Cost Allocation

When trying to generate meaningful and reliable profitability information, it is not enough to sift through huge data volumes. In addition, it is necessary to determine how customers and products drive costs.

This is by no means easy.  In a context of bundled services and large amounts of fixed costs, rules have to be found that accurately allocate revenues and costs to customers.

As this is tedious and involves highly specialized methodological knowledge, many providers have not tackled this task, and instead, add some average percentage to their direct cost in order to account for their infrastructure cost. Thus, they face the risk of basing decisions about their product strategy or customer relationship measures on unreliable profitability data.

Allolio&Konrad provides a method to allocate infrastructure cost according to actual use and helps implement and integrate the production controlling into the existing systems and processes. Our Network Costing Model allows consistent and dynamic allocation of platform costs providing transparency throughout the supply chain for all carrier services.

By comparing planned to actual production cost and by contrasting planned and actual asset utilization, our customers can pinpoint underutilized assets and inefficient production of products and services.