Having insights in your profitability is one of the main goals of a company. Being able to track where costs are piling up, where the margins are the biggest and where you could change your business to increase revenue are very important. This is not always as straight forward as people hope it to be.
Modelling in Excel: hard to handle complexity and deteriorates accuracy
A big number of companies currently use software like MS Excel to analyze their profitability. The use seems very flexible, but analyzing profitability across the company can be very complex, driven by multiple factors and different per region or business unit. To capture this in Excel is a great task and often not very thorough, which makes the solution error prone. Changing parameters or adjusting the analysis for the current financial model is a huge task and often prevents companies from making the model to extensive. This has a negative effect on the accuracy of the analysis and it might feel like maintenance is the only thing you are working on.
User-friendly and Accuracy capturing the single truth
At Agium EPM, we have developed a profitability analysis model in OneStream XF which tries to tackle all the issues and the complexity financials face in their analysis. The main goal was to make the frontend as user friendly and flexible as possible. We did that in such a way that the financial users can easily adjust, update or add in order to achieve larger accuracy. The calculations are tucked away in the system, so that the regular user will never face calculations and thereby is not able to make any changes to the model itself. The complexity can be far greater than in any other tool, but for the user it will seem like the easiest way of creating a profitability analysis.
Control who views and manages the Profitability Analysis Dashboard
The frontend consists of a dashboard in which predefined parameters can be adjusted. Depending on the business requirements these can vary from one parameter to a completely driver-based model. However, this is all set up in a way that is easily manageable by people with access to the Profitability Analysis Dashboard in OneStream XF. The business can choose between access for headquarters only or for access at the lowest level of the business unit. This gives the ability to shift responsibility from the head office to local business units and to give them more tools to accurately analyze their profitability.
Integrate Profitability Analysis with financial reporting
The solution can be a standalone model or be integrated with the financial reporting. In that way, the analysis can be done on the latest actuals and for example be used to generate best/worst case scenario comparisons. The allocation can be triggered by a push of the button or be calculated along with the regular consolidation of the company. Either way, you always have the latest outcomes and most actual results. With this speed in analysis the outcome is very relevant for decision makers. The model can be extended with audit trails, specific security settings and additional reports.
Stop spending time on maintenance and spend more time on analysis
To be completely fair, the goal is to have the users changing the dashboard as little as possible, which means that the model is completely setup and integrated into the OneStream application and the company’s financial model. However, changing some parameters via a dropdown is easy and the analysis can be run again. This gives the user more time to analyze the actual data, there is only one version of the truth and all (historic) analysis are stored in OneStream. Analyzing profitability has never been so easy!
Bart Willemstein has over 8 years of experience working in finance. Since 5 years he has been working on OneStream implementations in a variety of industries and implemented consolidation and planning. At Agium EPM he works as EPM Consultant and developed the OneStream way of Profitability and Cost, a solution that harvests all the benefits of the OneStream XF platform.