To: All Members of the Property, Community & Support Services Scrutiny Committee

Transcription

1 Democratic Services Your ref: Hertsmere Borough Council Our ref: Civic Offices Tel: Elstree Way Borehamwood Fax: Hertfordshire, WD6 1WA Date: 28 March 2008 To: All Members of the Property, Community & Support Services Scrutiny Committee All other recipients of the Property, Community & Support Services Scrutiny Committee agenda Dear Councillor Property, Community & Support Services Scrutiny Committee Wednesday, 2 April 2008 In relation to the above meeting, please find enclosed the following additional information relating to Agenda Item 6 (Customer Relationship Management), which was listed as To Follow on the agenda sent to you earlier this week: 1. Written responses from Head of Human Resources and Customer Services and Chief Information Officer to initial questions as enclosed in agenda (pages 1-8); 2. Minute extract from Executive meeting on 1 June 2005, as referenced in written responses as Appendix A (pages 9-10); 3. Report of Officers EX/05/76, as referenced in written responses as Appendix B (page 11-16); and 4. Appendix to EX/07/76 pages 17-22). Yours faithfully James Hazlewood Democratic Services

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3 HERTSMERE BOROUGH COUNCIL PROPERTY COMMUNITY AND SUPPORT SERVICES (PCSS) SCRUTINY COMMITTEE Meeting on 2 April 2008 Presentation on Customer Relationship Management (CRM) Initial questions in relation to presentation on 2 April 2008, with a view to any potential review commencing in the 2008/2009 municipal year: To the Head of Human Resources and Customer Services: 1. What were the reasons behind the implementation of CRM? The reasons were set out in report EX/05/96 to the Executive on 31 August The following extracts refer and the phrases highlighted in bold are the key points made in favour of introducing CRM (my emphasis): 2.4 Customer Relationship Management (CRM) is an enabler for local authorities to enhance their services to the public by re-focusing around the needs of customers rather than the problems of those delivering the services. The implementation requires appropriate skills and training, security, awareness of privacy issues and strong technical integration. It also gives the opportunity to provide the customer and staff with better, streamlined processes and therefore improved access to services and information. 2.5 What is CRM? It is important to emphasise that CRM is not a computer system. It is a methodology or approach adopted by an organisation, which focuses on customers needs and appropriate ways of satisfying those needs. It is a complex mixture of organizational strategy, technology and users. It originated in the private sector as a marketing tool to improve customer service and increase sales. Within the public sector, the concept of CRM revolves around improving services to customers, from improved responses to enquiries, through to better information and improved experiences of interacting with the council. A key element in the public sector is taking the customer data often buried within departmental silos and managing it at an organizational level. 2.6 Cultural Change Effective CRM requires cultural change within the organisation and stakeholder awareness of the benefits of a joined up approach. The overall aim of CRM is to effectively respond to interactions with customers in a holistic way. CRM development should not involve developing different outcomes based on different access channels. The customer should see the authority as a single organization and the Council s service delivery mechanisms should be organised around the needs of the customer, rather than reflecting its internal structures. To achieve this requires a complex set of changes, which will include 1

4 culture, philosophy and strategy as much as process transformation, restructuring or technology. 2.7 The Scope of CRM All local authorities are probably using Customer Relationship Management techniques to some extent, but it is often fragmented, inconsistent and not applied at a corporate level. CRM should take the customer and management information, which exists, at a departmental level and manage it on a corporate basis. Ultimately the customer should be able to view and interact with the Council as a single entity. 2.8 Reactive or Proactive CRM The Council will need to make a decision as to whether the CRM programme in Hertsmere is mainly reactive or proactive. Reactive would respond to customer requests and act accordingly. Proactive is more ambitious and would involve specific measures being used to target customers, such as calls to alert customers of promotions made by the Council. Both represent an opportunity to improve and even in its simplest form CRM can be used for call backs where an officer agrees to call the customer at a predetermined time with the information requested but the proactive approach would maximise the benefits. 2.9 CRM Technology As previously stated, CRM is not a software package or application. It is a process of transformation and re-engineering of council services to put the customer at the forefront of service delivery. However CRM needs to incorporate a supporting technology as a facilitator to help deliver the business objectives. Hertsmere is already using the LACRM software solution at the faceto-face points of contact which, having been successfully piloted, can now be rolled out as part of a wider CRM project. 3. BENEFITS OF CRM 3.1 CRM will help the organisation to address the following challenges: Inconsistent customer experience. Fragmented service delivery information. Confusing contact information for customers. Absence of corporate image and joined up service delivery, requiring the customer to contact various council staff in order to complete transactions. Need to increase ownership of customer enquiries, and accountability of staff to the customer. Need to improve levels of customer satisfaction and reduce complaints. Technically skilled staff spending significant time interacting with customers Costs of duplicated call handling across departments. Inconsistency of data across back office systems, because the customer will rarely if ever tell every department of a change in circumstances. Potentially high fraud levels as a result of lack of corporate management of customer data. Customers needs assumed rather than known 2

