How our customers benefit

Grow profitably

Customer-Product-Channel Profitability
Route-to-Market selections
Promotion of the best product-mixes
Segmentation, pricing and discounts
Profitability based growth strategies

Optimize operations

Process improvements
Capacity utilization
Resource management
Benchmarking
Best Practices

Decrease costs

Vendor and Customer negotiations
Policy changes
Trade terms
Minimum order sizes
Make or buy decisions

Right direction and profitable execution

With our solution, you can systematically prioritize development investments, set corrective actions, and identify winning practices. This allows you to better focus strategic priorities and resources for ensuring profitable growth.

“WITHOUT PROFITABILITY AND COST ANALYSIS MANAGEMENT IS IN THE DARK…TRANSPARENCY AND ACTION ON CUSTOMER AND CHANNEL PROFITABILITY PRESENTS A REAL OPPORTUNITY FOR STRENGTHENING FINANCIAL PERFORMANCE.”

A KPMG and ACCA Thought Leadership Report – An Eye on Value

Profitability Analysis

Profitability analysis is a much broader examination beyond revenue and gross margin to reveal hidden gains and losses. By considering the true cost of each customer, product, and sales channel, you will be able to make changes – operational and financial – that directly affect the last line of the income statement.

The goal is operational profitability view for customers, products and sales channels. Calculation is based on day-to-day event-level data aligned with real business processes. At this level, it becomes transparent how orders require company resources as the order passes through the supply chain. Only at this level is customer ordering behavior directly linked to products. Making operations and finance meet reveals opportunities for business development and strategic priorities.

Benefits summary

Area	Benefit
Customer and Product P&L’s	Income statements that provide transparency on actual customer and product profitability at the operating profit level See the impact of customer behavior, sales channel and product portfolio selection on costs they drive Compare actual profitability with estimated / targeted profitability Analyze the root cause and determine actions for necessary changes Identify cost effects of capital employed (eg inventory, trade receivables)
Pricing	Locate mispriced products, services and contracts and learn from the best; targets for corrective action Review discount policy, additional charges, minimum order sizes / small order surcharges, pricing, delivery cycles
All Cost and Profitability reporting in one model	Transparency, validation, accountability and maintainability Enables consistent and continuous calculation Enables the creation of co-dimensional performance metrics Consistent decision making, one common truth (no separate calculations in silos)
Processes	Creating and monitoring process KPIs / OKRs Linking financial realities to business processes Overcapacity and bottlenecks
Sales Management	Operating profit reports by sales rep to manage sales profitability Customer / market segmentation and operating policies Incentive plans aligned with shareholder value
What-if scenarios	What if modeling based on actual data for different business change scenarios Impact assessment as a basis for forward looking decision making