A clear picture of costs leads to more intelligent pricing
Managing profitability effectively is especially important in today’s constrained pricing environment. Shifts in market structures, including globalization and better informed customers, have made it difficult to raise prices. So companies must have a clear picture of their costs and cost drivers to be able to improve efficiency, eliminate unnecessary costs and manage their pricing more intelligently. However, our benchmark research on the Office of Finance finds that relatively few companies actively manage profitability through the use of analytics. Just 32 percent of participants said they apply analytics to manage product profitability, and only 29 percent said that about customer profitability.