CiRM to NPM Change

Transcription

1 U N I V E R S I T É D E F R I B O U R G S E M I N A R E - G O V E R N M E N T Winter Term 2005/ 2006 Prof. Dr. Andreas Meier Citizen Relationship Management - CiRM By: Andreas Stuht Student ID# Cité St. Justin Rue de Rome Fribourg Suisse andreas.stuht@unifr.ch astuht@web.de January 13 th, 2006

2 Table of Contents II Table of Contents Table of Contents... II List of Figures... III List of Abbreviations...IV 1 Introduction Term and Placement of the CiRM Customer Relationship Management CRM Citizen Relationship Management CiRM E-Government and New Public Management (NPM) From CRM to CiRM CRM in Private Enterprises Transfer of CRM to Public Administration: CiRM Necessity for CiRM in Public Administration Status Quo Usage of CiRM today Usage of CiRM today Potentials by using CiRM Summary and Outlook Appendix I: DIUF Study: Internet & CRM Appendix II: ARD Study: Usage of Internet Bibliography... 19

3 List of Figures III List of Figures figure 1: classification of customers of public administration... 9 figure 2: CRM transferable in the provider s view? figure 3: CRM transferable in the customer s view? figure 4: importance of the different CiRM elements for public agencies figure 5: realisation of the different CiRM elements by public agencies... 14

4 List of Abbreviations IV List of Abbreviations CiRM cp. CRM e.g. etc. KGSt NPM Citizen Relationship Management compare Customer Relationship Management for example et cetera Kommunale Gemeinschaftsstelle für Verwaltungsmanagement New Public Management

5 Introduction 5 1 Introduction In the last years the Customer Relationship Management (CRM) is grown to a fundamental concept in Management. CRM is a company policy, which is focussed on the customers. It should enable a better, long-term relationship to the company s clients. One of the main goals of CRM is the augmentation of the customer satisfaction. In contrast to the development of CRM in private enterprises, it is almost not used in public administration. In the public context CRM is called Citizen Relationship Management (CiRM). In course of a discussed administrative reform and the so called New Public Management (NPM), focussing on clients should get more and more important for public administration. The clients of public services are the citizens of a country, city etc. It is important to focus on them in order to reach an augmentation of the citizen satisfaction. This paper concentrates on how the concepts of CRM can be transferred to public administration and gives reasons for the importance for such a transfer. Furthermore this work gives a status quo to what extent public administration is already using concepts of CRM. In the second chapter the terms of CRM and CiRM are treated, together with a placement in the context of E-Government. The third chapter deals with the transfer from CRM to CiRM and shows what the main difficulties are and why the CiRM is necessary for public administration. The fourth chapter presents a status quo study in order to show how and to what extent CiRM is used by public administration. This paper finishes with a summary and gives an outlook for the further development of CiRM. Fribourg, January 2006 Andreas Stuht

6 Term and Placement of the CiRM 6 2 Term and Placement of the CiRM In order to explain the term of CiRM it is necessary to explain the term CRM. After that, a placement of CiRM is given in the context of E-Government. 2.1 Customer Relationship Management CRM Customer Relationship Management (CRM) is a term used by private enterprises. A clear definition has not yet been established, but CRM is today understood as a whole business strategy which is focussed on the customers of a company. Supported by IT-systems CRM should bring on the base of individual marketing concepts a profitable, long-term client relationship. Concerning to today s strong concurrence companies want to increase the customer retention in order to prevent the loss of clients. This is important because the client acquisition gets more and more expensive in these days. To increase the customer retention it is necessary to understand the customer needs and to react early in case of changes of their needs. Therefore having good information about the clients is indispensable. Only with these data, customers can be addressed in an individual way so that the needs of every individual client can be satisfied. 1 CRM can only work if there is a continuous control on the customer satisfaction. CRM is today one of the most important strategies for companies in order to have advantages on the market. 2.2 Citizen Relationship Management CiRM While CRM is used for private enterprises the term Citizen Relationship Management (CiRM) or Public Relationship Management (P/CRM) is used for the CRM strategy in the context of public administration. CiRM transfers the concepts of CRM to the specific conditions of public administration. 1 according to Rapp, R.: Customer Relationship Management, chapter 2

