Federal Government CRM Spending to Reach $500 Million

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U.S. government spending on CRM systems and services will increase from $230 million in 2001 to more than $520 million in 2006 at an annual growth rate of nearly 18 percent, according to a report released yesterday by INPUT, an IT and Electronic Business information and marketing services firm.


"Federal agencies will need to comply with the Government Paperwork Elimination Act by the end of fiscal year 2003, providing electronic options for paper-based processes, including customer interactions," says Payton Smith, manager of public sector market analysis services at Chantilly, VA-based INPUT. "We see GPEA as the principal driver for growth in this marketplace."


According to the report, spending on CRM systems and services will be highest among civilian agencies with large customer service obligations, such as the Internal Revenue Service and the Social Security Administration.


The report also cautions that privacy concerns could be a significant obstacle to growth in the Federal CRM market place.


However, Smith said, "With the potential benefits that CRM solutions promise for the U.S. government, INPUT expects Federal agencies will work quickly to address privacy concerns and overcome any potential barriers."


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