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General principles and potential organizational gains of Customer

Relationship Management System implementation for Municipal

Government structures in Armenia

Principios generales y posibles beneficios organizacionales de la

implementación del Sistema de Gestión de Relación con los Clientes para las

estructuras de Gobierno Municipal en Armenia

Arman Avetyan

, Goharik Martirosyan

and Svetlana Baghdasaryan

Russian-Armenian University, Yerevan, Armenia

*Corresponding author: goh.martiros@gmail.com

https://doi.org/10.26754/ojs_ais/accionesinvestigsoc.20254610444

Received 2024-04-10. Accepted 2024-09-13

Abstract

This study explores the implementation and impact of a Customer Relationship Management (CRM)

system within the municipal administration of Yerevan, focusing on the Citizen Complaint and Request

Service. Employing a mixed-methods approach, the research includes a needs assessment, pilot

implementation, and evaluation through qualitative and quantitative data collection. Key findings

reveal significant improvements in service delivery times, personalized interactions, and operational

efficiency post-implementation. Challenges identified include technical adjustments and initial

employee resistance, addressed through continuous support and training. The study fills a significant

gap in understanding CRM applicability in the public sector and offers a practical framework for

achieving tangible improvements in municipal governance, supporting the broader goal of digital

transformation in Armenia. The successful implementation of CRM systems in municipal services can

serve as a model for other state governance structures, promoting a customer-oriented administrative

culture.

Keywords: Competence; transformation; client-oriented model; foreign experience; administrative

structures.

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Resumen

Este estudio explora la implementación y el impacto de un sistema de gestión de relaciones con los

clientes dentro de la administración municipal de Ereván, centrándose en el Servicio de quejas y

solicitudes de los ciudadanos. Empleando un enfoque de métodos mixtos, la investigación incluye una

evaluación de necesidades, implementación piloto y evaluación a través de la recopilación de datos

cualitativos y cuantitativos. Los hallazgos clave revelan mejoras significativas en los tiempos de

entrega del servicio, interacciones personalizadas y eficiencia operativa después de la

implementación. Los desafíos identificados incluyen ajustes técnicos y resistencia inicial de los

empleados, abordados mediante apoyo y capacitación continuos. El estudio llena un vacío importante

en la comprensión de la aplicabilidad de CRM en el sector público armenio y ofrece un marco práctico

para lograr mejoras tangibles en la gobernanza municipal, apoyando el objetivo más amplio de la

transformación digital en Armenia. La implementación exitosa de sistemas CRM en los servicios

municipales puede servir como modelo para otras estructuras de gobernanza estatal, promoviendo

una cultura administrativa orientada al cliente.

Palabras clave: Competencia; transformación; modelo orientado al cliente; experiencia en el

extranjero; estructuras administrativas.

INTRODUCTION

The transformation of state and municipal governance systems in the Republic of Armenia is

increasingly relevant in the digital era, where government structures must be open and customer-

oriented. The Customer Relationship Management (CRM) system, designed to enhance these

qualities, is widely used by businesses due to the direct correlation between customer relationships

and profit levels. However, the public sector has been slower to adopt this approach, often adhering

to rigid, regulation-based service provision that lacks efficiency and flexibility. Citizens are not yet

perceived as customers in the public sector, and the administrative processes are lengthy and

inflexible (Rud & Shubala, 2023; Gahramanova, 2023). This underscores the need to investigate the

transformation of state and municipal administration systems in Armenia, particularly focusing on

adapting CRM systems to improve employee-citizen communication. Recognizing citizens as clients

who can evaluate the quality of services is crucial. This feedback should influence administrative

structures, leading to improved communication and optimized processes. Implementing CRM systems

in public administration can elevate service standards, enhance information accessibility, and reduce

service delivery times. The customer-oriented model can increase administrative efficiency, foster

citizen loyalty, and contribute to the overall development of territories through better interaction and

synergy (Komilova et al., 2023; Nesterov, 2023).

