

Transport

Benefits

Support for Vulnerable People

Supporting New Ways of Working

Accessibility of Services

High Take-up of Web-based Transactional Services

Making it Easy to do Business with the Council

Transactions

Corporate Services

Procurement

Policy Funding and Regulation

Productive Time

Transforming Services

Renewing Local Democracy

Promoting Economic Vitality

Bridging the Digital Divide –e-Inclusion

Efficiency

“Liveability”/ Environmental Quality

BVPI 157


Lower Benefit N/A

Key


Lower Benefit N/A

Key

CRM in Support of Meeting Government Targets


5. What is the scale of benefits for my authority? The size of financial benefits attained by an individual authority will be determined by a number of characteristics. Authorities are recommended to review the characteristics in the following table to assess if and how they can maximise benefits from adopting CRM.

Characteristic Level of Benefit Opportunity

High Low Size of local authority and demographic profile

Large authority with better off population - large volumes of simple transactions provide a good opportunity for leveraging consolidation.

Small rural communities – benefit delivered will be primarily better customer experience through easier and greater accessibility to the authority, rather than financial savings for the local authority.

Technology Capability

Capability to implement new technology is high or evolving. Indicators will include:

• Well defined and evidence-based business case for proposed CRM solution

• Good technical and business knowledge of CRM solutions and vendors

• Visibility and understanding of the current performance of technology solution and Management Information across the local authority

Capability to implement new technology is low. Indicators will include:

• Insufficient budget to design, build, test, implement and support.

• Insufficiently skilled IT resources • Insufficient underst anding of current IT infrastructure

and existing applications

Organisational and Change Management Capability

The right resources and capability to bring about necessary organisational change management. Indicators will include:

• Visible support from key stakeholders, with open and proactive communication across the authority

• Dedicated and empowered project team(s) with clear roles and responsibilities

• Clear understanding of the benefits of change and ability to communicate to staff and customers

• One political agenda

Little capability to implement CRM solutions and bring about organisational change. Indicators will include:

• Minimal or no stakeholder buy-in across all services • Inability to identify and appoint appropriate change

managers • Inability to appoint dedicated appropriately skilled

project management team to support change programme

• Barriers to providing sufficient budget for change programme

• Unworkable bureaucratic processes

Change Readiness Acceptance of move to new ways of working and technology . Indicators will include:

• Citizen feedback indicating a requirement for change and contact methods

• Acceptance by staff that new technology and processes will enable a better and more efficient provision of service

• Reluctance to move to new ways of workin g and technology by

− Local community

− Local authority staff

Well-integrated front office services

The right resources and capability to bring about necessary organisational change management. Indicators will include:

• Visible support from key stakeholders, with open and proactive communication across the authority

• Dedicated and empowered project team(s) with clear roles and responsibilities

• Clear understanding of the benefits of change and ability to communicate to staff and customers

• One political agenda

Little capability to implement CRM solutions and bring about organisational change. Indicators will include:

• Minimal or no stakeholder buy-in across all services • Inability to identify and appoint appropriate change

managers • Inability to appoint dedicated appropriately skilled

project management team to support change programme

• Barriers to providing sufficient budget to change programme

• Unworkable bureaucratic processes

Well-developed back office processes

Front office offers a poorly integrated service. Indicators will include:

• Many siloed points of contact e.g. multiple phone numbers, several contact centres

• High levels of customer dissatisfaction • Long queues and waiting times (either physically or

virtually) • High abandon rates

Front office offers an est ablished well-integrated service. Indicators will include:

• Single access point of contact e.g. one telephone number

• Front office offers access to multiple services seamlessly

• Satellite sites are integrated with central service centres


6. What level of investment is likely to be required?

The cost of implementing a CRM solution will vary widely , depending on scope, scale and complexity. A recent report stated that costs could vary from £600 to in excess of £8,000 per seat5. However costs are reducing as the market matures and technology develops.

