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One of the main ICT providers in the Middle East wanted to develop tools, mechanisms and processes to track the profitability of its different segments, services, tariffs and subscribers in order to inform its pricing strategy. This assessment should ensure that all company costs would be considered including not only direct but also shared costs such as network costs, engineering departments, marketing, commercial costs, G&A, etc.
Project Description
During the first stages of the project, Axon interacted with all the departments within the company in order to understand the different processes, activities and costs owned by each of its business units. Based on this information, we designed a methodology for the identification and allocation of all the accounts included in the financial system to business units, services and tariffs.
Thanks to our methodology, we implemented a profitability measuring tool relying on our proprietary software, and run a pilot to produce the first set of results. A set of processes was developed to collect all the required information from the company’s information systems and relevant internal experts. The results were included in a detailed report to be presented periodically to the Board, which included:
The pilot was accepted and then implemented. Thanks to the processes we defined and the implemented software, the client was able to produce the report for the Board periodically (quarterly or monthly) in order to monitor the profitability with sufficient granularity and include the entire cost structure (with the system matching the company’s financial accounts), thus allowing the Board to take informed strategic decisions.
The granularity of the system allows profitability assessment even at customer or cohort level, which can further maximise the profitability by taking individualised decisions and targeted commercial actions.
Key Takeaways
The project provided the client with a full set of systems, tools and processes to periodically measure the profitability of its business units, tariffs and customers with very detailed granularity. Such information allows both the Board and the business units to take properly informed pricing decisions and define the company’s commercial strategy.
Telephone: +34 913 102 894 |
Email: marketing@axonpartnersgroup.com |
Madrid HQ. Calle Sagasta 18 3rd. floor, 28004, Madrid.
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