5 3.2 Joining up information and improving business intelligence Information and feedback from the customer is valuable and when used well, assists in the delivery of more targeted help as well as more relevant and responsive services to customers. By combining information about how individual sections or departments interact with the customer, CRM will enable the authority to better quantify, understand and therefore manage the entirety of the service delivered to its customers. These improved metrics would support the re-engineering of business processes and organisational structures. 3.3 Consistent access and channel strategy Some access channels are far cheaper to service than others. Therefore as part of the CRM solution, a channel strategy will be drawn up to create an incentive for the customer to use the Council s preferred channels. The Council s employees can become more proactive in the use of the cheaper channels to reduce future contact through the more expensive routes. An example might be the use of a cheap SMS text message to confirm an appointment time, thereby reducing the likelihood that the customer will not be in and that there will be a subsequent need to re-arrange the visit. 3.4 CRM and E-Government CRM is a key part of the overall E-Government programme in that it is designed to join up information and service delivery mechanisms from across the Council s departments and beyond. CRM is a required outcome for all local authorities and Hertsmere will need to have a corporate CRM project implemented by December 2005, if it is not to be penalised by withdrawal of funding or an adverse assessment in its next CPA. 3.5 Reducing Transaction Costs A more customer-focused service also reduces the transaction costs of the service by resolving a greater proportion of requests at the first point of contact and reducing follow-ups or complaints. Business process reengineering, particularly involving high volume, low complexity processes, can yield considerable efficiency savings. Targeted investment based upon measurable knowledge of customer needs can enable processes to be optimised in order to reduce transaction costs and improve service quality. Savings can be made by consolidating common business processes into the front office. Examples include authentication, payments handling and eligibility checking. 3.6 Staff Development and Productivity CRM will allow our employees to work to their strengths. The staff with the best customer facing skills will occupy the front office (customer service centre) spending most of their time interacting with the customer. In turn the skilled managers, administrators, specialists and experts will occupy the back office, where they should not be regularly interrupted by customer contact. Ultimately, if staff are allowed to work to their strengths then they will feel more fulfilled and become more productive. Productivity in this sense means improvement in process efficiency. 3

6 4. THE CUSTOMER EXPERIENCE 4.1 The Council's services should be presented to the customer seamlessly. The customer should not be expected to know or understand the complexities of the Council s inner workings. As many services as possible should be capable of delivery via a single contact (face to face, by telephone or electronically). When customers contact the Council, they will expect the customer services staff (or ICT system if self-service) to have access to comprehensive, accurate, and up to date information, about them and their interactions with the Council. 4.2 Many boroughs that have implemented CRM report positive customer feedback. The introduction of service centres was the best thing the Council has ever done, and it has made all the difference. You no longer have to make appointments, you don t have to go to different departments, you just go to the service centre and no matter the problem, it gets sorted! The staff are so helpful, they make suggestions and the service is quicker. I no longer feel like a commodity, I feel like I am treated as a person. (Les Rogers, Newham resident). In the fully CRM-enabled Hertsmere Borough Council, it is hoped that most if not all council customers should feel this way. In an environment where taxes and fines are collected and the authority has a duty to decline certain applications for benefits a target of 100% satisfaction would be unrealistic. However, experiences to date suggest that most of the customers can be satisfied most of the time via Customer Relationship Management, providing it is implemented effectively. 4.3 Customer access and choice There are many different types of customer with differing needs. These include citizens (residents and visitors), business users, and tourists. Despite the choices of channels available, the Council must ensure that responses to customer requests remain consistent irrespective of the access channel chosen by the customer. The CRM solution supports consistency and choice. 2. Were the correct procurement procedures followed? The procurement of the CRM system was the subject of a report to the Executive in June 2005 (EX/05/76) The report sets out a full explanation of the procurement process to be followed and the reasons for it. The appendix to the report contained a copy of a discussion paper on CRM that had been presented to the E-Government in May The minutes of the Executive meeting on 1 June 2005 record the agreement of the Executive to the officers proposals for the procurement of the CRM system. For further information see copies of these documents appended to this response (MINUTE EXTRACT AND EDITED VERSION OF REPORT EX/05/76 APPENDED) 4

