Profitability & Strategic Cost Management

Organizations realize the majority of their profits come from a fraction of their products, services and customers.  These same organizations are breaking even, or losing money, on a large portion of their recognized revenue.

Do you understand your true profitability by product? Customer? Channel?

Profitability & Strategic Cost Management emphasizes the outcomes and drivers of business processes, not the dollar input. This provides the foundation for fully understanding your cost structure, resulting in greater transparency and traceability of revenue, cost and ultimately profitability.

Bottom line: Through leveraging a holistic approach to Profitability and Strategic Cost Management, organizations will develop a complete picture for intelligent sustainable cost management and reduction, ultimately leading to increased profitability.

We work with organizations every step of the way from accessing their current state, defining the future state methodology and enabling technologies and a roadmap to get them there then execute the implementation and ensuring post go-live readiness.

Profitability Analytics:

Do you know where your organization makes money? How do you decide where to allocate your resources? Do you struggle to create Profit/Loss statements by product or customer? Profitability Analytics enables you to identify and then focus on profitable, value-creating customers, products and other business segments by aligning Revenue and Expenses at a detailed level. Identifying areas of opportunity to enhance your organization by improving the performance of sagging business segments is just as powerful. Profitability Analytics provide the complete net profitability of each business segment, enabling business to align resources with strategy.

Shared Services Chargeback:

Do you lack transparency and traceability into Shared Service cost? Do business units complain that they do not know why they received a charge from IT or other Shared Services? The traditional charter for Shared Services has been focused on centralizing non-core activities across an organization to achieve economies of scale. The emerging charter builds upon this initial approach to drive a high quality, customer-focused internal service market but also to partner with ‘the business’ to create an internal services market with full transparency into allocated charges. This new business-based approach for Shared Services leverages comprehensive costing methods to report activities and cost to internal business customers and provide transparent menu pricing. The Impetus Consulting Group works with organizations to define their Shared Service Chargeback methodology, design and implement the enabling solution and then transform it into business as usual.

Pricing Rationalization:

How do you determine the prices for your goods and services? Do you know your target margin by product or service? Can you differentiate between lost leaders and cash cows? Whether operating in a regulated or unregulated industry, pricing based on real cost plus margin is essential to optimizing business performance. Our team has guided clients across industries to optimize performance through the process of mapping fully loaded costs by product, channel, category, etc. to pricing strategies to optimize performance.