Product Profitability
The allocation of all directly attributable costs is generally the easier step, but often complex Excel spreadsheets have to be used. These then process large quantities of transactional data, so as to perform the calculations, which can introduce formula errors over time or lead to the workbook crashing.
The apportionment of indirect costs carries the same challenges but also necessitates an allocation method that may be too simplistic to accommodate the limitations of Excel. Using Analytical Process Automation, rules can be programmed with increased complexity enabling a closer relationship between how resources are consumed for each product, without fear of creating performance issues on the model.
In addition to the automation being significantly quicker and more accurate, the resulting dataset will be in a format that is optimised to perform subsequent analysis. This will aid further interrogation, especially when looking for trends over longer periods.
Distribution can also be segmented and automated, enabling product owners to focus solely on their areas of responsibility whilst maintaining control of the security of the broader company performance.