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The Ministry of Economy of the Republic of Armenia (2020) focuses on digitizing document flow in the

tourism sector, but overlooks the interaction between municipal employees and citizens. Ktoyan et

al. (2022) discuss digital transformation strategies involving e-services and CRM systems, but lack

detail on processes and required professional qualities. Global trends show a shift towards client-

centered municipal administration.

Despite extensive research on CRM system implementation in various contexts, there remains a

significant gap in understanding how these systems can be effectively applied within municipal

structures, particularly in the Republic of Armenia. Prior studies have highlighted the potential

benefits and challenges of CRM systems, yet specific insights into the unique requirements,

competencies, and strategic approaches necessary for successful implementation in municipal

government are lacking. This research seeks to address this gap by providing a comprehensive

overview of the applicability of CRM systems in the public sector, drawing on the experiences of other

countries.

The purpose of this article is to provide a general overview of the applicability of CRM systems in the

public sector, with a focus on their importance for municipal structures in the Republic of Armenia,

illustrated by the experiences of other countries. Additionally, this research aims to offer a guideline

for practitioners and policymakers in Armenia, contributing to the effective implementation and

adaptation of CRM systems in municipal governance. The study included a survey and interviews to

assess the needs and challenges of the Department of Citizen Services, adding valuable insights to the

paper.

LITERATURE REVIEW

According to Khachaturyan (2012), the process of CRM system implementation can initially impact

organizational efficiency, requiring significant financial resources and potentially weakening tactical

management due to delayed effects. However, the specific challenges faced by municipal structures

in this context remain undisclosed. Mirzoyan and Tovmasyan (2022) highlight that CRM systems

manage relationships and use accumulated information effectively, personalizing interactions and

building trust. Yet, the necessary employee competencies and methods for using customer

information are not fully explored. The International Monetary Fund (2020) indicates CRM's role in

tax administration, identifying risks and reducing bureaucracy, though taxpayer loyalty and client-

oriented approaches in Armenia are underexplored.

Chiguvi et al. (2019) find that CRM system success in local governments depends on implementation

strategies that enhance citizen loyalty and trust. Moradi (2018) suggests developing long-term

strategies for call centers with CRM systems to improve information access. Studies in Zimbabwe by

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Chiguvi et al. (2019) reveal municipal employees' initial lack of awareness about CRM's significance,

which improved after training. They also categorize municipal customers, including residents,

investors, companies, and visitors. Maditinos and Sidiropoulou (2020) identify barriers to e-service

implementation, such as staff shortages and technological modernization needs. Larger municipalities

tend to adopt customer-centered approaches more quickly, as shown by Perea et al. (2021). Mayedwa

and Van Belle (2021) emphasize the need for system interoperability between municipal units to

integrate data seamlessly. Blasi (2022) underscores the importance of diverse communication

approaches to engage citizens in e-government initiatives, aiming to improve municipal welfare and

quality of life.

In the state and municipal sectors of the Republic of Armenia, there is also a tendency of inequality in

the use of online government services. There is a percentage of the population that cannot use this

range of services. It should be noted that the small percentage of the population who use e-services

are residents of Yerevan (the capital city) which indicates the uneven development of the e-services

system in the territory of the Republic of Armenia. As in all countries of the world, so in the Republic

of Armenia, citizens form an impression about the general state of affairs in the country from the

attitude of the employees of the institution, the time they spent on this process, the quality of the

provided state and municipal services. Therefore, the most important task in the Republic of Armenia

should be the introduction of CRM-system not only in state, but also in municipal bodies to provide

quality service to citizens. But in order to implement this system, it is necessary to develop a model of

CRM-system based on the peculiarities of municipalities (size of the territory, population, remoteness

from the centre) (Bartczak, 2022; Ktoyan et al., 2022).

