Tool to handle complex attribution and allocations for the purposes of analyzing profitability and costs against different models (e.g., creation of cost pools, performing allocations to business units or business lines based on drivers, etc.). Driving to the heart of revenue and cost levers becomes increasingly challenging for larger organizations. Due to the scale of their businesses, they commonly revert to creating various shared services (e.g., accounting, treasury, human resources, IT, etc.) or maintain numerous shared cost pools (e.g., facilities, transportation, corporate credit facility, etc.) for process efficiencies and streamlining transaction recording. In turn, it becomes an arduous and time consuming task to determine profitability of business units, goods (e.g., SKU level), or even services.
Profitability and cost analysis tools help aggregate data and apply pre-determined algorithms to allocate and attribute to various perspectives (e.g., by geography, function, service line, asset class, etc.). These tools can also perform sensitivity analysis in support of scenario planning (e.g., impact of f/x fluctuations, interest rates, labour costs, volume breaks, etc.).