Customer profitability and value analysis system

• US 20070118419A1
• Filed: 12/02/2005
• Published: 05/24/2007
• Est. Priority Date: 11/21/2005
• Status: Active Grant

• Current Assignee: Accenture Global Services Limited (Accenture PLC)
• Original Assignee: Accenture Global Services Limited (Accenture PLC)
• Inventors: Canale, Paolo, Maga, Matteo, Bohe, Astrid
• Granted Patent: US 8,428,997 B2
• Time in Patent Office: Days
• US Class Current: 705/10
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• CPC Class Codes: G06Q 10/06393 Score-carding, benchmarking or key performance indicator [KPI] analysis
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0201 Market modelling; Market analysis; Collecting market data

Abstract

Systems and methods are provided for analyzing a business'"'"'s profitability. A system for analyzing customer profitability includes an interface for receiving customer, revenue and cost data from external business operating systems. Customer, revenue, and cost data are stored on a database. A data transformation module operates on the customer data, allocating revenue and costs to individual customers. A customer profitability engine calculates the profitability of customers based on the allocated revenue and cost data. A report module generates reports illustrating the profitability results and other key performance indicators. Optionally, an average customer lifetime value may be calculated based on the customer profitability results. A method for analyzing customer profitability includes identifying sources of revenue, identifying sources of costs, and establishing rules for allocating revenue and costs to individual customers. The method further includes receiving actual customer, revenue and cost data and allocating revenue and costs to individual customers according to the allocation rules. Customer profitability and KPI values are calculated for individual customers and reports are generated illustrating the profitability results and various KPIs for individual customers or groups of customers sharing a common characteristic.

Claims

1. A computer based system for analyzing profitability comprising:

a database (158);

an interface (152) for receiving customer data, revenue data and cost data from one or more business operating systems for storage in the database;

a data transformation module (154) associated with the database adapted to operate on the customer data, cost data and revenue data received from the one or more business operating systems, the data transformation module including instructions for allocating specific costs and revenue to individual customers according allocation rules, and storing the transformed data in the database;

a customer profitability module (160) adapted to operate on the transformed customer data, cost data and revenue data to calculate a customer profitability value for individual customers, based on the costs and revenue allocated to the individual customers;

a report module (164) for generating a report illustrating an key performance indicator relating to customer profitability.

2. The computer based system of claim 1 wherein the interface is adapted to receive customer data from a Customer Relationship management system.

3. The computer based system of claim 1 wherein the interface is adapted to receive revenue data from a customer invoice/billing system.

4. The computer based system of claim 1 wherein the transformation module employs activity based costing to allocate costs to individual customers.

5. The computer based system of claim 1 further comprising a graphical user interface (162) for interacting with the database (158).

6. The computer based system of claim 5 wherein the graphical user interface is adapted to allow a user to create and modify key performance indicators for evaluating customer profitability, the key performance indicators generating values by which customer profitability may be measured and evaluated against other factors.

7. The computer based system of claim 1 further comprising a customer lifetime value module for calculating an expected lifetime value of a customer over an expected relationship lifetime (174).

8. A method to be implemented in a business systems environment in which a customer profitability data mart is interfaced with business operating systems including a customer billing system, a customer relationship management system, and accounting systems and in which a graphical user interface (162) is provided for accessing data in the data mart, and a report module (164) is provided for generating reports based on data stored in the data mart (158) analyzing a business'"'"'s profitability on a per customer basis, the method comprising

receiving (104) customer, revenue and cost data from the business operating systems interfaced with the data mart and storing the received data in the data mart;

allocating (110) revenue and cost data to individual customers according to allocation rules;

calculating (112) customer profitability for individual customers from the revenue and cost data allocated to said individual customers;

producing (118) a report analyzing customer profitability from a per customer basis.

9. The method of claim 8 wherein said allocation rules comprise activity based costing rules wherein a number of cost incurring activities are defined and specific costs are associated with each activity, and wherein the cost associated with an activity is allocated to a specific customer when the activity is performed by a customer or in response to a customer.

10. The method of claim 8 wherein revenue data are received from the customer billing system, and wherein an amount billed to a customer is allocated as revenue to the customer.

11. The method of claim 8 further comprising calculating a key performance indicator derived from the customer, revenue and cost data received from the business operating systems interfaced with the data mart, and including a key performance indicator in the report analyzing profitability on a per customer basis.

12. The method of claim 11 wherein the key performance indicator comprises one of:

average profitability;

costs from each identified cost source;

total costs;

average cost per user;

revenue from each identified revenue source;

total revenue;

average revenue per customer.

13. The method of claim 12 further comprises calculating additional key performance indicators configured by a user via the graphical user interface.

14. The method of claim 11 wherein generating a report analyzing profitability on a per customer basis comprises pairing two or more key performance indicators to demonstrate a correlation or lack thereof between the selected key performance indicators.

15. The method of claim 14 wherein generating a report analyzing profitability on a per customer basis further comprises incorporating customer data in the report for distinguishing between various segments of the customer population such that the key performance indicators may be displayed for a plurality of different customer segments.

16. The method of claim 8 further comprising calculating the net present value of future profitability of a customer, future profitability being calculated based on present profitability multiplied by an expected duration of a relationship with the customers.

17. The method of claim 16 further comprising altering a parameter of the customer lifetime value calculation in order to determine how a change in the expected relationship with customer or group of customers will alter the customer lifetime profitability.

18. A method (100) of analyzing customer profitability comprising:

identifying sources of revenue (102);

identifying (102) sources of costs;

establishing (104) rules for allocating revenue and costs to individual customers;

receiving (112) customer, revenue and cost data;

allocating (110) revenue and costs to individual customers according to said rules;

calculating (114) a customer profitability values for individual customers;

calculating (106) a key performance indicator value derived from at least one of the cost data, the revenue data, and the customer profitability values; and

generating (118) a report displaying one of a customer profitability value and a key performance indicator value.

19. The method of claim 18 wherein the key performance indicator is selected from the group comprising:

the cost associated with an identified cost source;

total costs;

average cost per customer;

the revenue associated with an identified revenue source;

total revenue;

average revenue per customer;

total profitability; and

average profitability.

20. The method of claim 18 further comprising defining customer segments based on customer attributes and grouping customers sharing a common attribute in a common customer segment.

21. The method of claim 20 wherein the customer segments comprise profitability tiers, each tier defining a profitability range, customers having a customer profitability value that falls within the profitability range of a given tier being grouped in the given tier.

22. The method of claim 20 wherein the customer segments are defined by service use patterns, customers having similar use patterns being grouped in a common customer segment.

23. The method of claim 22 wherein customer segments are defined by various product types purchased by customers.

24. The method of claim 22 wherein customer segments are defined by various service types subscribed to by customers.

25. The method of claim 22 wherein the customer segments are defined by various customer types

26. The method of claim 22 wherein generating one or more reports comprises displaying a first key performance indicator value for each of a plurality of customer segments.

27. The method of claim 26 further comprising displaying a second key performance indicator value for each of a plurality of customer segments.

28. The method of claim 20 further comprising:

defining a group of customers based on a common attribute;

calculating (116) an average customer lifetime value for members of the group based on the profitability of customers in the group and an average expected duration of a relationship with a customer in the group.

29. The method of claim 28 wherein the customer lifetime value for an individual customer is the net present valued of the future profitability of the customer over an expected duration of a relationship with the customer.