7 3. How was CRM implemented? This is a very wide question and this is therefore a general rather than a detailed response. By 2005, Hertsmere had already implemented a pilot CRM project for the resolution of Waste Management calls on what was known as a deep and narrow approach. The corporate implementation of CRM was then to be carried out from 31 December 2005 on a wide and shallow basis with a view to a deep and narrow approach being achieved with more departments through a phased approach. To meet E-Government requirements by 31 December 2005, a dedicated customer service centre was established. This involved building works to create the necessary accommodation, changing the terms and conditions of existing staff, running an assessment centre specifically designed for recruiting customer service centre staff, equipping the centre with the necessary telephony and technology to enable use of the CRM software and communicating and liaising with staff and managers about the new ways of working. Customer services staff were trained on the CRM system and on the key back office processes in the main services where a more deep and narrow approach was sought e.g. Waste Management and Revenues and Benefits. At the same time as the CRM was being launched, a change of direction was imposed by the then E-Government Manager insisting that all calls had to be routed through the Customer Service Centre straight away rather than a phased approach as had been envisaged. This approach had to be reversed after about three months as it was not manageable. The project then reverted back to a phased approach, in which the major front line services were to be prioritized. However, integrating the CRM system with the various back office systems proved to be difficult and slow, partly because of unresolved strategic issues about the information management infrastructure. Some services such as Community Services, that had not originally been prioritized for the CRM roll out, were taken on by the Customer Service Centre because the staff and managers wanted their calls handled that way and service benefits were capable of being realized quickly. 4. What was the timetable for the implementation? For further details of the timetable see various presentations and reports to the E-Government Board in The implementation timetable was subject to change as discussed above. 5

8 5. What outcomes were expected? Initially, the expectation was that some, if not all, of the benefits highlighted in the report to the Executive in August 2005, would be realised. In particular, it was expected that implementing CRM would help drive forward cultural change within the organisation, resulting in a more consistently customer focused approach. It was always recognised that the ultimate aim of achieving resolution of 80% of queries at the first point of contact would be difficult without a major investment in the wider information management infrastructure. 6. It appeared that CRM was implemented in a last minute fashion. Was this the case and if so, why? The timetable for implementing CRM was largely determined by the E- Government deadline of 31 December Proposals had been brought forward at an earlier stage (see the Appendix to report EX/05/76 for example) but it was not until the middle of 2005 that the organisation was in a state of readiness to take on board the wider implications. 7. Hertsmere is the only local authority in Hertfordshire who uses the LACRM software, and one of only 18 in the country to do so. Would you like to comment on this? The report to the Executive on the procurement of the CRM system (EX/05/76) highlighted that LACRM was the most cost effective of the systems examined for Hertsmere. The cost of major commercial systems such as Oracle, Lagan and Comino was much greater (estimated at that time to range between 100,000 to 450,000 more). LACRM was the right choice for Hertsmere at the time and served us well in enabling the Council to meet the E-Government requirements. The system should not be disparaged simply because it was less expensive and originally developed by a local authority. Hertsmere hosted a workshop for the national Service Transformation Experience Project (STEP) in July 2006 and the STEP Coordinator commented that Hertsmere had achieved as much through LACRM as many authorities had with much greater resources. However, this is not to say that the Council wouldn t benefit from upgrading its system if the resources are available to support a better solution. 6

9 To the Chief Information Officer: 1. In your opinion, were the projected outcomes realistic? I am of the opinion that some of the projected outcomes were not wholly realistic within the timeframe permitted and resources allocated. In particular the projected outcome of enabling 80% of all enquiries coming into Hertsmere Borough Council to be dealt with at first point of contact through the proposed Contact Centre. Achieving this objective involves major operational and cultural change. From a systems management perspective alone it involves substantial change to systems that have been built up over many years with substantial investment. This process requires clear strategic objectives and mechanisms in place to affect systems and process decisions in order to move towards these transformational goals (such mechanisms are outlined within the proposed IS Strategy). It is however important to note that many of the stated objectives have been achieved. For example the outcomes outlined in the relevant Executive report (EX/05/96) do appear to have largely been achieved, and, importantly, certain IEG requirements have been achieved as a result of the CRM initiative (such as number 16 enabling a one stop resolution for Housing & Council Tax enquiries). 2. What is the timetable for further development (if any) of CRM (i.e. rolling out to other departments)? I am proposing that Hertsmere Borough Council implements an Enterprise Content Management (ECM) system with corporate wide electronic records and document management and case management. It is proposed that this system becomes the common database of customer records and that they be linked to a common database of location based information (the LLPG). The ECM proposals are part of a wider set of system and information management related proposals that are designed to facilitate the kind of processes required to move the CRM initiative forward. Following a period of consultation the IS Strategy is now complete in draft form and will be presented to the Management Team on the 7 th April. The next step will be to present to the Executive in May 2008 for formal approval of the proposed strategic direction. Once agreement in principle has been reached then a costed project plan will be produced (based on initial feasibility studies). The first phase of the project will see the implementation of the ECM technology, the migration of Hertsmere s web presence, the implementation of a new intranet and the initial implementation of a corporate file plan. Further workshop sessions will be required however it is expected that the implementation work will take between 9-12 months per department once the technology has been implemented. It may however be possible to run certain departmental implementations in parallel depending upon resource allocation and other operational considerations. The timetable has therefore yet to be fully defined. 7

