Government warming to on-demand CRM

By Barney Beal, News Director 07 Sep 2007 | SearchCRM.com

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SaaS, typically considered faster and less expensive to implement, might seem a natural fit for government agencies. Yet public agencies have lagged behind the private sector in warming up to the deployment option.

"That just follows the normal curve," said Denis Pombriant, managing principal of Stoughton, Mass.-based Beagle Research. "Government and nonprofits are never the first to adopt new technology. When prices come down and technology is more bulletproof, you see more adoption not just in government, but higher ed."

For nearly three years, the Chicago Housing Authority (CHA) has been using the SaaS CRM product from San Francisco-based Salesforce.com for case management and tracking of residents in its properties.

For more on vertical CRM See how CRM fits into the financial sector Learn how SaaS CRM vendors are going vertical

"It's really a way for us to measure who is working with our residents and what type of progress families are making," said Lukas Fopma, senior case manager with the authority.

The CHA had been manually entering into spreadsheets data regarding residents and the social service agencies that work with them and knew it needed to automate the system. It considered some packaged case management software as well as custom development, but neither really fit the CHA's needs. Instead, it brought in Model Metrics, a Chicago-based partner that specializes in deploying Salesforce.com in government agencies, customizing and implementing the application for them.

"Salesforce.com takes a lot of risk out of the process," said John Barnes, vice president of technology at Model Metrics. "When we rolled this out, we tried to bring to bear our public housing expertise and the needs we heard during meetings with the CHA. The biggest challenge was change management, which we managed through training and rollout support."

RightNow's footprint in government

Bozeman, Mont.-based RightNow Technologies has been selling into government accounts for years, mainly call center and customer self-service technology. Its CEO, Greg Gianforte, recently reported that its business with U.S. government customers is growing 35% annually and that it now has working relationships with 170 government customers worldwide, including 50 in the U.S.

Typically slower to move to new technologies than the private sector, government is beginning to see more on-demand vendors that cater to its needs.

"Many government entities have very specialized requirements, some of which go to issues of security and ensuring data does not get lost," Pombriant said. "By its nature, on-demand has always presented a bit of a challenge. Many vendors have stepped up to the challenge with encryption techniques that put to rest some of those issues."

Recently, the Office of Management and Budget (OMB) issued its annual guidance to heads of executive departments and agencies. It declared that SaaS can be implemented by federal agencies provided they meet the necessary security controls and standards of the Federal Information Security Management Act.

Security is not a trivial concern -- not for private companies and certainly not for government agencies that have to keep a tight lid on their constituent data.

"They have to be [cautious about security], given the nature of the data they store and the expectations that the public has for government security and its obligation to keep it secure," Pombriant said. "The average person would tell you the government has a higher duty to protect sensitive information than some local retailer."

Integrating on-demand with legacy government systems

"Another huge issue goes to integration," Pombriant added. "There's a large number of existing government systems that aren't going to be thrown out and replaced next week, simply because of the numbers involved. Making on-demand more flexible in the way it integrates with government systems is a challenge."

For example, the New York City 311 CRM deployment was a massive implementation of Siebel software that required integration with multiple city departments. Not everyone can afford integration on a scale like that, Pombriant said.

"On-demand vendors have an obligation to enable their application to integrate easily," he said.

For the CHA, Model Metrics tailored a customized version of Salesforce.com in about eight weeks. The only hiccup, in fact, was integrating to the CHA's back-end database, Barnes said.

"They used [application program interface] tools to bring in family and family members' information," he said. "There were a few minor bumps around making sure the data was mapped properly."

Though his firm deals mostly with public housing and Salesforce.com, Barnes is seeing increased interest in SaaS CRM within government.

"We have talked to other government agencies -- the L.A. Housing Authority about setting up a call center for them and using Salesforce.com to track residences, and the State of Illinois, where Salesforce might be a good fit," he said. "It is kind of a newer idea for government agencies to consider on-demand, not because they were scared of the concept, but they didn't know."

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