In 2010, new retraining programmes for municipal employees were developed by order of the

Ministry of Territorial Administration of the Republic of Armenia and under the sponsorship of the UN

program. The inclusion of cognitive and general epistemological spheres in the retraining programs

contributed to the development of professional knowledge, working and managerial skills of

municipal servants. This made it possible to strengthen the link between retraining and the functions

stipulated in the passport of the municipal servant’s position. In recent years, retraining of public

servants has included courses on conflict management. In practice, three main types of conflictogenic

factors are encountered: striving for perfection, manifestations of aggressiveness, and egoistic

manifestations. This understanding of the professional competence of municipal servants implies both

the necessary knowledge and abilities, and psychological features and qualities (Ministry of Economy

of the Republic of Armenia, 2020).

The share of approved and actually occupied positions of the staff and municipal service of the

communities of the Republic of Armenia in the relative size of the population in 2020. In Vayots Dzor

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and Aragatsotn marzes of the Republic of Armenia were 0.29% and 0.27% respectively (absolute

leaders), surpassing Yerevan (0.15%) (Ktoyan et al., 2022). The above-mentioned indicator speaks

about the workload of community employees, which necessarily affects the quality of services

provided. In addition, in many communities’ own budget revenues are not sufficient for staff

maintenance costs (Salary, service fees). In general, approximately 91% of municipal service positions

are filled, indicating an incomplete staffing situation. One of the reasons for this is the lack of a

qualified cadre of municipal employees in the field. Additionally, among those who are employed,

there is often a low level of professional qualities (Ktoyan et al., 2022).

In the case of community heads (who are not public servants), for example, most of them have higher

education (2020), in particular, out of 502 community heads, 354 had higher education, 96 –

secondary vocational, 50 – secondary and 2-basic education. In 2020, according to the data, 620

community employees were retrained, of which 454 were from Yerevan Municipality and

administrative districts (73%). This results in a situation where the same large communities with

relatively stable economies are included in several large-scale programmes, while underdeveloped,

small communities in need simply do not get the opportunity to become participants in the

programmes due to lack of information, competence of community servants, insufficient level of

professional abilities of the local authorities’ and other reasons. In this context, it is also necessary to

take seriously the issues of professional training, retraining and advanced training of municipal

servants (International Monetary Fund, 2020).

Changes in the organization of personnel policy will make it possible to improve the efficiency of the

development and implementation of targeted programmes for the development and improvement of

the public service, which will serve to strengthen the system of local self-government, the formation

of new relations between the state, local authorities and civil society, the improvement of the political

and socio-economic situation in the state (Ketners, 2015; Ketners, 2020). It is obvious that the solution

of the above problems requires system solutions and direct involvement of the state through the

implementation of targeted programmes. They are mainly built on the logic of theoretical knowledge

transfer, where practical work, discussions, and case studies are not given sufficient attention.

As it has already been mentioned, the programmes and activities on the establishment of the

institution of community service in the Republic of Armenia and the development of the capacity of

employees were mainly implemented without detailed research of the sphere. As a result, the

programmes very often did not serve their purpose, while the proposed research work is aimed at

developing a methodology for assessing the competencies of a civil servant, which will make it possible

to form a list of necessary competencies, which will later become the basis for the state to develop

new programmes and activities for their development.

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An interesting experience can be seen in the UAE, since 2010, the government of the UAE decided to

implement a CRM system to improve relations with the public and treat them as customers. By

adopting this approach, all employees were trained in communication building techniques and

reorientation of activities. This enabled more effective utilization of the CRM system. The author of

the study Al Dhabbah (2017) writes that the main problem in the way of effective use of CRM in

government is the use of only the technical component to process management and not the

behavioural approach to relationship management. The relationship of state and municipal

institutions as business structures should be constant in its manifestations, and the customer-centric

model should take the first position. It is an open relationship of mutual exchange in which

government provides services in exchange for revenue. It is the creation of a two-way, mutually

beneficial relationship. An example of such a relationship is the UAE government post office, which

operates as a private postal service, competing favourably with the niche businesses of DHL and FedEx.

So, it is possible to cite the example of the UAE Federal Water and Electricity Authority, which also

successfully adapted the CRM system and built customer-oriented relationships with consumers,

which had a positive impact on transactions for services received.