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11 APPENDIX A EXTRACT FROM MINUTES OF EXECUTIVE MEETING ON 1 JUNE PROCUREMENT OF CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM (EX/05/76) Decision: that 1. the Executive note the findings of the Officers as explained in the report and attached appendix (EX/05/76) and approve officers decision not to invite tenders for the proposed CRM system as per Contract Procedure Rules 9.1 (f) and (g); 2. the Executive approve the procurement of the CRM system from ISB in light of officers findings, as detailed in Para 2.15 of the Report of Officers EX/05/76; and 3. the Executive recommend the revenue cost of 12,500 for 2006/07, then inflated by retail price index for future periods, to the full Council under the budget and policy framework. Reasons for the decision In order to comply with contract procedure rule 9.1 (g) which stated: Any contract awarded in accordance with rule 9 will be reported to be appropriate decision making body for noting. Alternative Options Considered and Rejected In the circumstances Officers did not consider that there were any practical alternative options to facilitate the successful implementation of the Corporate CRM project and in particular the Customer Service Strategy. In order to meet E-Government priority outcomes deliverable by December 2005, it was important to move quickly with the purchase of the CRM technology and the subsequent implementation of CRM on a phased approach across the Authority. Key Points Arising from the discussion i Responding to concerns raised by a non-executive Member, the Portfolio Holder for Resources/Performance Improvement, Councillor Foy, stated that the Council was committed to achieving the targets set out in the E-Government Strategy and would be moving forward as quickly as possibly with the proposals. 9

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13 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. HERTSMERE BOROUGH COUNCIL REPORT TO THE EXECUTIVE Item No 2.3 Document Reference No EX/05/76 Date of Meeting/Decision: 1 June 2005 This is not a key decision Urgency: The proposals are not exempt from call-in on the grounds of urgency. PROCUREMENT OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SYSTEM PORTFOLIO HOLDER COUNCILLORS REBECCA FOY & JOHN GRAHAM 1. ACTION RECOMMENDED 1.1 The Executive to note officers findings as explained in the report and attached appendix and to approve officers decision not to invite tenders for the proposed CRM system as per Contract Procedure Rules 9.1 (f) and (g). 1.2 The Executive to approve the procurement of the CRM system from ISB in light of officers findings, as detailed in Para 2.15 below. 1.3 The Executive to recommend the revenue cost of XXX for 2006/07, then inflated by retail price index for future periods, to the full Council under the budget policy framework. 2. EXECUTIVE SUMMARY/PROPOSALS 2.1 Officers and Members will be aware that the Council has demonstrated its commitment to being customer-focused through the Corporate Performance Assessment (CPA) project entitled Corporate Customer Relationship Management and in particular with the implementation of its Customer Service Strategy Officers and Members will also be aware that the Council is required to demonstrate its commitment to E-Government by delivering a number of E-Government priority outcomes by December 2005 and the implementation of CRM technology will assist in satisfying at least four of these priority outcomes. Document Reference No. EX/05/ /03/08 (11:59 AM) 11

14 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. 2.3 It has been recognised for some time that a key component of implementing the Customer Service Strategy is CRM technology, which provides a central logging system that acquires and holds customer information and feedback, which ultimately could be accessible across the Council. 2.4 In 2003 CRM suppliers were invited to provide a panel of officers with details of their products and the associated costs formal tenders were not required at this stage as this was a preliminary fact-finding exercise with no precise knowledge of total costs. Officers concluded that based on the product, the service and the financial information, the LACRM (Local Authority Customer Relationship Management) system supplied by ISB (Information Services Bureau) at Belfast City Council, was likely to be the best fit. 2.5 In 2004, ISB were invited back to make a presentation to officers and the E-Government Project Board. Subsequently a discussion paper was presented to the E-Government Project Board at their meeting on 11 May 2004, when it was decided that the Board would review recommendations for purchase from a preferred supplier at a later Project Board meeting, for implementation on a phased wide and shallow approach initially. 2.6 Officers have researched a number of options for the introduction of CRM technology including exploration of opportunities for partnership working with other local authorities where such technology has already been successfully implemented (HCC, Three Rivers, East Herts and Broxbourne). 2.7 ISB s CRM product was originally developed by the London Borough of Newham and has subsequently been developed by ISB, the trading arm of Belfast City Council. The product is being used by a number of local authorities of varying sizes across the country who meet and discuss development of the product via the LACRM user group. (The London Borough of Enfield has recently been considering purchasing the product and visited Hertsmere to see the pilot system implementation. They were impressed by the ease at which the Council appear to have implemented the system and by the enthusiasm of the staff towards it, and are subsequently making a recommendation to purchase the system.) 2.8 Officers concluded that the most appropriate way forward was to explore the feasibility of carrying out a three-month pilot. ISB were agreeable to this proposal and indicated that the costs would be XXX including training costs of XXX these costs would be deducted from the total purchase cost if the system was ultimately introduced across the Council. 2.9 The system has now been installed and adapted to the Council s needs and is being used by front-facing customer services staff at the Civic Offices and the two area offices in Bushey and Potters Bar. It is planned that the system will be introduced to the call centre responsible for waste management calls in early June Based on verbal comments from customers the system has been well received particularly as logging of the enquiry provides proof for the customer of a transaction and receipts can be issued. Customer service staff are very enthusiastic about the Document Reference No. EX/05/ /03/08 (11:59 AM) 12