Some typical cost drivers for a CRM solution are:

• Scope of the solution in terms of functionality and Departments covered

• Number of seats

• Level software costs, networks and communications

• Number of locations/sites

• Number of different service areas

• Level of business process re-engineering required

• Extent of required systems configuration

• Extent of integration with legacy systems

• New hardware requirements

• Change management requirements, including training, recruitment and communications

• Number of required skilled staff

• The quality of existing data

Additionally there will be costs associated with implementation activities e.g. testing and data transfer. The table below provides a simplified example of the indicative costs involved in the implementation of a local authority contact centre and CRM application of varying size.

CRM Programme Component Indicative Costs (£k)

Front Office CRM implementation & contact centre 6

20 seats 60 seats 120 seats

Implementation cost per centre 800 1,500 2,400

The costs could be two to three times the figures above for a more complex CRM implementation (see figures 2 and 8) including for example a content management tool, workflow, provision of new communications channels, a document management system, redesign of back office processes and integration to back office systems. The benefits could be expected to increase proportionately.

7. The CRM National Project can help delivery of CRM

The CRM National Project has developed and published a range of toolkits and guidelines to support local authorities through the stages of a CRM implementation from visioning, through development

5 “Making a compelling business case for CRM”, Hewson Consulting Group 6 Example is based on costs provided by an average size county council. The contact centre deals with transactions covering 7 core services and 230 business processes. In a small 20-seat contact centre, it is assumed that a CRM customer database would not be implemented, as the implementation costs could not be justified. It is assumed that implementation costs are over 1 year only. No estimates have been included for recruitment or ongoing maintenance.


of the business case and technology approach, to implementation and benefits realisation. A high level view of these products is shown below.

Figure 7:High Level View of Products Published by the CRM National Project to Assist Delivery Piloting authorities have found both these products and experience sharing of great value. Further details of how the products map against the expanded CRM lifecycle are given in Appendix 2. The products are available to download via the CRM National Project’s website: http://www.crmacademy.org

8. What drives success? When planning the implementation of a CRM solution, the CRM Programme Manager should consider both critical success factors and key risks. The following questions will help to establish whether the critical success factors are in place. This list is not exhaustive:

• Is there a genuine customer focus within the authority? Is customer service seen as a key element of what the local authority does?

• Is there a coherent, cross-authority vision for CRM which engages department heads and customer-facing staff?

• What is the strategy and roadmap for achieving that vision? How long is the journey? What are the key milestones?

• Is there an evidence-based understanding of how customers want to interact with the local authority? What channels are required (Internet, text messaging, DigiTV) and what services do customers wish to access?

Salford City Council

The development of the customer services function in Salford has been ‘about building a culture of customer service professionalism’. The council made a strategic decision to create a separate Customer Services Division and develop an in-house CRM package, ‘Citizen’. The division adopted an incremental approach, adding one service at a time. Each time a service was added, the division took over both the front-office functionality and staff from the associated service directorate. The service was then subjected to process re-engineering, thus delivering better front-end services in conjunction with more efficient back-office processes. An important point of principle is that employees volunteer to leave their old organisational unit and join Customer Services. The success of CRM in Salford is reflected in a satisfaction level among customers and staff of more than 90%.

Key Lesson: Focus on change and people

• Introduction to CRM

• CRM Vision

• CRM Roadmap

• CRM Scan Reports

• E-Survey Report

• Maturity Self -Help Tool

• CRM Business Case

• CRM Business Specification

• CRM User Requirements Specification

• CRM System Functional Specification

• CRM Support and Operation Guidelines

• Contact Centre Guide

• Legacy Transaction Matrix

• CRM Integration Guide

• CRM Application Integration Adapters

• Implementation Strategies and Routes

• Supplier Details Database

• Integration Management Summary Guide

• E-Gov Data Model

• Integration Assessment Toolkit

• Channel Design

• Change Management Toolkit

• CRM Benefits Realisation & ROI

Vision Business Case Implementation BenefitsRealisation

CRM Products mapped against the Project Life-cycle


• How will the organisation and individual job roles change? Is there a formal change management plan?

• Is there a current performance baseline against which changes and improvements can be measured? If not, do you understand what is needed to build one?

