How CX Leads to Higher ROIs in the Federal Market


Don’t modernize for modernization’s sake.

Government today, perhaps now more than ever before, is under tremendous scrutiny to be transparent in their spending and to demonstrate the expected ROI of procurements, especially those in the information technology space.

A prime example of this kind of pressure is the division as a result of the congressionally-approved Technology Modernization Fund, which faces an uncertain future. Agencies who have received funding through the vehicle have yet to begin demonstrating results, which has sprouted some concern as to whether they’ll be able to meet the mandatory reimbursement requirements. As a result, many legislators have begun to reject the notion of putting even more money into the fund, without first seeing any return.

While well-intentioned, the fund is suffering from what has plagued many agencies and initiatives before—a lack of clear measurements that define success. Technological advances often made for the sake of modernization, without first confirming the kind of impact the solution might have or asking if it addresses a problem, is of real concern. This can quickly lead to bloat, misused funds and resulting frustrations.

Rather than continuing to make investments without the critical data needed to demonstrate the rationale and the projected outcomes, agencies can turn to customer experience (CX) to provide a consistent return on investment that continues to build upon itself, helping leaders ensure their investments are worthwhile instead of costs snowballing that will require further justification.

The Growing Need for Resourceful Investing

Case in point. In 2018, it was reported that when a citizen calls an IRS contact center, it costs the agency $41 to service them. Resultantly, the IRS spent millions of taxpayer dollars in order to support call centers that receive 116 million calls each year. Furthermore, the IRS spent money to improve wait times and diminish operator inefficiencies without first understanding what was causing an influx of calls. Rather than directing resources ‘blindly,’ customer feedback could have helped the IRS better understand why people are contacting call centers in the first place, thus ensuring resources are directed to the right place to solve the problem.

Hypothetically, agency leaders would be smarter about where they spend and how they service tax-paying citizens, making it easier for them to interact digitally—a solution that ultimately could cost the IRS pennies on the dollar.

Innovating with the Citizen in Mind

In an effort to keep up with the private sector, innovation stays at the forefront of public sector leaders’ minds. And while it is always well-intentioned, execution does not always yield the best return. To continue on the previous example of the IRS, agency leaders recently made huge investments to implement Virtual Assistance Centers that few people used and ultimately resulted in very little in return. In fact, “auditors also said the program suffer[ed] from a lack of defined goals and performance metrics.”

It’s easy to make investments for the sake of innovation, falling victim to the “shiny new object” mentality, but government agencies must be held accountable for their spending, and if these investments don’t have a real impact on the service delivered, then they may not be the best fit for that agency.

Not only does investing in experience management (EX) align with the Administration's objectives set forth in the President’s Management Agenda for improving citizen services (and those included in the TMF), but it also delivers tangible ROI in a short amount of time and only continues to drive value as it matures, improving operational efficiencies and how citizens and employees interact with the government.

Improving ROI, Improving Quality of Life

When using customer feedback to make more informed investments, it’s important for agencies to remember that the ROI is not limited solely to fiscal numbers. For example, at the Veterans Affairs Department, when internal employees engage in EX practices and use feedback to improve services, it can have a very tangible impact on veterans’ and their families’ qualities of life. By giving them a platform to share their experiences, VA leadership learns how to better serve the agency’s benefactors, what it’s doing well for individuals, but also where its system might be failing others. This feedback helps government employees recognize what needs to change and then craft a plan to turn insight into action in order to best support the agency’s mission.

By investing in experience management and obtaining feedback from citizens, employees or patients, agencies can have access to robust and comprehensive insights that would be otherwise unavailable. Having this feedback enables a more holistic understanding of customer pain points, which helps federal leaders pinpoint concerns and use this data alongside existing insight, like CRM, ERP and operational data.

Implementing EX not only helps consolidate redundant spending and improve operational efficiencies but, when married to key operational data, can be used to inform future prioritization and spending for decades to come.

Zachary Trojak is a principal for public sector at Medallia, Inc.