15 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. product which is already providing customer histories and useful management information The three-month pilot is due to end in mid July The anticipated cost of purchasing the system is XXX with no revenue maintenance for the first year, ie 2005/06, and which is fully budgeted for within the E-Government budget There would be ongoing annual costs relating to the support and standard interfaces and membership of the user group amounting to XXX for 2006/07 and then retail price indexed inflation The Council s Contract Procedure Rules require all heads of service to invite tenders where the likely wholelife costs of a contract will exceed 50, Given the likely life of the CRM product, the total costs of this contract will exceed 50,000. However, officers do not believe that a tendering exercise is in the best interests of the Authority for the following reasons: (a) (b) the original comparisons of the quality of the product ISB s product is very much the result of partnership working and has been developed for local authorities within a local authority context; the original comparisons of the cost of similar products: PROVIDER A: PROVIDER B: Not a full CRM system, initial quote of XXX with further costs of XXX for each additional 10 users plus annual support costs likely to be at least 10% of licence costs. Initial quote: licence costs were quoted at XXX for ten users increasing by XXX for each additional set of five users, plus support costs which were 18% per annum of the user licence costs. In addition, training and integration to back office systems would need to be negotiated separately. Other CRM systems such as PROVIDERS C, D and E would cost in excess of XXX some rising to XXX The concerns with these systems, and similar systems investigated are that the costs are variable dependent upon the number of users and the requirement to integrate with back office systems. The costs of the ISB system are set regardless of the number of users and standard interfaces, which is a substantial advantage due to CRM s cross cutting user requirements; Document Reference No. EX/05/ /03/08 (11:59 AM) 13

16 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. (c) the considerable work that has already been undertaken by officers in comparing the quality and costs of available products and in successful implementation of the pilot system thereby avoiding the duplication of resolving teething problems; (d) the feedback from customers and staff; (f) (g) the costs of and the time required to undertake a formal tendering exercise; and in order to meet the E-Government agenda the Council will need to deliver 29 essential outcomes, of which the successful implementation of the CRM system will achieve 4 directly and will assist with meeting others. Under CPA the customer care and focus are key cross cutting requirements for the organisation. Accordingly, the Head of Organisational Development, in consultation with the Director of Finance and Legal, has concluded that it is not reasonably practicable to invite formal tenders and proposes to procure the CRM system from ISB. 3. REASON(S) FOR RECOMMENDATION 3.1 In order to comply with the contract procedure rules 9.1 (g) which states: Any contract awarded in accordance with rule 9 will be reported to be appropriate decision making body for noting. 4. ALTERNATIVE OPTIONS 4.1 In the circumstances officers do not consider that there are any practical alternative options to facilitate the successful implementation of the Corporate CRM project and in particular the Customer Service Strategy. 4.2 In order to meet E-Government priority outcomes deliverable by December 2005, it is important to move quickly with the purchase of the CRM technology and the subsequent implementation of CRM on a phased approach across the Authority. 5. PLANNED TIMETABLE FOR IMPLEMENTATION 5.1 Officers are wanting to finalise the terms and conditions of the procurement of this system from the preferred supplier by the end of June DELEGATION 6.1 This is a decision that is to be taken by the Executive as a whole. Document Reference No. EX/05/ /03/08 (11:59 AM) 14

17 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. 7. FINANCIAL AND BUDGET FRAMEWORK IMPLICATIONS 7.1 (EXEMPT FROM PUBLICATION) 8. LEGAL POWERS RELIED ON AND ANY LEGAL IMPLICATIONS 8.1 None identified. 9. RISK MANAGEMENT IMPLICATIONS 9.1 Officers have identified that one of the main risks involved in the successful implementation of the Corporate CRM project and the Customer Service Strategy, and as a consequence the Comprehensive Performance Assessment Improvement Plan, is the lack of suitable CRM technology. 9.2 In undertaking a risk assessment consideration is given to the likelihood of the risk and the severity of the impact on a score of 1 4. Likelihood Severity 4 very likely, 3 likely, 2 unlikely, 1 remote 4 major, 3 serious, 2 significant, 1 minor 9.3 Officers consider that the procurement of a suitable CRM product would reduce an initial risk assessment of 16 (ie the maximum score - very likely likelihood and major severity) to a score of 4 (ie a low score - unlikely likelihood and significant severity). 9.4 Officers have also recognised the risks associated with a high dependency on this technology but these are classified as low (ie unlikely likelihood and significant severity) due to the off-site data storage and disaster recovery facilities procured earlier this year. 10. PERSONNEL IMPLICATIONS 10.1 Following the implementation of the pilot exercise and the associated training customer services staff are very enthusiastic about the product. It is anticipated that this reaction could be replicated throughout all departments facilitating the Council s change management programme. 11. CORPORATE PLAN & POLICY FRAMEWORK IMPLICATIONS 11.1 The proposed procurement of the CRM product will facilitate the implementation of the Corporate CRM project and Customer Service Strategy as well as the CPA Improvement Plan. Document Reference No. EX/05/ /03/08 (11:59 AM) 15