It is also necessary to take into account the experience of implementing CRM systems in municipalities

in Portugal. A study was conducted in Portugal, the main objective of which was to evaluate several

aspects of CRM implementation in public organizations. And the study was also concerned with

identifying the motivations that led to the implementation of CRM systems in municipalities and

identifying the criteria that are used to select CRM solutions, what results have been achieved with

the implementation of this system, what difficulties have been encountered and other aspects. In

order to investigate the effectiveness of the CRM system, questionnaires were designed and sent to

all municipalities in Portugal, both continental and island. The main questions of this questionnaire

were related to the reality of the implementation of the CRM system in Portugal. The period of the

survey was March-April 2009. As a result, it was determined that only 9% of municipalities use such

systems. Predominantly used CRM systems from vendors: Microsoft, Oracle.

It should also be noted that one of the main criteria evaluated in the questionnaire was the level of

satisfaction with the system. Of the 9% of respondents who stated that they use a CRM system in their

work, seven of them rated their satisfaction level highly. This may indicate that CRM systems are

making a significant difference in the performance of municipalities. The details of the results are

summarized in Table 1.

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Table 1

Results of a study of aspects of the CRM system in municipalities of Portugal

Criterion

Survey result

Aspects that were the most important

when choosing a CRM system, when

deciding to implement the system

 ease of use;

 cost of software/hardware/services;

 quality of support;

 flexibility and possibility of future upgrades;

 set of available functions.

Results from the implementation of a CRM

system

 standardization of processes in the municipality;

 increasing global levels of citizen satisfaction;

 improving services to citizens;

 improvement of internal processes;

 improving the quality of information;

 increasing labour productivity;

 improving decision-making processes;

 eliminating unnecessary actions;

 reduction in response time to requests.

Difficulties faced by municipalities during

the reorientation to CRM system

 unrealistic implementation rates;

 lack of understanding of citizens;

 difficulty of integration with other systems;

 the need to speed up organizational changes.

Factors that significantly influence the

success functioning of CRM based on the

results of the study

 effective communication with users;

 support of the municipal board;

 comprehensive knowledge about the information system;

 adequate budgeting and budget presentation;

 aligning IT with overall strategy;

 comprehensive knowledge of the reality of the municipality;

 adequate user training;

 using good project management principles;

 review municipal processes.

Source. compiled by the authors based on Duque et al. (2010).

As a result, the implementation of CRM systems in Portuguese municipalities has modernized and

optimized municipal services, improved their service to citizens and increased their level of interaction

between different public administrations. Municipalities in Portugal that have adopted CRM systems

have demonstrated the development of closer ties with their citizens and a higher quality of

information. Municipal internal processes and productivity have also improved. Based on the practice

of foreign countries, the establishment of e-government is an important step in implementing the

CRM concept in the system of state and municipal administration. Providing reliable and timely

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information is the main task of a customer-oriented government. And only by applying CRM-system

approaches, public administration can get closer to citizens, improve the quality of work of state and

municipal bodies and receive an assessment of their work from citizens.

METHOD

Design

This study employs a mixed-methods approach to explore the implementation and impact of a CRM

system within the municipal administration of Yerevan, Armenia. The research design includes a

comprehensive needs assessment, a pilot implementation phase, and subsequent evaluation through

qualitative and quantitative data collection (Appendix A).

Participants

Participants in the study included key stakeholders from the Yerevan Department of Citizen Services,

such as department heads, Information Technology (IT) specialists, and frontline employees.

Additionally, a sample of 100 citizens who regularly interact with the department participated in

surveys to provide feedback on existing services and the new CRM system. The selection of

participants was based on their roles and frequency of interaction with municipal services to ensure

diverse and relevant insights. The data were collected during May-June 2023.

Procedure

The study began with a needs assessment to identify the specific requirements and challenges faced

by the Department of Citizen Services. This phase involved conducting in-depth interviews with

department heads, IT specialists, and frontline employees to gather qualitative data on their

perspectives regarding current communication processes and the potential benefits of a CRM system.

