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Acorn Capability and Value
This insight will enable you to answer key questions such as:
• Benchmarking where you are the most effective in providing a product/service and why?
• What does the “best practice” for each process-activity look like, and how does that compare to other locations where we provide the product/service?
• When is it more cost effective to insource and when is it more cost effective to outsource?
• How much used and unused capacity do you have and what is that unused capacity costing you?
• How much capacity will you need to execute your strategy and what will the resulting cost/profitability be?
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Acorn Capability |
Value to You |
| Accuracy. With Acorn, your model is validated by finance and operations. You can use trace-back reporting to validate accuracy. |
Get maximum usage and “buy-in” from executives, finance and operations. Business users can quickly understand how costs are allocated. |
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| Realize Profit Improvement. Acorn’s cost modeling and optimization features can capture and identify cost reduction/profit improvement opportunities. |
Alert executives about key cost and profit opportunities for potential improvement initiatives.
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| Flexibility. Leverage the range of methodologies Acorn’s application supports to create the detail and accuracy you need for full cost transparency. |
Assign different methodologies to separate cost pools depending on the level of substantiation, granularity, and accuracy needed.
You can use time-driven ABC to add additional power, by providing capacity and costs analysis for head-count driven activity.
Use your cost and capacity insight to perform benchmarking by process, product and location.
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| Low Total Cost of Ownership. Acorn’s solution automates the cost allocation process. Acorn’s solution runs on industry standard hardware/software, eliminating costly proprietary systems costs. |
Fewer models to maintain and link together using 3rd party applications mean a lower TCO for you. |
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| Enterprise-Wide Costing Solution. Un-paralleled scalability to perform cost allocations - inside Acorn’s application – and in a short time period. |
Enterprise-wide insight gives you granular, accurate information and the ability to do root-cause analysis. Your insight is ready when you need it. |
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| Unified Model. All your costs are in one place. A unified model links products and services you provide to the other critical dimensions of your business (customer, business unit, etc.). |
Use one version of the truth to analyze unlimited dimensions.
Eliminate multiple models, support time, administration, and maintenance needed to develop multiple dimensions.
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| Timely Reports. Develop ad hoc or standard reports immediately using business-user defined portals. |
Quickly answer key executive questions by filtering results and immediately publishing reports to the web (using security) without I.T. intervention. |
Criteria for Selecting Your Cost Allocation Solution
Accuracy – Does the costing methodology used for cost allocation actually reflect the real assignment of costs and revenues? An inaccurate assignment of dollars to processes and cost objects can lead to misleading results.
Flexibility – Can the solution handle multiple costing methodologies?
• Simple allocations of dollars using financial and operational drivers
• Stepped, phased cost allocations using the “tops-down” methodology
• Traditional activity-based costing
• Bottoms-up, demand-driven model
• Highly accurate time-driven activity-based costing
Scalability – Does the solution support the ability to model unlimited dimensions? Can it assign revenues and costs to the lowest level you need to make good decisions? Can it assign dollars to millions of transactions on a monthly basis? Can it support trace back and cost transparency from the lowest level back to processes, resources and general ledger accounts? Imagine double clicking on a product or service sold on a single customer invoice and analyzing the processes, resources and general ledger accounts consumed!
Effort – What is the level of effort required to maintain the solution? How many FTEs does it require? How much hardware infrastructure is required? Is the solution automated and data driven? Your solution should be sustainable.
Whether your focus is profitability analysis, IT chargeback, shared services or activity-based costing, accurate cost allocation serves as a solid foundation.
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