Strengthening the focus on profitability
In a marketplace that is more challenging than ever, companies need clarity on where they create and destroy profit. Existing methodologies such as Activity Based Costing (ABC) have failed to deliver that clarity, and have often created “cottage industries” churning out complicated, but not particularly meaningful, analyses.
Integrated Profitability Management (IPM) builds on driver-based modeling techniques like ABC but adopts a more pragmatic approach to answering specific business questions about profitability. Put simply, IPM is about making sure resources are targeted at profit-making activities. Among other things, that means focusing on revenue streams and taking account of today’s multi-channel operating model.