Key successes
- Model for determining profitability per customer and product at EBIT level
- Customer segmentation into ABC based on profitability and revenue potential
- Identification of unprofitable customers with adjustment of pricing levels
- Introduction of a new time tracking tool
- Termination of unprofitable partnerships
Background
“Our analysis of profitability up until now was not sufficiently granular, which led us to only roughly consider some underlying factors, and as a result, we invested partial time and energy into unprofitable small clients. For example, when considering additional costs incurred due to increased support requests, underestimated change requests, or operational activities, some customers actually became unprofitable due to the high level of support required. This perspective has helped our company steer the reins in the right direction in a timely manner. ”
– Peter Schindecker, Managing Director of Formware
Support from FLEX Capital
In collaborative partnership with FLEX, the OMS Group has implemented the following measures:
- Development of a concept for determining all cost components in addition to COGS (Cost of Goods Sold)
- Conducting an ABC and XYZ analysis at the customer and product level
- Implementation and review of profitability development
