In today’s highly competitive and volatile global marketplace, business leaders need rich and relevant information on the true profitability of the products and services they offer to customers.
Yet for many, the apparently simple task of measuring profitability of offerings is buried in a morass of confusing and often arbitrary cost allocations. The solution is to adopt a structured, methodical approach to calculating profitability.
Most companies today struggle with identifying which of their offerings and which of their customers are the most profitable. They can measure revenue but not the profit associated with the product or client group — which means they make decisions about what to sell, in which markets, to which customers, and at what price based on partial or inaccurate information. They operate without a single version of the truth.