Customer Relationship Management (CRM) technology and organizational change: Evidence for the bureaucratic and e-Government paradigms

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Abstract

This paper examines the impact of Customer Relationship Management (CRM) technology on organizational change in local governments in the United States. The bureaucratic and e-Government paradigms are examined with regards to this technology impacting organizational change. Survey evidence on the adoption of CRM is examined from the perceptions of Chief Administrative Officers (CAOs) in cities and counties that have adopted this technology. Survey results indicate that both the e-Government and bureaucratic paradigms impacted organizational change from CRM adoption. Factor analysis shows that management change, efficiency change, and leadership and organizational change are the three most common factors in the models. Regression results indicate that local governments that score high on these factors are more likely to take an enterprise approach in the adoption of CRM for their local government. The results of this study imply that organizational change is not just influenced by the more recent e-Government paradigm, but traditional attributes of the bureaucratic model are present as well.

Research highlights

► e-Government and bureaucratic paradigms are examined in this paper. ► Local government survey of Customer Relationship Management adoption is examined. ► The e-Government paradigm had the greatest influence on organizational change. ► Organizational change is also influenced by the bureaucratic paradigm.

Introduction

Most of the recent literature on IT and public administration has argued for the importance of the e-Government model to institute organizational change in government, while the bureaucratic model has received very little attention in the literature (Norris & Moon, 2005). [U1]

This paper examines both the bureaucratic and e-Government paradigms and their influence on the adoption of Customer Relationship Management (CRM) technology in local governments in the United States. CRM can be defined as a software application that is used to track interactions with residents in a local government on an ongoing basis and allows governments to manage this data. CRM for local governments incorporates, as part of the call center function, the ability to manage citizen non-emergency calls into one centralized system. CRM creates opportunities for citizens to participate in government (Schellong, 2008). Engaging citizens in government is one of the key visions of e-Government advancement (Thomas and Streib, 2003, Welch et al., 2004, Jones et al., 2007, Caillier, 2009).

The bureaucratic paradigm is found in the traditional literature on the impact of Information Technology (IT) adoption in public administration (Fountain, 2001, Ho, 2002). In this literature, there is an emphasis on the improvement in the internal workings of government as a result of IT adoption. The e-Government paradigm, is more recent, and research in this area has proliferated with the rise of the internet in the mid-1990s. e-Government focuses on IT creating results in government, with its external and more transformative impact on public service delivery (Grant & Chau, 2005). Most of the recent literature on IT and public administration has argued for the importance of the e-Government model to institute organizational change in government, while the bureaucratic model has received very little attention in the literature (Norris & Moon, 2005). However, in this paper, there is an argument that one must understand both of these paradigms in order to realize the true potential of IT on organizational change (Heintze and Bretschneider, 2000, Kraemer and King, 2006).

This paper shows through survey evidence of Chief Administration Officers (CAO) the impact of CRM systems on local governments. The CAO is the top administrator for a local government and should have knowledge of the broad impact of CRM on organizational change. The research question of this paper is: What is the importance of the bureaucratic and e-Government paradigms for explaining organizational change through CRM? This article argues that in order to understand e-Government in the present context, one must understand the importance of IT on bureaucratic change as well.

Most of the existing research has examined CRM in private sector organizations (Fjermestad & Romano, 2003), with very little empirical research that examines this technology in the public sector organizations (King, 2007, Schellong, 2008). There needs to be more research on CRM in public sector organizations because of key differences from the private sector such as the absence of market incentives, the need for high levels of accountability, and multiple and ambiguous goals of public organizations (Bozeman and Bretschneider, 1986, Pan et al., 2006). In addition, citizens prefer to use different contact channels depending upon the problem they want to address. They prefer to use the internet more for research-oriented activities, but prefer the phone to solve problems (Pew Internet and American Life, 2007). Therefore, citizens prefer different channel choices when initiating contact with government, which makes understanding CRM adoption especially important (Ebbers, Pieterson and Noordman, 2008).

This study is different from existing research in that it examines through survey evidence the impact of CRM on organizational change. There is very little survey research completed on this important and emerging area of e-Government research. This study also examines the perceptions of CAOs and their influence on shaping organizational change in the public sector. CAOs are critical stakeholders in shaping IT and organizational change in their governments.

