Cost Profibility Management, Toy houses on top of piled coins at varying heights


Cost and profitability management

Sustainably manage your performance

Profitability Management means knowing where you earn your money, and finding out how to improve your profitability, i.e., how to affect the bottom line. The trend is clear and not likely to stop. Increased requirements on Operations combined with the fee pressure on distribution and the sales side increase the pressure on your margin from both ends. To meet this challenge and to be able to sustainably manage your performance, it is an absolute must to understand the revenue and cost drivers in detail.

We have a proven track record of conducting an in-depth analysis and attribution of your cost components as well as your performance drivers. With this know-how we are able to advise on short and long term actions, for example which areas need to be substantially improved, which products should be rationalized and which investor types require a different fee model to be profitable. The combination of these can lead to superior long term margin results for your organisation. Institutionalizing the underlying analysis will provide you with the management insight required to lead your business successfully.

Profitability Management

Performing a front-to-back business review for a global asset manager

Deloitte was mandated to review this client’s global asset management businesses with the goal to increase transparency for senior management, analyze product profitability, and develop revenue enhancing and cost saving opportunities. Therefore, a functional map with detailed description of each function was developed through interviews with front-, middle-, and back office employees, a financial model to perform a product profitability analysis was developed (i.e., detailed rebuild of revenue side, direct cost attributed to product, defined allocation key to allocate indirect costs to product), and a quantification of cost saving opportunities through modelling of different scenarios conducted – resulting in management implementing cost saving recommendations with the business.

Case study # 1

System implementation for cost and profitability management

Implementing an adequate system to generate more insightful analysis of trading performance, clearer visibility of drivers and ultimately to better manage cost

Deloitte was brought in to deliver the global implementation of a system aiming to provide reliable and consistent business performance information across geographic locations, investments and distribution channels.

Deloitte defined an implementation plan for the Hyperion Profitability & Cost Management (HPCM) system and conducted reviews of the income team’s processes and potential system solutions as well as on the existing option paper which looks at how Hyperion Financial Management (HFM) can support the new Management Reporting requirements. Deloitte then defined the strategic architecture and roadmap options for achieving this.

This resulted in a developed near seamless integration between Oracle Financials, HPCM and HFM enabling greater flexibility to meet changing reporting requirements as well as an improved accountability through the delivery of a global reporting strategy, more insightful management accounts and a better understanding of indirect cost base.

This also allowed the production of reliable and consistent results which consolidate geographical and investment reporting (drawn from the same HFM repository used for statutory and regulatory reporting) and founded strategic solution on best practice and aligned with the future Oracle development roadmap.

Case study # 2

Process Outsourcing

Enhancing service offerings while reducing operational costs

Deloitte led a global as-is process and system analysis, the core work streams of global reporting and risk & performance from business requirements definition through to testing – resulting in mapped As-is front- and back-office processes including tools and techniques used, documented system architecture and definition of a target environment. Deloitte defined future reporting packages, led client and vendor meetings, identified issues, drove resolution and developed and delivered communication and training plan as well as hand-over documents for future roll-outs.

Case study # 3