Earlier this year, Webster Buchanan Research carried out a research project in the UK public sector, examining the ways organizations manage web interactions with their customers (aka citizens or taxpayers). While the public sector has a long tradition of dealing with customers face-to-face, the web offers fantastic opportunities for both parties. For customers, it allows them to get information and handle transactions when they want, rather than navigating the vagaries of office opening hours, the unpredictability of peak queuing times, and the frustrations of call centers. For public sector service providers, it offers the chance to display basic information at no cost, along with the efficiencies that often come from managing interactions electronically.

The problem many public sector organizations face, however, is in integrating the web component of their customer service offering with more traditional communications routes, whether face-to-face, telephone, fax, or mail. While private sector companies have a little bit of freedom to ‘encourage’ their customers to migrate to the web, the public sector has a duty to cater for everyone’s needs – and that includes people with limited internet experience or a simple preference to deal with real people. This issue – known in the trade as multi-channel management – is one of the most complex challenges in the customer management field.

This will be a familiar story to many HR and HRIT professionals. In a research project due to be published next month, Webster Buchanan analysts spoke at length with a number of senior HR professionals to discuss, among other topics, how they’re handling web recruitment. Without wanting to pre-announce our findings, one of the noticeable issues was the challenge of integrating applications submitted over the web with in-house systems. In fact, it’s not uncommon to find organizations boasting snazzy internet front-ends to suck in recruits and handle applications – only to print them out when they arrive in the HR department. In some cases this is done deliberately to ensure that web submissions don't receive more favorable treatment than mailed applications. But in many cases it's symptomatic of an integration problem.

These challenges aren’t insurmountable – many web-based recruitment applications really do integrate neatly with in-house HR applications. And in many ways it’s far easier for HR to handle this issue than a customer service department, where the problems are magnified by the need to extract data from a vast range of electronic and paper-based systems to answer different types of customer query. But the issue does reflect one of those truisms about IT. While the business logic behind the shift to web recruitment is hard to challenge, the practicalities can require a little bit more work than you might expect.

I ask because there’s a direct correlation between how preciously organizations protect their working practices and how much value they get out of an outsourcing arrangement. One of the fundamental principles of outsourcing is that the provider needs to achieve economies of scale – the only way you can provide a high-quality service to a large number of people is if they all to agree to do some things the same way. Of course, there’s always scope to meet a client’s special preferences – there may be no way round your chairman’s insistence on getting reports in green ink, for example – but the general principle is that the more you ask for specialist services, the more you’re going to have to shell out.

In the past this used to cause lots of problems. Last week I was talking to a consultant at a large accounting practice who was reminiscing about the first wave of hosted service providers – the guys who run applications for you on their own servers, and charge you a monthly fee to use them over the Internet. In the old days, they were called Application Service Providers, and their evolution mirrored that of the pre-2000 internet boom – i.e. meteoric rise followed by catastrophic crash, with only a small percentage of players making it though.

My consultant contact had been exploring the ASP market as part of an MBA course, and he argues that one of the flaws in the early model was that people were too used to changing their IT systems to suit the way they worked. If you oversaw any kind of IT project during the 90s you’ll know what he means. This was an era when large projects tended to drag on forever and costs kept on climbing – in part because organizations insisted on customizing the code in the applications they bought to better suit their existing working practices. That kind of mentality simply didn’t fit the ASP model.

Today, mindsets have changed. People who purchase software applications now tend to focus on getting them up and running asap so they can start getting some benefits – and that usually means they have to change some of their processes to suit the way the software works, not vice-versa. This isn’t utterly rigid, of course – good applications let you configure workflows and screens to your heart’s content. But what you don’t generally want to be doing is opening up the box and playing with all the complex code that sits under the covers.

This shift may seem like a compromise, but it isn’t necessarily a bad thing. Many business processes are common across organizations and industries, and it’s hard to see how anyone can get competitive edge in some of the more basic aspects of people management. Keep in mind too that most software vendors build their systems on the back of years of experience in their field, so chances are you’re conforming to practices that bear some resemblance to industry best practice.

All of this should, in theory, be good news for the ASP model, now better known as Software as a Service (SaaS). If there’s widespread acceptance that standard business processes are a good thing, it removes one more barrier preventing organizations going down the SaaS route for people management software and other applications. As my colleague Phil Wainewright would no doubt argue, the plus points just keep on stacking up.