Widespread Disconnects in Aerospace and Defense Customer Service

NEW YORK; June 2011 – Although improvements in customer service rank among the highest priorities for aerospace and defense executives, a series of industry disconnects are preventing these improvements from materializing, according to a new Accenture (NYSE: ACN) survey. These disconnects include a lack of current and planned collaboration such as alliances and business partnerships with other companies to operate customer service; limited integration of customer service with sales service operations; and a significant gap between the awareness of the importance of customer service and the actions taken to deliver that service.

The survey, which polled industry executives in 12 countries, found that more than half (56 percent) said that developing a customer service mindset among employees will be the number one challenge to achieving their company’s customer service goals in the next three years. However, three-out-of-four companies (75 percent) do not currently use collaboration such as alliances, partnerships or other third party providers to operate their customer service, and 72 percent do not expect to increase them in the next two-to-three years. Consistent with this, only slightly more than a third (38 percent) of the executives indicated they had integrated the company’s sales service operations. To retain control, nearly three-fourths (73 percent) keep customer service “in-house.”

Although 75 percent of the respondents rate the importance of providing competitive service in the next three years as critical, only 53 percent said their companies have a clearly defined customer service strategy in place. And 85 percent acknowledge they are required to achieve at least some progress in their customer-specific improvement plans.

Rather than seeing customer service as providing new revenue oppor­tunities, respondents cite more defensive reasons for focusing on customer service. In descending order, they ranked staying competitive (59 percent), differentiation from competitors (53 percent), and customer retention (41 percent) as the top three reasons. Only about one-fifth cited other reasons for investing in customer service, including expanding into new geographies (22 percent), driving incremental margin (22 percent) and acquiring new customers (19 percent).

“There appear to be major flaws in the way some aerospace and defense customer services are designed and implemented with limited integration consid­erations for other key functions such as sales, supply chain, and engineering,” said Damien Lasou, global managing director of Accenture’s Aerospace and Defense Group. “A wide gap exists between actions and intentions. On a conceptual level, the criticality of customer services to drive high performance is well understood, yet the steps to drive theory into practice are less well defined. The shift to better customer services in this industry on multiple levels is a massive trend, and companies need to invest more in this arena to become high performers.”

Research Methodology

Accenture’s telephone survey was conducted from February to March of 2011. Corporate executives from Brazil, Canada, China, France, Germany, India, Italy, Singapore, Spain, Sweden, the United Kingdom and the United States participated. The executives work for firms in the airplane, equipment, helicopter, business jet and maintenance, repair and overhaul (MRO) market segments. The firms have annual revenues of at least $1 billion and several above $10 billion. Their roles included vice presidents of customer service or support; leaders of sales and marketing. All respondents were closely involved in corporate decisions related to customer service strategy.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 215,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page iswww.accenture.com.