The right tools and the right data result in better budget management

The right tools and the right data result in better budget management

Hans Hasselgren

Hans Hasselgren,

CFO need-to-know in a digital world:

At this time of year, many CFOs are putting the finishing touches to the budget for the next financial year. This often involves a lot of work. And it is even more difficult if they don't have the right tools, nor are able to provide the business with the right tools for planning, control and follow-up.

No, I am not primarily thinking of financial systems here. Instead, I am thinking about all the data that is not normally captured by financial systems, but which is becoming increasingly important for all businesses: Customer Experience (CE) data.

Some of this information does of course exist in systems of various kinds. A while ago we carried out a large study, where we looked at how consumers all over the world, including Denmark and Sweden, perceive their interaction and relationship with the stores they use. It is striking how much relevant data about the customers and their behaviour can actually be extracted from the data generated by the shops’ own systems. For instance:

  • The number of customers that visited the store per day
  • The time at which the number of customers in the store was highest
  • The most and least sold products, and when they were sold
  • For those who have a customer loyalty scheme – who bought what and when
  • Approximate information about how various promotional campaigns translated into pure sales
  • Margins on various products
  • Basket of goods analysis
  • Shelf planning
  • Purchasing and logistics

You can play around with all these variables in order to simulate different scenarios, which can be very useful for budget management. However, the question is whether the business has the tools required to do this.

Another question is whether there is any relevant data not found in either the financial or operational systems. As our consumer survey found, there is of course quite a lot of this type of data. Here are some interesting facts about how Danish consumers interact with the stores they use:

  • Three-fifths, (57%) of Danish consumers check the price of a product on their mobile phone when they are thinking about buying from a store. Only 49% of British consumers do the same.
  • 12% of Danish consumers are willing to consider paying a little more for a product because they like being seen visiting that particular store.
  • 63% of Danish consumers did not have a problem stating their gender on an online shopping site, for instance, in order to receive more tailored offers, but only 53% were willing to give their age. One in five Danes did not want to provide any information whatsoever.
  • The fact that Danish consumers use their mobile to search for information does not mean they are as interested in producing information themselves. 79% would never share an image from a store on social media and 78% would never provide a review or rating.
  • Danish consumers are not particularly worried about the safety of new payment systems. But 75% say it is very important that suppliers are clear about how they ensure that payments are secure and that customer information cannot be intercepted.
  • Many Danish consumers like buying online for collection in store. But did you know that more than half of those doing so also buy something else while they visit the store to collect their goods?

Interesting, do you agree? In view of the fact that Danish retail sales are expected to grow twice as fast as the European average over the next few years, stores and chains which implement a good customer experience via all channels online and offline can expect a really smooth ride. But this requires you to use many more quantities than just units of currency in your planning.

 


 

Hans Hasselgren, responsible for Cognizant’s Business Process Services in the Nordic region