Monday, December 7, 2009

Best-in-Class Statistics

The Aberdeen Group has published the results of a survey of approximately 150 enterprises during November and December, 2008. The survey examined how the enterprises implemented or evaluated performance optimization initiates. The survey respondents had the following characteristics:
1. Job function - 22% managers, 14% C-level Executive, 11% Directors and 53% others.
2. Industry - 13% IT consultants, 12% finance/banking/accounting, 9% software/hardware supplier, 7% health/medical and 59% others.
3. Geography - 61% North America, 16% Europe, 13% Asia/Pacific and 10% from the rest of the world.
4. Company size - 23% from large enterprises (annual revenue above US $1 billion), 39% from midsized enterprises (between $50 million and $1 billion) and 38% from small enterprises.

While there is a large percentage of the respondents who fall into the "other" category, the survey results appear reasonable.

The results for customer satisfaction showed that best-in-class increased 9% year over year compared with industry average of 3% and the laggards losing 2%.

The results for customer retention showed that best-in-class increased 15% year over year compared with the industry average of 5% and the laggards increasing 3%.

The results for employee turnover showed that best-in-class decreased by 2% compared with the industry average of 0% decrease and the laggards increased by 7%.

The primary areas of performance improvement were in the areas of understanding the link between back-office operations and customer service and the alignment of back-office operations and corporate operational goals.

The bottom line suggests that enterprises that are focusing on the value of back-office operations are achieving significant performance increase when compared to the industry averages. The improvement of customer satisfaction and customer loyalty certainly implies improved financial performance as has been shown in other studies. The reduction in turnover should lead to a direct saving in hiring and training expenses.

The idea of using the back-office to improve performance is something that appears to have significant improvement opportunities and should continue as IT is used effectively. Keeping IT in the back-office and the employees in front of the customers seems to be a winning strategy. We have seen over and over that the customers need to talk with people and that is one of the best ways to build a relationship. Computers generally do not build long-term relationships with customers.

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