7 Term and Placement of the CiRM 7 The main aspect of this transfer is to understand the citizens as clients of public services. One of the main goals of the CiRM is increasing the satisfaction of citizens. 2 There a many aspects of CRM which can be simply used in CiRM, but there are also aspects which does not fit. The transfer from CRM to CiRM is treated in chapter 3 of this paper. 2.3 E-Government and New Public Management (NPM) The concepts of E-Government extend the access to public services by an electronic channel. Reaching a higher satisfaction of the citizens is one of the goals of E-Government and is very important to create a system which is focussed on the individual needs of citizens. This is the starting point for CiRM. A citizen-orientated E-Government can only be implemented with the concepts of CiRM. The New Public Management (NPM), which is discussed since the 80s of the last century, can be seen as a kind of pre-stage of CiRM. NPM deals with the reform and modernisation of public administration. The main goals of NPM are: 3 increasing the client- and service-orientation reduction of citizens disenchantment with politics increase efficiency with decentralisation and reduction of hierarchies cost savings reformation of the administration (continuous learning process) These goals are very closed to the effects of CiRM, so that it is necessary to get the transfer to CiRM in order to have the relevant base for reforming the public sector, based on the ideas of NPM. 2 cp. Daum, R.: Electronic Government, page 81 3 according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page 62

8 From CRM to CiRM 8 3 From CRM to CiRM 3.1 CRM in Private Enterprises According to the definition of CRM 4, it is described by four basic principles: individualisation (matching of products to the client) interaction (long-term relations to clients with mutual communication) integration (including the client into the planning process) selection (which are the relevant clients) 5 These principles have to been followed to get a successful CRM strategy and to get benefits out of it. The private enterprises have different goals of CRM. A study of the department of informatics of the University of Fribourg 6 presents the goals of CRM for Swiss enterprises and organizations. The main goals are: increasing of the customer satisfaction evolution of the company s image sales increase more individual addressing the client better information about clients 7 These main goals which pursue an increase of the customer retention and basically an increase in sales are more or less economic goals. But the basic philosophy, which is committed to CRM the provision of a high-class and customer orientated service is in public administration (CiRM) of prime importance, too. 4 see chapter according to Bleyer, M./ Saliterer, I.: Citizen Relationship Management 6 see Department für Informatik der Universität Fribourg: Marktstudie see appendix I

9 From CRM to CiRM Transfer of CRM to Public Administration: CiRM CRM is a good model for the optimization of the interaction with citizens. But there are many concepts in CRM, which cannot easily be used in public administration. So there must be a transfer to CiRM. In this context, the main difficulty is the term of the client. On the one hand, the citizen is not simply regarded as client in these days. The basic reason for this problem might be that public administration offers its services as a monopolist at fixed administrative prices. 8 On the other hand, there is no clear definition of the client in public sense. While there is a clear definition in economic sense (a client buys goods or services from the provider in order to cover his needs) the term in the public sense is complex. An easy way for a definition is that citizens, companies, clubs, organizations etc. are regarded as customers of public services. But this approach is undifferentiated. This is easily shown by the consideration that in a democratic country the citizens are also indirect the initiator of the public services. 9 In order to get a better understanding of the customers of public services the KGSt divides into the following ten types or groups: figure 1: classification of customers of public administration 10 This classification shows that the client in the public sense has to be treated very different, according to CRM s basic principle of segmentation. 8 cp. Daum, R.: Electronic Government, page 82 9 according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page see Bleyer, M./ Saliterer, I.: Citizen Relationship Management, page 325

10 From CRM to CiRM 10 In addition to the difference of the term client there are more differences which have to be transferred if this is possible. For example, there is a difference according to the estimation of the importance of CRM for private enterprises and CiRM for public administration. This difference exists because of the special goals of CRM for companies, which cannot be easily transferred to the public administration, for example sales increase by an increase of the customer retention. Therefore it is useful to check whether advantages and disadvantages of CRM, on the one hand for the companies and on the other hand for the customers, are transferable to public administration and citizens (see figure 2 and 3 11 ). figure 2: CRM transferable in the provider s view? As figure 2 shows, the different advantages and disadvantages (according to the concepts of CRM) are extensively transferable to public administration. The reasons why some aspects are not directly transferable are almost in the irrelevancy of these reasons for public administration, for example the creations of market entry barriers. 11 according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page 64f

11 From CRM to CiRM 11 figure 3: CRM transferable in the customer s view? As figure 3 shows, the customer of public administration would benefit of the transferred CRM advantages and would be only affected adversely in parts by the disadvantages. Against the background of this comparison, CRM is theoretical transferable to CiRM. But it is also important to check whether CiRM is useable in today s administrative structures. According to the characteristics of these structures, the following main aspects are dangerous for the implementation of CiRM: centralized organized processes numerous regulations and rules hierarchical line-and-staff principle very broad horizontal product range 12 These problematic aspects regarding to an implementation of CiRM should not be viewed as obstacles, but rather as an indicator for the necessity of CiRM as a strategy which is extremely oriented at the needs of the citizens in order to achieve the goals of NPM according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page see chapter 2.3.