Concurrently, a survey was administered to 100 citizens to collect quantitative data on their

experiences and expectations.

Based on the findings from the needs assessment, a customized CRM system was developed and

implemented as a pilot project over six months. This phase included:

 Customizing the CRM software to align with the department’s specific needs.

 Conducting training sessions for employees to familiarize them with the new system.

 Integrating the CRM system with existing municipal databases to ensure seamless data flow.

 Monitoring and evaluating the system’s performance regularly to identify and address any

issues promptly.

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Data analysis

Data analysis involved both qualitative and quantitative methods. Interview transcripts and open-

ended survey responses were analyzed using thematic analysis to identify common themes and

insights regarding the CRM system's implementation and impact. Quantitative survey data were

analyzed using descriptive statistics to measure changes in citizen satisfaction and service delivery

efficiency.

Thematic analysis helped uncover key issues and benefits related to the CRM system from the

perspectives of municipal employees and citizens. Descriptive statistics provided a numerical overview

of the system’s impact on service delivery times, citizen satisfaction levels, and overall efficiency

improvements.

This structured approach allowed for a comprehensive understanding of the CRM system's

implementation and its effects on municipal service delivery, providing valuable insights and

recommendations for future applications in similar contexts.

RESULTS

Case study results

The case study revealed several key findings regarding the implementation and impact of the CRM

system within the municipal administration of Yerevan.

First, the initial needs assessment highlighted significant gaps in the current communication

processes, including delays in service delivery, lack of personalized interactions, and limited feedback

mechanisms for citizens. Stakeholders expressed optimism about the potential of a CRM system to

streamline these processes and improve overall efficiency.

During the pilot implementation phase, the CRM system demonstrated its capability to enhance the

department's operational efficiency. Employees reported that the system's ability to centralize citizen

information and track service requests in real-time significantly reduced response times. The

automated workflow management features helped eliminate redundant tasks, allowing employees to

focus more on complex issues that required personalized attention.

Citizen feedback collected through follow-up surveys indicated a noticeable improvement in their

interactions with the department. Over 70% of respondents reported that the new system made it

easier to access information and resolve their queries promptly. They also appreciated the

personalized communication facilitated by the CRM system, which made them feel more valued and

heard.

However, the implementation process was not without challenges. The integration of the CRM system

with existing municipal databases required significant technical adjustments and coordination

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between different departments. Additionally, some employees initially resisted the change, citing

concerns about the complexity of the new system and the additional training required. Addressing

these challenges involved continuous support and training sessions, as well as clear communication

about the long-term benefits of the CRM system.

In terms of strategic outcomes, the case study underscored the importance of a phased approach to

CRM implementation. Starting with a pilot project allowed the department to identify and mitigate

potential issues before a full-scale rollout. It also highlighted the need for strong leadership and cross-

departmental collaboration to ensure the system's success.

Implementation guidelines for a CRM system in municipal services

To offer a practical and concrete example, this guideline focuses on implementing a CRM system for

the "Citizen Complaint and Request Service" within the municipal administration of Yerevan, Armenia.

This service was chosen due to its direct impact on citizen satisfaction and the potential for significant

efficiency improvements through CRM technology.

The first step in implementing a CRM system is to conduct a thorough needs assessment. This involves

gathering input from all relevant stakeholders, including municipal employees who handle citizen

complaints and requests, IT specialists, and a representative sample of citizens who use the service.

Interviews and surveys should be used to identify current challenges, such as delays in response times,

lack of personalized service, and inefficiencies in tracking and resolving complaints.

Based on the needs assessment, the next step is to design a customized CRM solution tailored to the

specific requirements of the Citizen Complaint and Request Service. This involves selecting CRM

software that can centralize citizen data, track the status of complaints and requests in real-time, and

automate workflow management to reduce redundant tasks. The CRM system should also facilitate

personalized communication with citizens, ensuring that each interaction is logged and can be

followed up efficiently. Training is a crucial component of CRM implementation. Employees who will

use the system need comprehensive training to become proficient in its features and functionalities.