9. Key Risks All projects which involve organisational, people and technology change face a number of well-documented risks, which must be identified, monitored and mitigated, throughout the life of the project. However, a CRM implementation project is subject to specific risks due to its complex nature. Some of the key risks that need to be considered are:

• Insufficient Stakeholder Management. The implementation of CRM requires the involvement and buy-in across the organisation to ensure success. There is rarely one single sponsor of CRM. Ownership is typically shared by several Departmental Directors, who each have their own financial and non-financial targets.

• Failure to Recognise the Degree of Change Involved. The implementation of CRM requires substantial process and skill change to deliver benefit. Cultural change is also likely to be required.

• Lack of Measurement of Benefits . Delivered benefits need to be measured over the duration of the project. It will be essential to demonstrate some quick wins to ensure that all stakeholders remain committed and engaged. It is also necessary to report on and adhere to one or two tried and tested metrics that can demonstrate the service is improving, once accurate baseline measuremements have been established. It is important to note that, following many CRM implementations, service levels often deteriorate temporarily while the technology and processes are bedding in.

• Scope Creep. CRM projects are often the casualty of an ever-creeping scope, because the organisation is tempted to add on ‘nice to have’ requirements to keep improving the customer experience. Improvement to customer experience must be done in a controlled, focussed and planned way to avoid scope creep and overstretching of limited resources.


10. How does CRM fit in with the other National Projects?

The CRM National Project is related to a number of other National Projects. It is important to take these interdependencies into account to optimise costs and benefits over time. Figure 8 illustrates these linkages, presented in the context of an overall reference Services (technology) Architecture. It is recommended that authorities implementing CRM should familiarise themselves with the scope and products of related National Projects. Figure 8: CRM linkages with other National Projects

11. Where can I get further information? Following the substantial demand for its products, the CRM National Project launched the CRM Academy in March 2004 to provide toolkits, models and standards for planning and implementing CRM in local authorities. These are available for from the CRM Academy website http://www.crmacademy.org. In addition the CRM Project team can be contacted for further information at +44 (0)20 8430 2111 or [email protected] A website providing information about all the National Projects is available at: http://www.localegovnp.org.uk

Supporting Services

Utility Services

Data Services

Channels

User Services

Schools

Admissions/

Pan London

PARSOL

Valuebill

RYOGENS

e-Fire e-Democracy

e-Benefits

e-Trading

Standards

Working

With

Business

Knowledge

ManagementFAMEe-Pay e-Citizen

ERPGIS

RDMS

e-

Procurement

ENCORE

Content

Managemente.Mail Workflow

Security

Go

vernan

ce

SmartCards

DigiTV

LAWs

NOMAD

e-Stan

dard

s

CRMCRM

Key: Major link with other National ProjectMinor link with other National Project

CRM and Inter-dependencies with other National Projects

Diagram based on Services Reference Architecture Model


Appendix 1: Detailed CRM Benefits and Metrics The following table includes a detailed list of suggested benefits (and associated metrics) for CRM components. They are listed by ODPM national strategy for e-Government priority area. They include the cost reduction and efficiency savings and service improvements built into the indicative savings and value added figures within the body of the guide, together with strategic and intangible benefits.

Benefit Category Benefits Metrics

1. Consistent quality of service and improved customer experience over time, through any channel

• Regular eliciting of feedback from service users. Service satisfaction survey broken down by channel

• Monitoring of service metrics over time: targets for response time, complaints, number of first-time service request resolutions

2. More frequent meeting of citizen and business expectations

• Reduction in number of complaints from citizens and business

• Survey of customer satisfaction indicating an increase in satisfaction level

• Tracking of regular feedback from specific customer segments (citizens, business and sub-segments thereof)

3. Improvement in satisfying 'access choices' on the part of clients

• Number of multi-channel engagements satisfied and enabled by CRM implementation (e.g. access by phone requesting letter response fulfilled)

• Scenario testing - for example by life event

4. Enablement of the provision of service from any public access point e.g. library

• Number of services available through each channel and each physical location

• % of service requests / interactions resolved first time; reduction in service redirects (e.g. County to District)

Service quality

• Quick/easy/joined up service

• Personalized services meeting expectations of citizens

• Accessible service

5. Capturing of feedback from customers, enabling the authority to track and improve service quality, for example by proactively targeting services at appropriate customers, based on insights gained from service history

• Evidence of data capture, analysis and subsequent action/change in service design: continuous improvement. Evidence of proactive targeting of services to segments and individuals.



