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Challenges for CRM implementation in Public Sector

As we know, Customer Relationship Management (CRM) is a strategy and methodology to manage ongoing and future relationships with customers. CRM today is growing rapidly and harping on this unprecedented CRM growth are public sector enterprises (PS). These are government organizations which work for the benefit of citizens directly or indirectly. Governments are increasingly getting on CRM bandwagon to improve services across multiple channels and deliver fair assessments to citizens being transparent in every possible way.  In this blog, I wish to discuss the key challenges which we faced while implementing CRM for public enterprises.

Stakeholder Management - Implementation of CRM program for public sector enterprises requires satisfying interests of multiple stakeholders. Stakeholders include central/ local governments, finance ministry for budget allocations, staff, IT department and citizens to name a few. Change Management is equally crucial challenge while dealing these enterprises. The resistance to change is pretty high due to the breadth of services offered.

Budget and Profitability - The most crucial of them all - Governments walk on a tight budget aiming to impart better quality of life for citizens along with meeting budget compliances. After all, governments and public institutions are run by tax payers' money and they are very much answerable to their citizens. Several companies implement CRM programs with the sole aim of segmenting its customers and servicing the profitable customers in more favorable manner. However, in case of public sector organizations, all citizens need to be treated equally. Motive of profitability being absent makes it all the more difficult for convincing stakeholders, getting requisite approvals and. Governments, thus must provide citizens with transparent and impartial visibility to the policies and rules.

Complexity - Public sector industry is usually described by high regulations, standards, and policies which in turn leads to high response times due to presence of multiple legacy systems. In our public sector implementations, 360 degree customer data being fetched spanned across 20 disparate systems. All of this makes defining entire CRM approach a much more exhaustive and complex process for public sector enterprises. Silos are further underlined when citizen approaches the government via different channels/ departments. Last but not the least, governments are also marred by plethora of rules, policies, regulations and standards which makes the task of CRM implementation all the more difficult.

Data - The amount of customer information/ data for citizens is enormous. Public sector organizations are invariably looped in to various citizen service departments. All these departments are further interrelated making data all the more extensive. Plus, these PS enterprises also work on globally laid down regulatory frameworks which leads to increased amount of information exchange between states and countries.

Here, I wanted to share with readers a feel of how different it is to work for implementing CRM for a public sector industry vis-Ă -vis that for any other industry. Although CRM is ask for the day, public and other sectors quite differ in formulating the CRM strategy, in their approach and constraints. As part of my subsequent blog I will explain how we managed to address these challenges. I hope this blog provides budding consultants and business analysts an opportunity to gear up for their next PS implementation!


This is very useful blog to get the brief information about customer relationship management with excellent content.Maintaining the CRM is very important for every business. we are also deal in cloud based CRM software solutions kindly visit us to know more about CRM

Dear Mehul Joshi , this is very useful to the basic learners. But, I bring to your notice that- in the public sector, as a monopoly sector, bureaucratic carelessness dilutes and no need to satisfy the customers. Thus, you will elaborate the blog in this regard.
FROM: Dr.T.V.Ramana, Dept of Economics, Andhra University Campus Kakinada, Andhra Pradesh, India

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