Developing a Pricing Model, Profitability Analysis & Stakeholder Reporting
The Situation
A worldwide company offering communications, entertainment, and information solutions for off-the-grid customers (airlines, cruise ships, etc.) had recently made several business acquisitions. As a result, the Company lacked a streamlined pricing strategy across regions and business units. Due to disparate systems, teams, and data sources, reporting meaningful financial and operating metrics became a highly manual process. The Company also needed visibility into business unit and customer level profitability, as it had never developed nor implemented a cost allocation methodology.
Services
Big Data Analytics
Stakeholder Reporting & Strategic KPI Enhancement
Integrated Profitability Analytics
The Execution
- Worked closely with the Company’s CFO and accounting, finance, sales, and IT teams, as well as other relevant stakeholders across all functions.
- Built a synthesized pricing tool that integrated thousands of scenarios and dimensions across three business units and 12 product groups.
- Included a customer, business unit, product, and contract level EBITDA profitability analysis (along with contract level returns analysis – IRR, NPV, etc.) within the pricing model to ensure that pricing aligned with corporate strategic and profitability goals.
- Developed cost allocation methodology by utilizing a variety of accounting approaches including activity-based costing.
- Built a cost allocation model by navigating complex data challenges of recently acquired (and not yet fully integrated) business units.
- Cleansed, validated, and integrated disparate data from dozens of sources.
- Developed a detailed reporting and KPI package for stakeholders including the Board, C-level, business unit, and functional leadership.
- Worked with business unit leaders to understand data availability and reporting requirements.
- Developed and refined report templates and outputs for use within existing IT infrastructure (i.e., Tableau, OBIEE, etc.).
The Results
Accordion’s support and guidance through the preliminary transactions allowed for a seamless transition for the Company and the initial group of practices. After this, the Company retained our team to support the remaining transactions. The budget provided both the management team and partners within the practices with clear benchmarks at which to set annual compensation targets.