The Challenge of Cost Allocation Standardization Across Legacy Systems & Unique Products
To stay ahead of the competition, global organizations must have a clear and strong understanding of their financial performance. For one major global corporation, the challenge lay in achieving visibility and standardization when they assessed and measured cost, margin, and profit metrics across their vast product portfolio, that spanned regions, and was tracked in several legacy systems. PlaidCloud helps them overcome this daunting task.
The Challenge: A Puzzle of Varied Systems & Unique Products
The corporation faced a complex problem that hindered its ability to gain a unified view of its financial performance.
- Diverse Legacy Systems: Different regions operated with distinct legacy systems and employed varying allocation models to assess cost, margin, and profit. This created inconsistencies and disparities in their financial data.
- Customized & Unique Products: The products manufactured by the corporation were highly customized and unique. Consequently, their allocation models had to be capable of tracking down the individual serial number within an SKU (stock-keeping unit).
- Classification Challenges: Product classifications varied across regions, making it impossible to harmonize data for a simplified Profit and Loss (P&L) view.
The Solution: Tackling This Intricate Challenge Head-On
Renowned for its expertise in complex cost allocation, financial model automation, and ease of integration with legacy technologies – PlaidCloud tackled this organization’s global corporate finance challenge head-on.
- Data Standardization: Leveraging PlaidCloud’s ability to ingest data from any system, in any format, they were able to standardize and automate data inputs from their diverse legacy systems. This laid the foundation for a robust and standardized allocation model.
- Harmonized Reporting: The standardized model enabled each region to meet its specialized reporting requirements. It also provided the corporate headquarters with a comprehensive view of the fully loaded cost, margin, and profit for each customized product globally – all in one standardized format.
- Seamless Translation: Unlike many solutions that would have required updates to legacy systems, PlaidCloud performed all the necessary translations internally. This ensured a seamless transition for the client, with no disruption to their existing systems.
The Result: Effortless Efficiency & Real-Time Insights
The benefits of this transformation are significant and transformative.
- Efficiency Gains: What used to take weeks of manual effort, compiling reports and financial data from various systems, each with its unique descriptions, was transformed into a monthly process taking only minutes to run. This newfound efficiency freed up valuable resources within the corporation. They are now able to perform additional higher-value examinations of the results, rather than wasting time and effort on upfront analysis.
- Empowering Finance Teams: The finance team members are now able to easily report to C-Level Executives on a regular basis. They can provide detailed insights into profitability, both at the highest level and at the most granular SKU transaction level, all in real time.
With PlaidCloud’s expertise, this global organization achieved not only standardization but also a significant reduction in manual effort. This streamlined their operations and empowered their finance teams to make data-driven decisions with ease. In the ever-evolving landscape of global finance, such transformations are essential for maintaining competitiveness and driving success. This result clearly highlights the power of technology-driven solutions for simplifying complex financial challenges.
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