6. Enablement of the provision of service from the channel, location and time chosen by the customer: rationalized service access

• Scenario testing based on a basket of services in CRM and non-CRM enabled locations. Number of (transactional) services available through each channel.

1. Simplified access to and understanding of regulatory requirement; reduced bureaucratic burden for business (compliance time / resources required)

• Comparative analysis of time spent obtaining licences and permissions

• Business perception tracking of authority effectiveness

• Cycle time from the application to issuance of: permissions / licences / advice

2. Development of re-usable information literacy staff skills

• Increase in usage of e-enabled CRM systems by staff, and attendance at training courses such as European Computer Driving License

• Staff attrition / turnover

3. Inward investment activities tailored to sectors based on profiling and market understanding

• Number of new businesses opened

4. Effective targeting of regulatory, licensing and support services, reducing rework and overall compliance burden

• Satisfaction rate of business customers with the council's regulatory, licensing and support services

Economic vitality

• Infrastructure development

• Employment generation

• Skills development

• Simplifying regulatory regime

• Promoting tourism and inward investment

5. Maximises productive time for business by reducing service access and cycle time

• Process comparison / analysis in CRM and non-CRM-enabled environments

1. Development of demographic profiling: identifying the groups of citizens who are 'disengaged'. Profiling citizens helps the council to engage groups in the democratic process by targeting and inviting people to engage based on their interests

• Evidence of the demographic profiling and targeting activities: segmentation and tailoring of outreach activities to segment preferences

Democratic engagement/ inclusion

• Participation in local governance

• Dialogue across and within communities 2. Improved collection and analysis of opinions • Evidence of survey/collection of data on an issue



3. Provision of more accessible routes customers (citizens and local organisations) to have their say

• Increase in number of proposals and suggestions received from the citizens and businesses

• Number of completed survey responses as a percentage of invited participants

4. Improved integration and communication with other agencies

• Volume of CRM enabled interactions between agents in civil society

5. Better access / outreach to all specific target demographic groups e.g. older people, children

• Evidence of targeted outreach engagements enabled / resulting from CRM based data capture

• Involvement in decision-making between elections

6. Increased engagement of citizens through provision of feedback and ongoing dialogue

• Number of communications made to the citizens/businesses compared with number of suggestions: feedback monitoring.

• Survey of citizen groups on perceptions of local authorities

1. Facilitation of back office integration - improving processes and resource efficiency

• Reduction in facilities, overhead and transaction costs

• Reduction in average time in delivery of a basket of service requiring information from 2 or more back offices

2. Improved resource planning and scheduling, based on accurate data collected over time (service trends, for example)

• Reduced overall cost of staffing: change in balance of staffing, working patterns and increase in bespoke, flexible contracting for staff

3. Front line service staff capable of delivering a wider range of services - reducing handoffs and multiple staff interventions

• Number of services staff members who can deliver autonomously

• Process comparison / analysis in CRM and non-CRM-enabled environments: tracking workflow, handovers, dropped calls (in CRM supported call centres), and number of staff involved in delivery of individual services and service clusters

Efficiency

• Same for less

• Reduction in waste

• Value for money

• Effective staff time

4. More effective / efficient balance between front and back office staff

• Change in balance of front to back office staff and reduction in overall administration and staffing costs

• The decrease in average administration spend on cluster of services, and in total



5. Reduction of staff 'level' required to perform end-to-end processes: effective time for specialist and non-specialist staff

• Comparative work activity analysis of staff, staff survey

• Reduction in staff cost for support operations

6. Increased efficiency in the front office: reduction in staff absenteeism and turnover

• Absenteeism and turnover rates. Staff satisfaction survey

7. Improves the capacity of the staff to deliver services independently (e.g. with fewer referrals to management)

• Number of services deliverable by staff

• The reduction in average time per staff member required to deliver a basket of services7

