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Activity Based Costing Software Increases Customer Profitability

Acorn Systems Profit Analyzer™ Software enables Companies to Significantly Increase Customer Profitability through Operating More Efficiently

HOUSTON –July 28, 2004 – Financial Services Companies, Healthcare Companies, Retailers and Distributors all reported significantly increased profitability as a result of using Acorn Systems Profit Analyzer™ to understand how to
operate more efficiently, making customers on the margin more profitable.

In a survey of Acorn Systems customers, companies in multiple vertical industries reported the most effective way to increase customer profitability was not through a knee jerk reaction of “firing unprofitable customers” but through using customer and segment profitability data to identify opportunities to operate more efficiently and make all customers more profitable.

“In the vast majority of cases, it is not the customer that is costing the company profits, it is the company’s business processes that cause some customers to be unprofitable,” said Leland Putterman, CEO of Acorn Systems.
“By identifying the business processes and pricing policies that cause these customers to be unprofitable for the company to serve and revising them to make these customers more profitable, a company can dramatically increase profits and position itself to attract and grow profitable customers.”

“Through our Activity Based Costing initiative with Acorn Systems, we were able to identify several different actions we could take and policies we could set that would increase our profitability and more fairly distribute our cost of doing business with customers based upon our cost to serve them,” said Kurt Anderson, VP of IT at J&B Wholesale Distributors. “Rather than penalizing our customers who are the most costly to do business with, or ‘firing’ them, which would decrease our revenues, we encourage our customers to work with us in the most profitable manner.
We reward our most profitable customers with incentives that are available to any customer who does business with us in a manner that is more profitable for both of us.”

Acorn Systems Activity Based Costing Software, Profit Analyzer™ enables companies to measure the individual customer and transaction profitability of its business. This capability enables Acorn Systems customers to determine the root cause of why a customer, product or even a transaction is unprofitable to service and use this information to develop business policies and pricing that will increase the companies net profit dollars.

About Acorn Systems, Inc.
Acorn Systems is the leader in profit management and optimization solutions. Acorn Systems helps clients to measure, analyze, predict, and then optimize Net Operating Profits at any level of granularity desired including products, vendors, customers, even individual transactions, in order to maximize shareholder value. Acorn's clients come from many industries including Financial Services, Retail, Consumer Packaged Goods, Government, Telecommunications, Manufacturing, and Distribution in the Metals, Foods, Electronics, Paper, Healthcare and Chemicals industries. For more information, visit www.acornsys.com, or call 1-800-98ACORN.
    • With the help of Acorns profitability systems, we discovered that a select segment of accounts were the source of most of our profits, despite having lower gross margins. Acorn helped us shift our strategy and shift the way we served clients, resulting in a doubling of profits in less
    • than one year.
    • Ben Samuels, President
      Victory Packaging
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