Cost Optimization and Profitability with an FPM Solution
To compete in increasingly tight markets, you need to understand which products, services, customers, or channels generate value and which ones consume resources inefficiently. Designing a customized Profitability & Cost Automation model in FPM allows you to accurately calculate, model, and analyze your business’s profitability, eliminating spreadsheets, subjectivity, and rework.
The Problem: Cost and Profitability Analysis Without a Specialized Tool
The result: decisions based on averages, intuition, and data that arrives too late.
Companies that manage their profitability in Excel or disconnected systems face thelimitations and risks of the manual approach:
- Inconsistent or unreliable calculations, especially in the allocation of indirect costs.
- Lack of granularity, which prevents an understanding of profitability by product, segment, channel, or customer.
- Multiple, uncontrolled versions, making it difficult to conduct comparable analyses and internal audits.
- Slow processes, rife with reconciliations, validations, and the risk of manual errors.
- Difficulty in simulating changes (price increases, changes in product mix, volume scenarios).
- Lack of visibility into cost drivers and their actual impact on the margin.
- Cost of collecting and updating data scattered across multiple systems within the company
The Solution: Comprehensive Automation of Cost and Profitability Management
We propose a solution that centralizes data, costs, drivers, and allocation rules in a robust, auditable, and flexible model.
What does the Profitability & Cost solution cover?
- Comprehensive cost models: direct, indirect, variable, fixed, departmental, and multi-site.
- Driver-based automatic allocation (ABC/ABM): volume, time, complexity, resource usage, transactions.
- Profitability analysis by product, customer, channel, region, business line, or multidimensional combination.
- Simulations and scenarios for pricing, cost structure, changes in demand, or product mix.
- Dynamic dashboards: gross margin, net margin, cost-to-serve, incremental profitability, and period-over-period comparisons.
- Integration with ERP and operating systems, ensuring data consistency with accounting and operations.
- Traceability: Traceable management of cost allocation.
- 360l Profitability Analysis: Breaking Down Performance by Cost and Profit Centers.
Key Benefits for Your Business
- A realistic view of the cost-to-serve, revealing unprofitable products or customers.
- Greater data reliability, with transparent, traceable, and auditable rules and mappings.
- Optimizing the business mix by identifying where it makes sense to grow, adjust, or divest.
- Flexibility to simulate actions (pricing, reorganization, operational efficiency, catalog changes).
- Alignment between finance, sales, and operations using a common language based on reliable data.
The company is moving from “guessing at profitability” to actively managing it.
About Nova: Experts in FPM focused on business performance
In Nova We specialize in FPM as applied to profitability analysis and cost modeling. We have helped organizations modernize their processes and gain an accurate understanding of the actual economic performance of their products and customers.
Why choose Nova for cost optimization and profitability?
- In-depth expertise in multidimensional profitability models.
- A proven methodology for building robust financial models that are usable by the business.
- Expert consultants with functional (financial, management control) and technical expertise, working together to achieve a consistent result.
- Implementations designed for scalability, integrated with ERP, pricing, and CRM systems.
- Ongoing support, with a special focus on data quality and the business's adoption of the model.
- User/Customer Focus: We will propose the solution that best fits your specific situation. We are not tied to any specific partner—whether Oracle, OneStream, or Jedox—but rather focus on results.
Nova helps you turn your profitability models into a strategic decision-making tool.
Frequently Asked Questions About Profitability and Cost Automation Services
How detailed can the profitability model be?
The model can drill down to a very granular level: by individual product, SKU, customer, contract, channel, region, or multidimensional combination. Specific drivers can be configured by activity, enabling precise calculations of cost-to-serve and incremental profitability.
How is the data integrated, and how is its quality ensured?
The solution integrates with ERP, CRM, operating systems, and data warehouses. Validation rules, automatic controls, standardization of accounts and cost structures, and periodic reconciliations are applied to ensure accounting and operational consistency.
How does automation help with strategic decision-making?
It allows you to simulate changes in prices, volumes, product mix, cost structure, or operational efficiency. The dashboards reveal where value is created—or destroyed—helping you prioritize investments, adjust your portfolio, and improve margins.
How are drivers and assignment rules managed?
Drivers can be easily configured and versioned: hours, activities, weight, volume, number of transactions, process complexity, etc. In addition, the platform stores historical data to support allocations in the event of an audit or management changes.
Does the model require ongoing maintenance?
Yes, but it’s lightweight and structured. Changes to products, new customers, process variations, or cost structures are reflected through rules or configurations without the need for development. Nova usually helps define a data governance model.
Which team profile does the solution use?
Finance and controlling are the primary users, but sales, operations, and management teams also consult dashboards and scenarios. The goal is for the model to be cross-functional and useful for real-world decision-making, not just a financial exercise.