Improving profitability involves more than a headlong pursuit to increase revenues and slash costs. It's the ability to identify your most valuable customers and products, while testing the impact that changes in pricing and process improvements have on costs and profitability. This will give you the insight to act decisively with a clear understanding of what the outcome will be.

With the SAP solutions, you can accurately and effectively measure product, customer, and channel profitability and develop and dynamically test out ways to improve them. Underpinned by flexible activity-based costing (ABC) methodologies, you'll get better insight into the cost of business activities in both operational and shared services areas, enabling you to quickly identify ways to optimize costs and profitability.

The profitability and cost management function within SAP solutions for enterprise performance management helps you:

• Gain visibility into metrics that evaluate the business processes that deliver the highest value to your organization
• Measure every driver impacting the cost and profitability of customers, products, channels, and any other aspect of your company's business
• Identify and understand the drivers of business costs, remove activities within processes that don't add value, and reduce costs without compromising service
• Accurately determine costs and invoice cross-charging of shared services such as IT, HR, and finance
• Understand the costs for serving customers and segments, factoring in all costs to gain a true picture of profitability
• Collect data and report to employees and stakeholders through an easily deployed Web interface
• Define and apply multidimensional analyses across customers, products, channels, suppliers, and any additional areas defined by you

Discover how offerings from SAP and Business Objects, an SAP company, helps you achieve these activities:

• Customer profitability – Know what you have to do to drive profitability and get results.
• Process costing – Identify your business process costs, improve your understanding of company-wide expenses, and reveal problem areas so you can eliminate bottlenecks and wasteful activities.
• Cost-to-serve – Determine the cost-to-serve on a transaction-by-transaction basis, providing you with the insight required to control costs and optimize profitability.
• IT services costing – Establish better alignment and efficient cross-charging of your IT shared services costs.