Cost and Profitability Management Solutions

Integrated approach to strategic cost management

Which products and services are making money? Which customer relationships are truly profitable? Which levers can you pull to increase profitability? When you're forced to make decisions around cost and profitability without data, those decisions can have unintended consequences that affect business results.

In a highly competitive, global economy, a cost management strategy is vital to drive business performance. Figuring out what you need to know and how to get there requires true cost transparency and analytics, and the insight to make the connection to better profitability strategies.

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First step in profitability management: Start with cost data

​Executives live under constant pressure to break down big data into understandable insights. How can you get the full picture of costs, and where are the sweet spots to drive profitability?

It can be a challenge, especially when data must be dynamically curated from a variety of cost sources that may be allocated across the organization and that may not reflect how resources are actually consumed. How can you be sure resources are being managed and deployed with a clear link to strategy?

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Ask the right questions for better cost transparency

To gain better insights from their cost and profitability strategies, companies should define what questions they want to answer to determine key business decisions. These questions should reflect the company's strategic priorities and a sense of the pain points that cost and profitability data can help alleviate.

Here are the questions business leaders say are their top priorities:

• What's driving profit performance and what areas in the business need attention?
• What are the levers to reduce overhead and shared services costs?
• What's the total cost to serve by customer, channel, or region?
• How many variations of a product do we make? What's the cost and profit of each product variation and customer group?
• What costs are we putting into the product or service and not recovering on price?

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Insights to inform profitability strategies

​Our data-driven approaches empower you to take quick action. We bring together information from disparate systems to create a single source of the truth for analysis, driving organizational alignment on actions to improve business performance. In addition, Deloitte's Cost Management and Profitability solutions may provide you with the ability to create meaningful insights on product-, service-, and customer-level profitability to inform your strategic direction.

This process doesn't have to be all or nothing. Pilot projects may help generate valuable and actionable information that garners support for a broader profitability management initiative. We have also seen companies tie their strategic cost management initiatives to other organization-wide efforts to raise the visibility of the initiative and convince stakeholders of the benefits.

Capitalizing on digital opportunities to innovate, companies that adopt analytics, automation and cognitive technology may be able to realize greater cost reductions and higher margins. You'll gain confidence and more effective oversight, powering sustainability for your business now and helping to drive long-term effectiveness.

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