Much is being done to encourage local authorities to deploy customer relationship management (CRM) systems, to help them meet the 2005 deadline to put all central and local government services online. These initiatives highlight a number of obstacles to CRM that could affect companies as well as government bodies, while also indicating the possible rewards of successful CRM projects

The London Borough of Newham has recently launched a project to show how CRM technology can help authorities e-enable their services. And Onyx Software set up a CRM implementation centre last month, which is designed to let local authorities simulate CRM rollouts.

But recent research from integration software vendor NDL found many authorities were reluctant to install CRM technology. Of 247 local authorities questioned, over half had yet to install a CRM system. Difficulties of integration and cultural change were cited as the main barriers to successful CRM projects.

NDL managing director Declan Grogan said that e-services is a new topic for many councils. "Cultural change is a big barrier," he said. "Departments have to learn to let go of transactions, but this is very hard for them to accept."

Departments' existing disparate proprietary IT systems will create integration headaches for new CRM deployments, Grogan warned. But the effort could be rewarded if the resulting joined-up transaction processes create cost savings.

One benefit could be a big reduction in the time taken to process queries. "The CRM system is not the first stop, but one stop. It can answer queries, and not just take them," said Grogan. "It's about 80 percent of transactions getting sorted by 20 percent of the people for 20 percent of the cost."

However, Angus Dunlop, business manager for the public sector division at software and outsourcing specialist Northgate Information Solutions, said the culture of local authorities could be an obstacle to implementing CRM. "Benefits practitioners will insist nobody else can do their job," he said. "But a piece of rules-based software will enable anybody to take claim details and make an initial assessment. It prevents a specialist from spending time over a claim that will eventually be rejected."

To assess the requirement for CRM systems, managers should first investigate organisational processes to identify where improvements could be made through online systems to save resources. Dunlop cited the example of the hall-booking process of one authority, which required a £30 deposit. "When they investigated how many times the deposit had been [permanently] retained it was never, so that whole process - and associated costs - was done away with."

Halton council is one local authority that has implemented a fully-functional CRM system. "We wanted a product that would allow our customer service advisers to have single log-in and deliver all services," said Roy Wainwright, head of customer services at Halton. The council deployed a system based on Amdocs' ClarifyCRM product, with a front-end system developed by Northgate.

For Halton, integrating its existing systems was the difficult part of the transition. "You need the suppliers of legacy systems to give you doors into it, via XML or APIs," said Wainwright.

The council's new CRM system allows advisers to handle queries about all Halton's services. "The system has increased efficiency all round as we can stop repeat visits, save time and money, and be more proactive," Wainwright said.

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