8. Quicker access to information (and ability to work with information in general) for service providers: hence improved responsiveness to clients

• Systems: screen load time and routing; Percentage of time spent in ‘wrap up’ activities; work activity breakdown

9. Integration of information databases leading to more effective (more accurate and quicker) revenue collection

• Increase in revenue collected - e.g. taxes, parking and other penalties

10.Collection and analysis of information supports better channel management: e.g. migration of appropriate customer segments to more efficient access and delivery channels

• Analysis of demand and access patterns by service and over time; reduction in overall cost of maintaining access strategy and service provision

11.Enables self-service for citizens and business (via web forms, for example)

• Change in balance of channel choice by citizens and business and comparison cost of self-serve versus mediated or direct service by authority staff

12.Simplification of access in two tier areas: Counties and Districts

• Reduction in service access denials - i.e. citizens going to DC for a CC service and vice versa

7 Basket of services is similar to a basket of goods in economic sense. The services include the standard services, which are used the most by the citizens and businesses



13.Reduced transaction costs (e.g. Improved flow of information reducing process cycle time)

• Comparative analysis of CRM enabled and non CRM-enabled locations (e.g. e-transactions cost on average 1/8th of the cost of paper transactions)

14. Implementing CRM and DMS and integration with other systems will help improve data integrity and reduce costs attached to returned post (wrong addresses); cost to ‘chase’ citizens

• Cost of postage and rework; number of and time spent on repeat outbound calls

15. Removal of double (or multiple) data entry • Tracking of data entry patterns and processes (and comparison of CRM and non-CRM areas)

1. Consistent access quality through whichever channel is chosen

• The percentage of services used by customers who do not have access to the internet at home

• Evidence of mediated service access enabled by CRM

2. Enablement of better targeting of outreach services

• Evidence of profiling and targeting activities and active invitations by the council to particular groups

Bridging the digital divide – e-Inclusion

e-Access for everyone who ‘needs’ the service

3. Tailored service delivery based on client's preferred choice of channel

• Evidence of channel preferences logged and acted upon

• Percentage increase in the number of citizens choosing internet access



1. Enablement of the identification and analysis of hot spots of crime, environmental and other issues based on accurate data (based on customer complaints and service requests (e.g. abandoned cars), and effective targeting of resources

• Evidence of resource allocation on the basis of analysis of the identification of hot spots: evidence based policy making and resource allocation

2. Improvement in speed and responsiveness of environmental services

• Decrease in time for removal of abandoned vehicles and other environmental services (cycle / response time) (e.g. Newcastle EnviroCall service centre)

• Decrease in overall resource required and time spend fixing potholes/Street lights, where the number of fixes remains constant.

"Liveability"/environmental quality

• Greener/safer /cleaner and nicer place to live

• Sustainable development

3. Facilitation of self-service - allowing speedy

resolution of environmental or livability problems

• Number of services available and accessed through self service


Appendix 2: Detailed CRM National Project Product Listing The table below shows the complete list of products produced by the CRM National Project, mapped against 10 stages in the CRM implementation lifecycle.

Local e-Government – CRM National Project Lead Authority

• London Borough of Newham (London Borough of Tower Hamlets until July 2004) CRM Project Management by:

• Mark Bassham

Guide to the Benefits of CRM

Input to this guide gratefully received from:

• London Borough of Newham • Knowsley Metropolitan Borough Council

• London Borough of Hillingdon • London Borough of Brent

• West Sussex County Council • Salford City Council

• High Peak District Council • Surrey County Council

• South Northamptonshire District Council • Westminster City Council

Research and Findings by:

• Capgemini

National CRM Landscape

In England a total of 181 local authorities have CRM implementations that are live or in progress. They are split between types of authority as follows:

Type of Authority Live In Progress

County 7 9

Unitary (including Metropolitan & City Councils and London Boroughs)

56 22

District 48 39

Further information on CRM implementations within local authorities is available from http://www.crmacademy.org

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