12 From CRM to CiRM Necessity for CiRM in Public Administration In the context of the discussed reformation of the public administration, the using of economic concepts of management in the administration gains in importance. CiRM is necessary for achieving the goals of NPM and to get the favoured effect of reforming the administration. For example, a reduction of hierarchy, decentralisation and above all cost savings 14 can only be achieved with a powerful, well implemented CiRM. But this is only one part of describing the necessity of CiRM. In addition to discussing this in public administration s sense, it is also very important to point out the necessity of CiRM for citizens. The usage of the internet is still rising 15. More and more citizens use the internet, but in very different ways. Therefore a model of classification has been established. There are the following types of online users 16 : Online-Surfer ( is just surfing ; wants to be entertained and informed) Online-Communicator (browses regularly to the agency and uses the website for getting information and public services) Online-Community-Member (is active and gets involved personally; agrees with giving his personal data if necessary) Online-Citizen (has large confidence in public administration; uses web based public services even when important data are involved) These four types of online users show that an individual addressing on the part of the administration is necessary, because e.g. an Online-Surfer is overstrained by services for Online-Citizens and an Online-Citizen is not satisfied by services for Online-Surfer. In order to provide a higher orientation to the citizens needs together with the explained individual addressing, it is necessary that public administration implements the CiRM strategy. 14 according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page see appendix II 16 cp. Meier, A.: Online-Kommunikationsmodell, page 79f

13 Status Quo Usage of CiRM today 13 4 Status Quo Usage of CiRM today 4.1 Usage of CiRM today After noticing that an implementation of CiRM is necessary for public administration 17, this chapter deals with an empirical study, which shows to what extent the different elements of CRM are already used in public CiRM 18. This study has analysed 94 different public agencies with an average number of customers of and an average number of employees of 561. Environ 88% of the employees have direct contact to the customers. 52% of the public agencies provide a citizen office and 49% provide E-Government services. After all 4.2% of the agencies have a department, with an average of 2.5 employees, which works explicit on CiRM topics. The study is based on the elements of CRM/ CiRM 19. In the first part the importance of the different elements has been measured (see figure 4): figure 4: importance of the different CiRM elements for public agencies 17 see chapter see Wilde, K.D.: study Customer Relationship Management the main elements of CRM/ CiRM are shown in the chapters 2.1., 2.2. and 3.1.

14 Status Quo Usage of CiRM today 14 As figure 4 shows, a lot of elements of CiRM are of little importance for the public agencies. The points of segmentation, profitability and above all IT systems have the worst values. This shows that principle elements of CiRM are not treated with the required importance by the agencies. These difficulties in understanding CiRM strategy are one of the basic problems of a successful implementation. The second part of the study shows in what extent the different elements of CiRM are today realised by the agencies (see figure 5): figure 5: realisation of the different CiRM elements by public agencies Figure 5 shows that CiRM (as whole strategy) has not yet been realized by the agencies. Only a couple of the elements of CiRM have been realized. But the main points, which are necessary to implement an integrated CiRM have not yet been realised, for example, the IT systems and the individualisation. It is noticeable that there is a correlation of the importance and the status quo of the realisation except the individualisation. This is interesting, because this element has the highest measure of importance and one of the lowest of realisation. This aspect shows that there are significant difficulties in understanding CiRM and therewith fundamental problems by the implementation.

15 Status Quo Usage of CiRM today 15 The study shows that CiRM is not really used by the public agencies in these days. A transfer of CRM to CiRM is possible, but has not been fully realised. Only parts of CiRM are used, but this shows once more, that there is a difficulty in understanding CiRM as an integrated strategy on the part of public administration. But the study shows also that the agencies are keen to orientate their services to the customer and see the need of CiRM. The study also asks what the reasons are, which constrain the realisation of CiRM. The main reasons are a high expenditure of time in connexion with missing human resources. 4.2 Potentials by using CiRM This chapter points out some different potentials and chances of CiRM which are implicated by an integrated implementation in public administration. Besides the chances of the different elements, there are more generally potentials of using CiRM. One of the largest potentials is that a well-done implementation of CiRM, which is highly orientated at the customer and covers well his needs, could decrease disenchantment with politics. The trend of disenchantment with politics is growing in these days, because agencies are not enough orientated to the citizens and the politic is inaccessible for many citizens. The elements of CiRM would counter this trend. Besides the potentials relating to administration the citizen also gets benefits of an implementation of CiRM. With an integrated processing, the citizen gets better services and the speed of the processing would increase and above all, the citizen has not to give the same data to different agencies. 20 These two examples of potentials of using CiRM should finally emphasise the importance of CiRM and a connected reformation of the administration in the sense of NPM. 20 according to Bauer, H./ Grether, M.: Öffentliche Verwaltungen, page 84