18 APPENDIX B THIS IS AN EDITED VERSION OF A PART II REPORT. INFORMATION WHICH IS STILL EXEMPT FROM PUBLICATION HAS BEEN REMOVED AND THIS HAS BEEN HIGHLIGHTED IN BOLD ITALICS. 12. ASSET MANAGEMENT PLAN IMPLICATIONS 12.1 None identified. 13. HEALTH AND SAFETY IMPLICATIONS 13.1 None identified. 14. EFFICIENCIES 14.1 Whilst specific efficiency savings cannot be identified at this stage in time, the ODPM s National CRM Project has identified that, based on the experience of authorities who have implemented CRM systems, efficiency savings will be realised The National Project website provides a Business Benefits Calculator and this tool will be used to demonstrate any cashable and non-cashable benefits for Hertsmere when the full implementation programme is being developed. 15. APPENDICES ATTACHED 15.1 Discussion paper presented to E-Government Project Board in May AUTHORS Jan Jukes Ext: 2982 Development Manager jan.jukes@hertsmere.gov.uk (Customer Services) Contributory Authors: Judith Fear, Ext: 2135 Head of Organisational Development judith.fear@hertsmere.gov.uk Sajida Bijle Ext: 5000 Director of Finance and Legal sajida.bijle@hertsmere.gov.uk Steve Wallace Ext: 3510 Audit Manager steve.wallace@hertsmere.gov.uk Document Reference No. EX/05/ /03/08 (11:59 AM) 16

19 APPENDIX B1 HERTSMERE BOROUGH COUNCIL REPORT TO E-GOVERNMENT PROJECT BOARD Document Reference no: TITLE A DISCUSSION PAPER REGARDING THE ROLE CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SOFTWARE COULD TAKE WITHIN HERTSMERE BOROUGH COUNCIL 1. ACTION RECOMMENDED 1.1 Project Board supports the implementation of CRM technology and identification of CRM champions at member, director and officer level across the authority in order to assist in the realisation of its corporate objective of aiming to be Best in Class. 1.2 Selection of preferred supplier and clear implementation plan to be presented to Project Board for approval end of July EXECUTIVE SUMMARY / PROPOSALS 2.1 Background CRM has always been on the IEG agenda but with varying degrees of importance for each individual authority. In some authorities it has been a major initiative, particularly where call centres have been developed. In other authorities it has been sidelined in favour of other projects that have been perceived as more easily achievable and more in line with the authorities priorities. However, the emphasis has changed significantly over the past 12 months. The Office of the Deputy Prime Minister (ODPM) has recently published the document Defining E-Government outcomes for 2005 to support the delivery of priority services & national strategy transformation agenda for local authorities in England. Within this document the Government has proposed a set of e-government priority outcomes, which it expects each local authority, as part of its e-government investment programme, to deliver by December CRM is highlighted as a tool which can assist in the achievement of three of these priority areas. However, it is the key to achieving a fourth priority outcome, ie priority area number 14 Making it easy for citizens to do business with the council The ODPM has identified CRM technology as an indispensable building block in modernising local government, and helping councils streamline service delivery. To this end it has sponsored a national e-government project that aims to provide local government with the essential tools and know how that will enable accelerated modernisation plans. These are required to underpin the provision of a local public service that is customer-focused, open, accessible, seamless and consistent across all points of service delivery. The national programme was launched in March 2004 and as a result such information is available through the national website to all local authorities, based on the experience of other flagship authorities, including partnerships. It is anticipated that through the various products available on the website and networking with other authorities, CRM will be a manageable and achievable project for all local authorities in England. E:\moderngov\Data\AgendaItemDocs\2\0\8\AI \04EX0576Appendix0.doc 1 17