This paper is divided into several sections. The next section examines how CRM technology creates an enterprise approach in public sector organizations. This is followed by a discussion of the bureaucratic and e-Government paradigms and what both theories say about organizational change through CRM. Survey evidence is then presented examining the views of local CAOs on the adoption of this technology for their government. Statistical evidence on the impact of CRM for local governments is discussed in the final sections of the paper. The conclusion to this paper stresses the importance of knowing both the bureaucratic and e-Government paradigms in order to understand organizational change from IT.

Section snippets

Enterprise approach and CRM

One way that IT can improve the performance of government is by focusing on an enterprise approach (Bannister, 2001, Landsbergen and Wolken, 2001). IT is said to be able to integrate public sector organization to better focus on its mission (Ebrahim and Irani, 2005, Hjort-Madsen, 2007). CRM technology, for instance, has the ability to integrate the customer service function into a centralized information system. This technology will reduce or eliminate the need to have separate customer service

Bureaucratic paradigm and e-Government paradigms

Table 1 shows two common paradigm or models of IT adoption and their impact on organizational change (Ho, 2002), and applies them to CRM technology. The first paradigm is the bureaucratic and has the longest history in the literature on IT and public administration. The second paradigm is the e-Government, which has a relatively short history, but has a lot of say about organizational change in the public sector. The e-Government paradigm advocates for the transformation of the organization as

Survey sample characteristics

In the survey, 311/CRM was defined on the survey instrument as a software application that tracks interactions with residents in a local government on an ongoing basis and allows governments to manage this data. Generally, 311 incorporates CRM as part of the call center function to answer citizen non-emergency calls in one system. Some programs consolidate an existing customer service phone number into a single “311”, or specific 7 digit hotline number. In the United States, because of the

Survey results of 311/CRM and the enterprise approach

Table 3 provides information on the impact of the 311/CRM system creating an enterprise approach to public service delivery, the key question of organizational change in this paper. The five-point Likert scale question presented CAOs with the following statement: 311/CRM in my local government takes an enterprise approach, looking at the whole of government rather than separate departments. This statement resulted in a range of responses from strongly agree to strongly disagree. This statement

Survey results of bureaucratic and e-Government paradigms

Table 4 shows the survey results examining the two paradigms of IT and public administration: the bureaucratic and e-Government approaches. As mentioned in the literature review, there were six factors identified in the literature that are bureaucratic reasons for IT and organizational change. Survey questions were asked for each of the six bureaucratic factors: efficiency, standardization, cost savings, workflow management, productivity, and workforce reduction. There were also six

Factor analysis of bureaucratic and e-Government paradigms

Table 5 provides factor analysis of the 12 survey questions from Table 4. Factor analysis can be used to explore the impact of groups of variables together and extract from them the most common factors that explain variance. Factor analysis is ideal for reducing a large number of variables into a smaller number of factors for modeling purposes. It is a way to select a subset of variables from a larger set, based on which original variables have the highest correlations with the principal

Regression results

Table 6 examines through Ordinary Least Squares (OLS) regression the impact of the enterprise approach variable, as noted in Table 3. This variable is regressed on the three factors indentified in Table 5, along with two additional independent variables. The dependent variable is taken from the survey question: 311/CRM in my local government takes an enterprise approach, looking at the whole of government rather than separate departments.

There were two additional independent variables added to

Conclusion

This paper has examined the impact of CRM technology on organizational change in local governments. The survey results indicated the impact of both the bureaucratic and e-Government paradigms on organizational change in local government. The survey results showed that both models had an influence on the use of CRM technology in local government. The influence of the e-Government paradigm had a slightly greater influence on organizational change than the bureaucratic paradigm for local

Christopher G. Reddick is an Associate Professor and Chair of the Department of Public Administration at the University of Texas at San Antonio, USA. Dr. Reddick's research and teaching interests is in information technology and public sector organizations. Some of his publications can be found in Government Information Quarterly, Electronic Government, and the International Journal of Electronic Government Research. Dr. Reddick recently edited the two volume book entitled Handbook of Research

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