Profiting from CRM outsourcing opportunities in the US public sector

Date: April 22, 2010
Pages: 20
Price:
US$ 1,495.00
Publisher: Ovum
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: PD5DCFE3576EN
Leaflet:

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Profiting from CRM outsourcing opportunities in the US public sector
Although contact center outsourcing began largely in commercial enterprises, the government sector has emerged as a bourgeoning market for outsourcing in recent years, with agencies under constant pressure to keep costs low and service levels high. Given the recent global financial crisis, government budgets in particular are increasingly strained, due to the combination of reduced tax revenues and increased reliance on government, from processing medical claims to inquiries about unemployment. The recent financial crisis has provided an opportunity for policy-makers and vendors to re-examine what government is best suited to deliver, and how government funds can be best spent to maximize return on investment for taxpayers.
SUMMARY

Impact
Ovum view
Key messages

THE US PUBLIC SECTOR APPEARS PROMISING FOR CRM OUTSOURCERS

Why CRM outsourcers need to look at the US public sector
US public sector agencies face severe operational pressures
The private sector has raised the bar for citizens’ expectations
When resources are strained, organizations re-evaluate
Increasing need for accountability in procurement
CRM outsourcing in the US public sector is set to grow
Market volume
Market growth
A growing percentage of the US CRM outsourced market
Drivers for outsourcing in the us public sector
Outsourced contact centers allow agencies to reduce costs
Outsourcing allows agencies to provide more flexible service delivery
Governments must provide citizens with increasing amounts of information
Outsourcing has become more accepted practice in government

VENDORS FACE SECTOR-SPECIFIC CHALLENGES

Outsourcers face inhibitors in the US public sector
Business model limitations
Excessive compliance requirements
Navigating public sector decision-makers
Long sales lag
Data security concerns
Need for government outsourcing pedigree
CRM outsourcing models are limited for US government clients
Onshore
Disadvantages of onshoring:
Offshoring
Home-based agents

VENDORS NEED TO CONSIDER FUNCTIONAL AND COMPETITIVE FACTORS

Trends across levels of government
At the local level, “311” contact centers have flourished
States are oriented towards streamlining access to information
The federal market is the largest and most complex level
Competitive analysis
Pure-play CRM outsourcers
Broad-based outsourcers
Government outsourcing specialists
Functional discussion
Resource-intensive functions provide the most opportunity to reduce costs by outsourcing
Incorporating multichannel access for an increasingly mobile population

RECOMMENDATIONS

Recommendations for agencies
Governments must define what constitutes a “core task”
Share best practices to help determine alternative CRM models
Outline criteria for choosing an outsourcing partner
Recommendations for vendors
Dialogue with government decision-makers wins contracts
Dedicated public sector teams reduce sales headaches
Opportunities lie in common programs across jurisdictions
Be prepared to invest time and resources into meeting regulations

APPENDIX

Further reading
Methodology

LIST OF TABLES

Table 1: Key outsourcer characteristics

LIST OF FIGURES

Figure 1: US Federal Deficit, 2007 - 2013
Figure 2: Increase in agent positions, 2009–2013
Figure 3: Percentage of US CRM outsourcing business 2009–2013
Figure 4: What is the primary reason for outsourcing in your agency?
Figure 5: Level of function complexity in relation to outsourcing development
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