Less than half of businesses know who their most profitable customers are, according to new research by KPMG and the ACCA.
The global report, which took in the views of 1,100 accountants from more than 90 countries around the world, found that companies still focus their financial measurement on product or service lines, rather than customers. Just 45% of those surveyed monitor who their most profitable customers are and what they like to buy.
“In some businesses there remains at best, a stubborn focus on product and service profitability. This myopia is dominating financial reporting, while the customer and their buying habits remain mysteriously absent from management reports,” says John O’Mahony, Head of KPMG’s Enterprise Performance Management team.
“Without knowing who is buying what, via whom and from where, businesses lack the insight needed to inform future investments associated with their fulfilment and operating model. It also means they can’t price goods effectively, because they don’t know the real cost of selling them by specific channel.”
The study also revealed that finance functions are still reluctant to invest in, and use, new technology. Almost a third (31%) of those surveyed said they still manually type data into spreadsheets, and 45% of those surveyed said their organisation hadn’t invested in finance software.
Jamie Lyon, Head of Corporate Sector at ACCA, said:
“In the so called Age of the Customer, these findings are a compelling insight into missed opportunity. For all the talk of digital yet again we see the reality of not squeezing that critical corporate asset – information – to drive return. The CFO function of the future has a key role to play in helping the enterprise better understand its most profitable channels and where to invest to drive return. Yet finance can’t do this on its own – it’s an enterprise wide responsibility that is hugely dependant on better data governance, and better collaboration and operational alignment right across the business.”
Notes to editors:
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