20 2.1.3 CRM can mean different things to different people. In its broadest terms it should be considered as a methodology or approach which focuses on customers, their needs and wants and appropriate ways of satisfying those needs and wants. This customer-focused approach can be facilitated and enhanced by CRM software applications, although it is not essential to the CRM approach. However, in line with the ODPM emphasis upon this enabling technology, throughout this document CRM will refer to the software that facilitates the customer focused approach across the whole authority Whilst the Hertfordshire countywide partnership project provides several software products, CRM is not one of them. As a consequence each Hertfordshire district/borough authority will have to address its own individual plan with regard to CRM, although the possibility of working with neighbouring authorities who have not yet implemented CRM should not be discounted. 2.2 Why should Hertsmere Borough Council consider implementing CRM? Councils are faced with a new approach to the delivery of services to customers. Customer expectations are higher and complaining about poor service and goods is more prevalent. The Government has a commitment to improving public services and criticism of poor performance is a major function of government departments in the drive to improve public services. The quality of customer experience delivered by local authorities must rise to meet this enhanced service expectation, or be viewed as second rate. Whilst 100 per cent customer satisfaction is an unrealistic target (particularly where taxes and fines are collected, and the authority has a duty to decline certain applications for benefits), experiences to date suggest that in authorities where CRM had been adopted, nearly all of the customers can be satisfied nearly all of the time In the Council s Corporate Plan five key aims have been identified, one of which is to be Best in Class. A high priority area, which underpins the five aims, is described as: Aiming to deliver excellent service to all the Council s customers and developing the organisational culture to become more customer focused. In order to achieve this aim the Council is currently developing a Customer Service Strategy which outlines its goals and sets out targets for performance management. It is anticipated that CRM will support this strategy by assisting in addressing some of the problems the Council faces with regard to providing services to the customer. These include: inconsistent customer experience confusing contact information for customers technically skilled staff with inconsistent customer-handling skills and competencies spending significant time interacting with customers who could be dealt with by trained customer service staff absence of corporate image and joined up service delivery requiring the customer to contact various council staff in order to complete transactions via independent and discrete access channels (so that the structure of the organisation dominates Hertsmere s customer service ethos rather than the preferences of the customer) lack of ownership of customer enquiries, lack of accountability of staff to the customer poor consistency of data across back office systems because the customer will rarely, if ever, tell every service area/department of a change in circumstances patchy customer histories across back office systems as only some systems have capacity to record customer relationship information (e.g. contact history, nature of contacts, status of current service interaction, etc.) anecdotal evidence used to support proposed business cases and subsequent decisions, and to forward plan for when customer services will be required to support business processes most (e.g. Council Tax billing) Where data is captured, it is held in local and unconnected systems and is not necessarily used to promote organisational learning customers needs assumed rather than known. E:\moderngov\Data\AgendaItemDocs\2\0\8\AI \04EX0576Appendix0.doc 2 18

21 CRM can help to optimise service delivery mechanisms, enable better understanding of the customer and provide a more joined up service. CRM can support a front/back office split that allows staff with the best customer facing skills to spend more of their time using those skills. Likewise, professional and skilled administration staff are largely uninterrupted by routine customer enquiries. There is a potential for savings to be made by consolidating common business processes into the front or middle office, examples include authentication, payments handling and eligibility checking The BVPI General Survey 2003/04, published in March 2004, indicates that there has been a decrease in satisfaction with the overall service provided by the Council since the previous survey conducted in 2000/01. Whilst the survey does not cover all services, complaints handling across the authority was particularly mentioned. A key benefit of CRM is that it enables an authority to better quantify, understand and therefore manage the entirety of the service delivered to its customers. These improved metrics support the reengineering of business processes and organisational structures. This would initially assist in reaching optimum efficiency and then to continuously refine service delivery in line with changes in customer needs, legislation and technology. Ultimately, if the Council is better able to measure what it does then it can make more informed decisions both at a corporate and individual level. 2.3 How could CRM be implemented in Hertsmere Borough Council? In the first instance objectives for the implementation of CRM should be set. The National CRM Programme sets out in its Vision document the following objectives: improve service to customers enhance customer satisfaction increased organisational flexibility improve performance and response to customers requirements enhance image of local authority understand customer requirements and priorities reduce costs of service, re-profile business in line with customer demand increase revenues (for those services for which authorities can charge) anticipate changes in customer requirements and provide services (and ways of accessing those services) applicable to that changing need The Council would need to consider its approach to implementing CRM. There are two main concepts, wide and shallow and narrow and deep. Wide and shallow is a workflow, service-based concept with limited automated integration with the back office services. This generally involves providing a CRM front-end facility with the capability of capturing the service request. In the case of routine general enquiries this request would be resolved at the first point of enquiry. Similarly, where Waste Services are likely to use CRM as their back office system, most enquiries will also be resolved at this first point of contact. More detailed enquiries would be sent to the relevant service area (back office) where the person in that department receiving the request will satisfy the enquiry and confirm its completion to the front office. The change experienced by the service teams consists of revising their business processes to facilitate this manual procedure for tracking and resolving issues. The customer sees an improved service as all enquiries are tracked to resolution through the revised business processes. Since it is the manual procedures that are being revised, a high percentage of service teams are more likely to be brought on board at this early stage. Any integration of back office applications would be addressed in the future as part of the next step. Narrow and deep generally involves providing a CRM front-end facility which captures the service request and can access the back office system to satisfy that service request. Under this scenario the customer service agent can handle a more detailed service specific enquiry. Interactions are automated between different service providers to achieve maximum efficiency. However, as with wide and shallow approach, some areas of services are again E:\moderngov\Data\AgendaItemDocs\2\0\8\AI \04EX0576Appendix0.doc 3 19

