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Weekly UpdatesConstituent relationship management (CRM) combines advanced telephony, Internet, and computer technology with constituent-focused business processes and an ethos of service to the community. Coordination between these elements in a government organization makes possible drastic improvements to constituent service. Consider the following examples:
* As a result of CRM-led process improvement efforts, the City of Chicago, Illinois, was able to reduce the time between a report of a pavement cave-in is first reported by a constituent to when it is repaired by the city by almost 80 percent and by almost 20 percent for sewer cave-ins.
* The City of Albuquerque, New Mexico, strives for an 80 percent phone call pick-up rate within 30 seconds. For a 12-month period (August 2005-July 2006), the city reports that these goals were exceeded every month with an average call pick-up rate of nearly 99 percent within 30 seconds.
* The City of Hampton, Virginia, with a population of 145,000, receives about 700 calls per day through its CRM system. The city's surveys show that the majority of callers are "satisfied" to "extremely satisfied." Further, the number of calls received is steadily increasing, along with the quantity of after-hours calls--two indicators of a successful CRM initiative. (1)
As these examples imply, CRM is a primary means to transform the relationship with the constituent. Given the diminishing revenues most governments face, however, the cost-saving potential of a CRM initiative is an important consideration. This article will describe some of the most significant cost-savings opportunities available through CRM that can help a government realize its constituent service improvement aspirations while making the most efficient use of resources. This article also will describe the types of savings that are possible by implementing CRM. In many cases these are not immediate "hard" dollar reductions in the organization's budget, but rather savings in the form of efficiency gains or the ability to shift staff to areas of higher work volume, allowing a government to avoid future cost increases in those areas. It is essential to understand the difference so that a government can properly set its expectations before venturing into a CRM project.
CRM COST SAVINGS
This section will describe four ways in which CRM can help a government save money. A plan to implement CRM should consider how a government will maximize the gains it realizes from these opportunities.
911 Call Volume Reduction
One of the most widely recognized cost benefits of CRM is the potential to reduce the volume of calls going into a government's 911 number by redirecting non-emergency calls to an easily accessible and well-known alternative communication channel, such as a 311 (2) telephone number. Typically, 911 operators receive a higher salary than non-emergency constituent service representatives (CSRs). Further, a 911 call center is typically not optimized to handle non-emergency calls.
A dedicated non-emergency contact center can respond more efficiently to non-emergency calls. Hence, by establishing a convenient, easy-to-remember alternative to 911 and publicizing its availability, government can redirect the often-substantial number of non-emergency calls received by 911 to a less expensive and more efficient channel. For example, Waukesha County, Wisconsin, is currently analyzing the case for CRM and estimates that 15 to 30 percent of the calls coming into its 911 number are non-emergency in nature. (3) DeKalb County, Georgia, which is in the midst of its CRM implementation, anticipates reducing non-emergency call volume by 20 percent in the first year as a result of 311. Both counties expect to be able to reduce the staffing costs of their 911 call centers accordingly DeKalb County expects that a reduced 911 call volume will enable the county to reduce overtime expenses in its 911 center. The City of Chicago, which has almost a decade of 311 experience, has seen the benefits in terms of reduced operating costs for city departments. For instance, 125,000 fewer police squad cars were dispatched because the 311 center was able to handle non-emergency calls. The city's 311 system also is able to process 20 percent of the police department's case reports each year.
Contact Center Consolidation
In a non-CRM environment, governments typically operate a variety of independent call centers, phone numbers, walk-in locations, and e-mail contacts--each handled by a different set of employees. CRM technology allows the advent of a "universal constituent service representative" The universal CSR can handle multiple communication channels and take a variety of inquiries. Technologies like a comprehensive knowledge base and conversation scripting provide the tools to respond quickly accurately and consistently to a plethora of different types of inquires and requests. Technologies such as workflow tools allow the CSR to involve quickly subject matter expert staff if the CSR cannot handle it alone.
Accordingly previously disparate contact points can be consolidated into a single contact center. Not only does this hold the potential for reducing personnel costs through technological efficiencies and economies of scale, (4) but it may reduce facility maintenance costs as well. Hardware/software costs can be cut as there are fewer communications systems to maintain and larger, more cost-effective implementations can occur, rather than numerous, less efficient ones. Time savings and increased efficiency also are achieved by consolidating staff training.
Research by Computer Sciences Corporation suggests that call center consolidation can produce savings ranging from 25 percent to 50 percent, based primarily on its work with larger private sector firms. (5) While no broad data on potential consolidation savings in the public sector is available, case study research suggests that significant savings also may be available to governments, especially larger ones that can aggregate easily the volume of personnel and work needed to realize economies of scale.
To illustrate, DeKalb County is consolidating its 22-person water and sewer billing call center staff into the county's 311 call center. Based on research conducted by the county as to the type of calls the water and sewer contact center receives and how many of these can be successfully handled by a generalist 311 CSR rather than a utility specialist, the county expects that the call volume to the water and sewer call center will be reduced by about 50 percent. Further, county research has shown that 311 CSRs spend about 70 percent of their work time on phone calls, compared to only 40 percent for water and sewer specialists. This means that the 311 center is successfully realizing economies of scale by making more complete utilization of call-takers' time. As a result, the county has initially reallocated seven of the water and sewer call center's 22 positions to the 311 call center and may reallocate more in the future.
In another illustration, Waukesha County has identified a number of very specific cost saving sources due to the increased database accuracy that is a result of consolidation. A centralized contact center can use specialized address tracking and data cleansing technology to maintain a more accurate database of constituent mailing addresses. The county's consultant estimates that savings from reduced return mailings and reductions in duplicate effort to verify addresses and resend documents, as well as the ongoing management of redundant constituent data could result in savings equal to about half the cost of implementing the CRM system during the first phase of the county's CRM project. Reduction in misrouted calls and constituent call-backs due to more effective initial call handling are expected to achieve savings equal to about another 10 percent of the county's phase-one costs.
Successful contact center consolidation has led the City of Chicago to take gains from consolidation another step further. The city is now in the process of consolidating its dispatch operators for services such as parking violations, animal control, and human service field operations. Hence, when a request is taken by the city's 311 contact center, the contact center need only communicate with a single dispatch center. This allows the city to cut three positions in its recently passed 2007 budget. Further, under the old system, human services field operations supervisors had some dispatch responsibilities in addition to their field duties. With consolidation, dedicated positions will handle all dispatching, enabling these supervisors to focus exclusively on supervising work in the field.
Redirect Contacts to Less Expensive Channels
Under a CRM philosophy, constituents can choose to interact with government through a variety of channels, including telephone, walk-in, e-mail, Web site, or conventional mail. Each of these channels has different cost-per-interaction implications such that a CRM cost reduction strategy will seek to encourage constituents to use the least costly channel of communication for the specific nature of the contact.
The Internet is generally the least expensive channel of communication; the telephone is the most popular, however and will likely remain so for in the short term. A CRM strategy must seek to reduce or limit the average cost-per-call in order to maintain CRM'S viability as a cost-containment tool without sacrificing the quality of service delivered. A popular means for limiting the cost-per-call in the private sector has been interactive voice response (IVR) menus that precede contact with a live operator. However, many CRM implementations in the public sector are sponsored by and closely associated with the mayor or other high-profile official who would prefer that constituents immediately come into contact with a live operator.
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