Ovum survey says customer processing costs not visible
5th December 2005 A survey undertaken by Ovum, the researcher, has revealed that more than eighty percent of organisations in the financial services, telecommunications, utilities, retail and public sectors do not know how much they spend on processing customer applications.
Although many UK companies acknowledge the need to reduce customer acquisition costs, and simplify the processing of customer applications and queries, many are not aware of their outlay. Despite the fact that the majority (76%) of those polled said that improving cash-flow was key to the success of their companies, only 18% could estimate how much they actually spent on handling customer applications. A staggering 82% could not.
Ovum Principal Analyst Josie Sephton, who oversaw the survey, "Document Management in Large Organisations in the UK " says that although companies recognise the benefits of managing customer applications and queries, few companies actually have a system in place to do so. "Over half of the 120 UK companies interviewed for the study said that they wanted to improve processing times for customer applications, typically by reducing them by up to three days, and that this would have a positive impact on revenues by improving cash-flow," says Sephton. "Notably though, 70% of those who wanted to see improvements said that they did not know how much impact such a reduction would have on their bottom line."
When asked to name the major challenges facing organisations today most, perhaps unsurprisingly, highlighted customer service, profitability and productivity as the key areas. More than a quarter (26%) said that customer service was crucial, a fifth (20%) profitability, and 12% productivity. The vast majority (82%) of those polled believed that they could gain competitive advantage through faster response times to customer applications. However, this obvious desire for leaner, more efficient organisations is at odds with companies' lack of awareness regarding the cost of processing applications and the time involved.
John Hopwood, director and general manager, XGS (Xerox Global Services) UK says: "Our customers operate in competitive sectors, where the ability to react immediately with accurate information is just as important as keeping costs under control.
"If you consider just one of our sectors, the financial services market, which once comprised a few big players, but now sees banks and building societies competing with supermarkets and specialist financial services companies," adds Hopwood. "Customers have got greater choice than ever before, so it has never been more important to a company's survival to reduce processing times, track, share, and retrieve incoming requests to feedback to their customers promptly and increase satisfaction. These market pressures mean that a clear applications processing strategy is essential, and this is compounded further by the introduction of compliance legislation such as Sarbanes-Oxley."