Training sessions should cover how to input data, track the progress of complaints, generate reports,

and use the system to communicate with citizens. Ongoing support and refresher courses are also

necessary to address any issues that arise and to keep employees updated on new features.

Integration with existing municipal databases is another essential aspect of CRM implementation. The

CRM system should be capable of interfacing with other databases to pull in relevant information,

such as citizen contact details and historical data on previous complaints. This integration ensures that

all relevant information is available in one place, streamlining the process of handling complaints and

requests.

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Monitoring and evaluation are critical to the success of the CRM system. Throughout the pilot phase,

the system's performance should be regularly assessed to identify any issues and to ensure that it is

meeting the needs of both employees and citizens. Feedback should be collected from users to

understand their experiences and to make necessary adjustments. Key performance indicators, such

as response times, resolution rates, and citizen satisfaction levels, should be tracked to measure the

impact of the CRM system.

A phased approach to implementation is recommended. Starting with a pilot project allows the

municipal administration to test the system on a smaller scale, identify and resolve issues, and make

necessary adjustments before a full-scale rollout. This approach minimizes risks and ensures that the

system is fully functional and effective when it is implemented across the entire service. Strong

leadership and cross-departmental collaboration are vital for successful CRM implementation.

Leaders should communicate the long-term benefits of the CRM system to all stakeholders and foster

a culture of cooperation and openness to change. Collaboration between different departments

ensures that the system is integrated seamlessly into existing workflows and that all relevant data is

accessible.

By following these guidelines, practitioners and policymakers in Armenia can effectively implement a

CRM system for the Citizen Complaint and Request Service. This will lead to improved service delivery,

enhanced citizen satisfaction, and a more efficient and responsive municipal administration. The

successful implementation of this system can serve as a model for other services, contributing to the

broader goal of digital transformation and customer-oriented governance in Armenia.

DISCUSSION

The above results are confirmed by many studies of foreign scientists, who in turn also studied the

issue of CRM system implementation in the activities of municipalities. The study of de Carvalho

(2022), who considers CRM as Citizen Relationship Management (CitRM), also concludes that every

innovation that the government plans in the framework of transformation of municipalities should be

accessible and open to citizens, as well as effective. This can be realized through increased efficiency

of services provided by municipalities, optimization of their internal processes, increased involvement

and trust of citizens. And as a result of improving the standard of living of the society. It will also

contribute to the development of information space, technological and innovative transformations.

Berestetska et al. (2023) argue that the modern practice of using CRM as business structures and

government sector has the goal of creating quality communication implementation of innovative and

technological approaches in project management. The essence of a CRM system is the use of

automated technologies and built-in modules to ensure continuous business processes (Etemi &

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Uzunboylu, 2020; Pürhani et al., 2022). Also, nowadays, CRM helps to create a model aimed not only

at quality techniques of process execution, but also at the creation of customer-oriented

management. The use of this system provides many benefits: minimizes the risks associated with the

human factor, increases the efficiency of the department.

The study by Letchumannan et al. (2022) showed that an effectively working CRM system positively

affects the work of the structure that implemented it. There is a direct correlation between the

activities in the implementation of CRM system and there is a consistent performance of the public

sector. And the study of Tembo (2019) proves that it is necessary to use CRM in public administration,

particularly in municipalities, with the allocation of resources to manage the relationship between

public/municipal organizations and citizens. At the same time, treating citizens as customers. While it

is commonly understood that CRM refers to marketing concepts that emphasize the customer, it is

also applicable in governments that want to provide quality services to their citizens as well as reduce

costs in service delivery processes. This in itself increases the pressure on government departments

when they are struggling to achieve their goals. They need to ensure that they build relationships

between the public sector and citizens that will influence a positive response to the required needs

and trajectory of service delivery, community satisfaction and state/municipal institutions.