22 supported via the workflow based service request concept to achieve a wider coverage of the one stop shop concept and gain early benefits. The business process improvement and change management is established with a combination of reengineered automation and manual procedures. It may be that a combination of both of these concepts will ultimately be adopted, however, the wide and shallow approach would be the best starting point for HBC There are several other factors HBC would need to consider when putting together an implementation strategy for CRM, these include: Implementing CRM is a continual learning process and needs to be approached in manageable stages. Not all service areas will be supportive of the project initially. Following demonstrations of CRM products, early likely benefits are anticipated if CRM software was made available to customer services front facing staff where the early collection of information on customer interaction could help to build the business case for wider implementation across the authority. The newly appointed Head of Waste Services has previous experience of CRM in another local authority, where it was successfully used to manage telephone calls to the service, as well as monitoring correspondence, complaints and providing management information used in developing the service. In this case, CRM effectively becomes the back office system. The Head of Waste Services is extremely keen that waste services should be used as one of the first areas for the implementation of CRM where its success in a contact centre environment can be tested to the benefit of the rest of the organisation. Based on the research study carried out for HBC entitled Understanding demand for new channels of contact with the Council published in July 2003, residents of Hertsmere were overwhelmingly in favour of the telephone as their preferred means of contact with the Council. CRM is extremely effective in a contact centre environment where routine calls can be resolved at the first point of contact. However, public reaction to call centres can be negative, suggesting that they dehumanise contact and leave people feeling they have been processed rather than helped. Whilst one contact number for all council enquiries would be the preferred vision for the Council s CRM implementation strategy, this would need to be carefully monitored in the context of the customer experience as each service area was brought on board. A corporate approach needs to be taken with regard to the implementation of CRM and support for the project at the highest possible level needs to be identified and well publicised across the authority. 3. REASONS FOR RECOMMENDATION 3.1 The Council needs to demonstrate its commitment to improving services and continuous improvement in the level of customer satisfaction. The ODPM has identified CRM technology as the route to achieving this. 4. ALTERNATIVE OPTIONS 4.1 The ODPM states required e-government outcomes, by December 2005, as follows: Systems in place to ensure effective and consistent customer relationship management across access channels and to provide a first time fix for citizen and business enquiries, ie using a common database, which holds customer s records, to deliver services across different channels, and enabling joined-up and automated service delivery. E:\moderngov\Data\AgendaItemDocs\2\0\8\AI \04EX0576Appendix0.doc 4 20

23 All and web form acknowledgements to include unique reference number allocated to allow tracking of enquiry and service response. 100 per cent of enquiries from the public responded to within one working day. In light of the above, the Council does not have an option of doing nothing, and whilst individual service areas have systems that could record such information these would not be easily joined-up to provide information corporately. 5. PLANNED TIMETABLE FOR IMPLEMENTATION 5.1 A more detailed timetable would be provided in the event the project goes ahead. However, the highest level of priority would be given to implementing this for customer and waste services. 6. CHANGE MANAGEMENT IMPLICATIONS 6.1 CRM is recognised as a change enabler that can support the modernisation and transformation of services, helping to develop customer focused organisations that put individuals and citizens at the very heart of everything that is done. CRM touches more points of the e-government model than any other form of enabler. It is an essential core building block in the Council s strategy to achieve targets for modernising government, achieving a real improvement in the quality of services and creating a customer-centric organisation that really meets the needs and expectations of citizens. 6.2 Over a period of time it is likely that CRM will have an impact on all areas within the Council. However, it is difficult to be specific about the actual change staff within the organisation will experience. This will depend upon the type of work they do and the service area they work in. Nonetheless, the most significant change seen within the service teams is likely to be the redefinition of their business processes (or workflow) as customer contact is initially processed by customer service agents and, where escalated to the back office service team for resolution, tracked to its point of completion and recorded. As the implementation timetable is developed, the Head of Organisational Development will work with staff in each service area affected, to ensure support, training and development is provided as required. 7. FINANCIAL AND BUDGET FRAMEWORK IMPLICATIONS 7.1 The detailed costs of the project cannot be established at this stage in time as a suitable supplier would need to be identified. However, based on some preliminary investigations of possible suitable suppliers, typical costs may be made up as follows: Year One Initial charge including site licence XXX Implementation cost XXX Support cost XXX Membership of User Group XXX Total XXX Year Two Annual support of package XXX 3 standard interfaces XXX Membership of User Group XXX Total XXX In addition to the above, consideration would need to be given to upgrading, where necessary, individual computers where CRM software is to be installed. E:\moderngov\Data\AgendaItemDocs\2\0\8\AI \04EX0576Appendix0.doc 5 21