16 Summary and Outlook 16 5 Summary and Outlook The public administration is in a process of reformation in these days, which is necessary in order to arrange the administration at the changed needs of the citizens. Today s modern citizen wants to choose on himself the way of communication with an agency. Regardless which way he uses, the agency should have all his data and treat him in that way, he prefers. In order to realise such an orientation at the needs of the citizens, public administration has to use CiRM, because only a well implemented integrated CiRM provides these opportunities. As in chapter 3 shown, it is theoretical possible to transfer the ideas of CRM to the public sector - to create a CiRM. But as in chapter 4 shown, the different public agencies hesitate by a real implementation, because they do not understand CiRM as whole strategy and because of missing capacities. If a public administration wants to use CiRM and get benefits out of the linked possibilities, it is necessary that the corresponding human and financial resources would be provided. Only with well educated experts, a successful implementation can be reached. In the future, it is assumed that the usage of CiRM in public administration will increase. Public administration already noticed that there is a fundamental necessity of an implementation of CiRM in order to be arranged to the modern citizen. The orientation at the citizen becomes more and more important and public administration will see sooner or later that cost savings and the reduction of the degree of bureaucracy could only be achieved with a well done implementation of CiRM. There are good conditions on the part of public administration that CiRM can be successful implemented. Moreover there is already an understanding and there are a few agencies today, which already have an own CiRM department and which can be viewed as kind of example. CiRM cannot solve every problem in today s public administration, but it is one important part of an extensively modernisation of the administration.

17 Appendix Summary and Outlook 17 Appendix I: DIUF Study: Internet & CRM Goals of CRM: source: Dep. für Informatik der Universität Fribourg: Marktstudie 2002, p.35

18 Appendix Summary and Outlook 18 Appendix II: ARD Study: Usage of Internet source: ARD/ ZDF: Online-Studie 2005, p.363

19 Bibliography Summary and Outlook 19 Bibliography Accenture, 2001: Customer Relationship Management A [Blueprint for Government], New York, 2001 ARD/ ZDF, 2005: [Online-Studie 2005], 2005 Bauer, Hans H.; Grether, Mark, 2004: [Öffentliche Verwaltungen] im Zeitalter des Customer Relationship Management, published in»verwaltung und Management«, Speyer: Univ.-Prof. Dr. Heinrich Reinermann, Deutsche Hochschule für Verwaltungswissenschaften Speyer (Ed.), 03/2004 Bleyer, Magdalena; Saliterer, Iris, 2004: Vom Customer Relationship Management zum [Citizen Relationship Management], published in»verwaltung und Management«, Speyer: Univ.-Prof. Dr. Heinrich Reinermann, Deutsche Hochschule für Verwaltungswissenschaften Speyer (Ed.), 11/2004 Bock, Christian, 2004: [New Public Management] und egovernment, published in»verwaltung und Management«, Speyer: Univ.-Prof. Dr. Heinrich Reinermann, Deutsche Hochschule für Verwaltungswissenschaften Speyer (Ed.), 09/2004 Daum, Ralf, 2002: Citizen Relationship Management und [Electronic Government], published in»hmd Praxis der Wirtschaftsinformatik 226: E-Government, Meier, Andreas (Ed.)«, Heidelberg: D-Punkt Verlag, 08/2002 Department für Informatik der Universität Fribourg, 2002: Internet & Customer Relationship Management [Marktstudie 2002] in Schweizer Unternehmen und Organisationen, Fribourg: 2002 Meier, Andreas, 2002: Citizen Relationship Management, ein [Online- Kommunikationsmodell] für Bürgerinnen und Bürger, published in»hmd Praxis der Wirtschaftsinformatik 235: IT-Lösungen im Handel, Hildebrand, Knut (Ed.)«, Heidelberg: D-Punkt Verlag, 02/2004 Rapp, Reinhold, 2000: [Customer Relationship Management] Das neue Konzept zur Revolutionierung der Kundenbeziehungen, Frankfurt/ Main: Campus Verlag GmbH 2000 Scheer, August-Wilhelm; Kruppke, Helmut; Heib, Ralf, 2003: E-Government [Prozessoptimierung] in der öffentlichen Verwaltung, Berlin: Springer Verlag 2003 Wilde, Klaus D., 2000: [study - Customer Relationship Management 2000] Eine Studie des Lehrstuhlstuhls für Wirtschaftsinformatik der Katholischen Universität Eichstätt, published in»absatzwirtschaft«, Düsseldorf: Verlagsgruppe Handelsblatt GmbH, 2000