PeopleSoft to sign $10M deal with IRS

Summary:The company is expected to announce a $10 million contract next week with the Internal Revenue Service, which plans to revamp its aged computer systems.

PeopleSoft is expected to announce a $10 million contract next week with the Internal Revenue Service, which plans to revamp its aged computer systems and enhance its customer-relationship processes using the company's software.

Still reeling from criticism in the past couple of years from taxpayers and government officials for not being taxpayer-friendly enough, the IRS plans to implement PeopleSoft's customer relationship management (CRM) software, government officials confirmed Thursday. The software enables organizations to manage their front-office operations--that is, sales, marketing and customer service.

The contract is a significant victory for PeopleSoft, which has lagged behind rivals such as SAP and Siebel Systems in the lucrative market for front-office software.

The deal is part of a governmentwide initiative to have agencies improve the way they buy products from suppliers and communicate and connect with taxpayers. The push to boost technology and Internet adoption within the federal government has been dubbed "e-government" by some.

In a recent survey, Jupiter Media Metrix found that despite high-profile efforts by the Clinton administration to increase the number of transactions between businesses and the government, only 1 percent of federal spending occurred over the Internet in 2000.

Motivating the IRS to get its customer-service act together is heated criticism that has come from taxpayers and government officials who say the agency has not done enough to make its services easy to use. In 1999, Congress held hearings to get testimony from taxpayers regarding their grievances with the IRS and from IRS officials explaining how they planned to remedy the issues raised.

By 2000, Congress appropriated $506 million for technology upgrades at the IRS under the Business Systems Modernization Program. For 2001, the IRS was given $432 million for further information technology upgrades, and the agency expects another $390 million in 2002.

For PeopleSoft, the contract adds to the growing momentum the company has developed behind its CRM strategy. The Pleasanton, Calif.-based software company has been on the CRM march since May, when it tweaked its PeopleSoft 8 CRM product with additional Web features and analytical applications.

IRS projects based on PeopleSoft's CRM software should start by next summer, when the agency expects to introduce an improved online service for certified tax preparers. Companies like H&R Block will be able to access more information about their clients' accounts, like made or missed estimated tax payments, agency officials said.

"The second phase of their implementation will focus on how the agency will interact with taxpayers," said Ron Sullivan, general manager of PeopleSoft's federal government group. "They are looking at all best practices across the private sector to see what will work for them."

Come 2004, taxpayers will be able to see the same information online as do IRS agents answering their phone calls, and the agents will have access to the records of the tax history of the callers, agency officials said.

Once implemented, the CRM system will be the latest in a series of upgrades the IRS plans to do to its 35-year-old computer system.

Topics: Enterprise Software, Government, Software

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