Profitability analysis
We use our experience and undertake insightful analysis that continues to drive value in the business long into the future.
We prioritise the areas that drive value and typically use a different lens that gives real insight and aligns the operational and financial view e.g by Site, Cohort, Customer, Contract, Vintage and Product category.
By looking at the data through the most relevant dimension, we give management the information to make operational changes that matter. We don’t just stop there. We use state of the art tools to cleanse and reconcile data from different data sets to give one version of the truth. Crucially, we then embed the change so it is part of managements reporting suite going forward, giving management real value long after we have left the business.
Recurring revenue analysis
We drive value through identifying annual recurring revenue (ARR) that demonstrates the quality of earnings of the business. We will identify licence (SaaS style) revenue, Contracted revenue but also Re-occurring revenue where there is no contract but where there are strong client relationships that give a high probability of future revenues.
Pipeline reporting
We establish the data definitions and process to embed pipeline reporting. This lead indicator provides valuable information about future performance in the near term. Extrapolating conversion rates for different cohorts can also identify different opportunities as well as quantify the value of the pipeline and so articulate the true value of the business.
Revenue leakage analysis
We track data through the Order to Cash process and segment each component so we are able to identify revenue leakage, setting out remediation plans and working with management to action them.
Product pricing and cost allocation
We also understand how best costs can be allocated to products and services whether at a GM1, GM2 Contribution or EBITDA level to give an appropriate and meaningful profit margin for each product or service.
Customer lifetime value
We use the data in the business to identify a customer lifetime value for an appropriate cohort or vintage of customers and so articulate the value of the business.
Cost of acquisition by channel
Taking the lifetime value, we can then develop a cost of acquisition for each channel to market and so give management real insight into the return on investment for each cohort and each channel, identifying the most profitable areas of each focus.
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