PeopleSoft sells 'user-friendly' software to IRS

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By Todd R. Weiss

(IDG) -- The much-maligned Internal Revenue Service is pushing forward with its ongoing plans to be more user-friendly, by buying customer relationship management (CRM) software from PeopleSoft Inc.

The deal, valued at more than $10 million, will provide the IRS with the full PeopleSoft 8 CRM suite to make it easier for taxpayers, professional tax preparers and the IRS itself to obtain tax records and other information online around the clock.

The sale will be be formally announced Monday at Pleasanton, Calif.-based PeopleSoft's user conference in Atlanta.

"Certainly, the IRS wants to be more open," said Ron Sullivan, general manager of PeopleSoft's federal government sales. "This is a statement by them that they are reaching out" to taxpayers and preparers to make it easier to communicate with and get needed tax information from the agency.

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The IRS will obtain enterprise licenses for the Web-browser-based software package, allowing it to run the application on multiple computing systems used by the agency, including Unix and Windows NT. That adaptability was a major reason the agency chose PeopleSoft, Sullivan said.

The first phase of the deployment will begin next summer, with full implementation expected by 2004.

An IRS spokesman said the move toward using CRM software is part of the agency's ongoing effort to modernize and become more customer-friendly. "It is all based on the customers, the taxpayers," the spokesman said. "It's going to help everybody."

The CRM package from PeopleSoft will allow the agency to create separate tax data Web portals for professional preparers and taxpayers while building a private portal for IRS employees.

"We're trying to get the information to people in different sectors -- to be able to access the information when they want it and how they want it," the spokesman said. By moving data access online, the agency will be able to save money that's now spent on call centers and live agents who provide such information over the telephone.

The agency's IT infrastructure has evolved over the past 35 years, he said, and often falls short of being able to conduct operations efficiently. By moving to CRM software and other modernization steps, including transferring massive amounts of tax information from old batch-process flat files into new database applications, the agency is slowly heading toward beneficial changes, he said.

Sharon Ward, an analyst at Hurwitz Group Inc. in Framingham, Mass., said the CRM move is a good one to make it easier for taxpayers to deal with the agency, adding that it's ironic that it's coming from the IRS.

"I do find it humorous to hear 'IRS' and 'CRM' in the same sentence together," Ward said. "I think it's important that the government is realizing that it may have a monopoly but that it can't get away with acting like one."

Sheryl Kingstone, an analyst at The Yankee Group in Boston, said the shift to integrated CRM will allow the IRS to see real financial savings by pushing more taxpayer inquiries to the Web and away from costly telephone interactions.

"That's the major trend of CRM: to get people out of the call center and into self-service," Kingstone said.

Earlier this month, PeopleSoft won a contract with the Defense Department to deploy the company's human resource management software to oversee the records of 3.1 million military personnel around the world.