Thus, it can be said that a CRM system will complement the structures of municipalities in terms of

their efficiency and reorientation of processes from command-and-control to customer-centred.

Municipalities should take an active position in creating a system of communication with citizens.

There should be formed a strategy for the implementation of the CRM system with clearly defined

goals, means of achievement, dates of implementation. At the same time, it is necessary to remember

about the personnel component, as employees need to reorient their approach to their own activities,

rethink the value of communication in the client-oriented sense, and also need to develop a different

set of competences and skills. Which is in line with the results obtained in the study by Chiguvi et al.

(2019).

Attention should also be paid to citizen databases, namely their management, support, protection,

privacy. This data is valuable in terms of adapting the municipalities’ activities to the needs of citizens,

as well as for the possibility of personalization. Therefore, for a successful reorientation of

government, it is important to create processes that on the one hand meet the needs of citizens and

on the other hand provide a competitive advantage to the municipality in terms of service delivery

and promote positive communication. To determine the necessary skillset of municipal employees,

the financial costs of these transformations and the time frame, it is necessary to select the key

processes in the system of municipal operations and make a plan for their transformation. Mai and

Reicher (2021) also noted that CRM can help municipalities not only to change qualitatively, but to

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keep up with the pace of modern technology development.

In a study, Moradi (2018) determined that citizens’ opinion about the government and the situation

in the country is formed when they interact in the process of administrative services. This is also

comparable to this study. The Republic of Armenia is at the beginning of transformation of local

municipalities in terms of CRM-system implementation. It follows that an important task for the

Republic of Armenia is the implementation of a CRM-system to improve communication with citizens.

For qualitative transformation, it is necessary to create a model of CRM implementation system, which

will be integrated at the state and municipal level. The territorial and demographic peculiarities of the

municipalities will be considered. The Government of the Republic of Armenia, in cooperation with

the UN, has developed programmes for the training of civil servants, considering the reorientation of

their activities to the use of CRM-system. It is necessary to further implement these programmes in

the education system, which is engaged in training and retraining of personnel, in order to contribute

to the emergence of the necessary number of qualified personnel with the necessary set of skills. This,

in turn, will make it possible to effectively match the updated job description of the employee working

with the CRM system with staff training. In this training, a special place should be given to the

communication skills that municipal employees should have, such as conflict management courses.

It should also be mentioned that at this stage there is no reorientation of the team building of

municipal employees based on the proportion of citizens in the municipality. In some municipalities,

there is a heavy workload of employees due to the large number of requests for services (Komilova et

al., 2021; Moskvina, 2022). This has a negative impact on the ability to provide services. Necessary

research should be conducted, and staffing should be optimized based on the demographics of the

region. If it will lead to additional costs for the maintenance of increased staff, the strategy of CRM-

system implementation in the Republic of Armenia should include additional financing of local

municipalities from the state budget. This means that it is necessary to talk about joint work of state

and municipal employees. De Carvalho (2022) came to the same statements about joint work. Also,

during the research, it was revealed that in the Republic of Armenia, there is also a low level of

development of municipalities, which represent communities with a smaller number of citizens. In

these cases, there is a lower level of professional qualities and their economic situation is much worse

than communities with a larger number of citizens. Chiguvi et al. (2019) highlight similar trends

regarding municipalities in Zimbabwe. And this puts obstacles in the way of developing such

communities and reorienting them in the context of CRM system implementation. Therefore, it is

necessary to identify such communities and prescribe a methodology for the development of human

resource capacity of their municipality followed by a strategy of professional training and retraining.

The changes described above will increase the effectiveness of the implementation of transformation

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of municipalities, their reorientation to a client-oriented model of interaction with citizens. Obviously,

to solve all the above-described difficulties will require complex solutions based on the interaction of

central and local authorities. However, these changes are necessary and timely. The previously

developed programmes and activities on implementation of CRM-system in the Republic of Armenia

were developed and partially implemented without a detailed study of municipalities, which led to

low efficiency of these activities. For the development of municipalities, a more thorough study of

past domestic experience and successful experience of other countries is needed. Because without

understanding the current state of CRM-system implementation, it will be difficult to build a long-

term strategy. The proposed methodology of this paper is aimed at assessing the competences of the

municipal employee, assessing the current situation in order to build an effective way of development

and transformation of each individual municipality in the Republic of Armenia.

