CFO saw that management was lacking tools to make the right operative decisions to maximize profits. He also wanted to strengthen accountability for financial performance across units and functions. New profitability reporting solution was developed that fulfilled the objectives and became the backbone for decision making in the company.
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CFO saw that management was lacking tools to make the right operative decisions to maximize profits. Reporting was too aggregated and it didn’t provide granular enough visibility to the root causes of profitability. He also wanted to strengthen accountability for financial performance across units and functions. To address these challenges, CFO launched a project with twofold objectives: to strengthen performance management and to better support operative decision making.
The answer was a profitability reporting solution that provided insightful information for business division management and all levels below that. The solution was built on transaction level sales data, allowing profitability to be viewed through all key business dimensions (e.g. customers, products and brands). Other financial KPIs were also reported from the same database. The solution was a perfect match with the project’s twofold targets. It helped to cascade accountability to lower levels in the organization and enabled operative management to understand the financial impact of their decisions.
Already the first use cases revealed significant improvement potential in decision making. Businesses that were considered unprofitable before were, in fact, generating significant cash flow and could be used as a platform for growth. Production management, on the other hand, got a better grip on production costs. The solution became the backbone of the company’s management system and is a key information source in all business development initiatives.