CONCLUSIONS

The transformation of state and municipal governance systems in the Republic of Armenia through

the implementation of Customer Relationship Management (CRM) systems is a critical step towards

achieving greater efficiency, transparency, and citizen satisfaction. This research has demonstrated

the potential benefits and challenges associated with CRM system adoption in the public sector,

particularly within the municipal administration of Yerevan.

The case study of the Citizen Complaint and Request Service in Yerevan highlighted significant

improvements in service delivery times, personalized interactions, and overall operational efficiency

following the implementation of a CRM system. The findings underscore the importance of a thorough

needs assessment, customized CRM solutions, comprehensive training programs, seamless

integration with existing databases, and continuous monitoring and evaluation. These elements are

crucial for addressing the specific requirements and overcoming the challenges inherent in the

municipal sector.

Additionally, the comparison of CRM implementation experiences in foreign municipalities, such as

those in the UAE and Portugal, provided valuable insights into best practices and potential pitfalls. The

successful application of CRM systems in these countries has demonstrated the importance of

adopting a customer-centric approach, effective communication, and strong leadership to drive

positive outcomes. For Armenia, the introduction of CRM systems in municipal governance offers a

pathway to modernize and optimize public services, fostering a more responsive and citizen-oriented

administration. By following the detailed implementation guidelines provided in this study,

practitioners and policymakers can ensure that CRM systems are effectively integrated into their

operations, leading to enhanced service quality, increased citizen trust, and overall development of

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municipal territories.

The successful implementation of CRM systems can serve as a model for other municipal services and

potentially extend to broader state governance structures, contributing to the overarching goal of

digital transformation in Armenia. This research not only fills a significant gap in understanding the

applicability of CRM systems in the public sector but also provides a practical framework for achieving

tangible improvements in municipal governance.

AVAILABILITY OF DATA AND MATERIALS

The data that support the findings of this study are available on request from the corresponding

author.

DECLARATION OF GENERATIVE AI AND AI-ASSISTED TECHNOLOGIES IN THE WRITING PROCESS

The authors declare that no AI or AI-assisted technology was used in the writing process of the article.

CONFLICT OF INTEREST

The authors have no conflicts of interest to disclose.

FUNDING

This work was supported by the State Committee of Science of Republic of Armenia (Research Project

No. 22YR-5B032).

AUTHORS' CONTRIBUTIONS

AA is conceived the ideas of the study; GM conceived the ideas for the analysis; AA, GM, and SB

performed the analyses; GM and SB wrote the manuscript. All authors read and approved the final

manuscript.

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Appendix A

Data Tables

Table A1

Follow-up survey results on CRM implementation

Survey question

% of positive

responses

% of neutral

responses

% of negative

responses

Easier access to information

72%

18%

10%

Prompt resolution of queries

75%

15%

10%

Improvement in personalized

communication

78%

12%

10%

Overall satisfaction with the new CRM

system

80%

15%

Willingness to continue using the CRM

system

85%

10%

Source. compiled by the authors

Table A2

Historical performance indicators (before and after CRM implementation)

Performance indicator

Before CRM implementation

After CRM implementation

Average service delivery time (days)

Number of personalized interactions per month

120

Citizen satisfaction rate (%)

60%

80%

Number of unresolved service requests

Average response time to citizen queries (hours)

Source. compiled by the authors

Table A3

Operational efficiency metrics

Metric

Before CRM implementation

After CRM implementation

Number of redundant tasks per week

Employee productivity rate (%)

65%

85%

Number of technical issues reported per month

Training hours required per employee

Integration issues reported

Source. compiled by the authors