GAUSS BLOG

Charla con Gary Cokins en Bogotá, organizada por EY y GaussSoft

 

Las tendencias globales presentan nuevos retos a la competitividad que la alta gerencia debe abordar apalancada en metodologías y el uso adecuado de herramientas tecnológicas. Hay toneladas de datos pero poca información accionable.

 

Teniendo en cuenta esta perspectiva, EY y GaussSoft organizamos el pasado mes de Octubre la conferencia “Analytics-Based Enterprise Performance Management”, en la cual Gary Cokins, uno de los líderes mundiales en Enterprise Corporate Performance Management y Business Analytics, habló a un grupo de empresarios y gerentes colombianos, sobre como aproximar estas tendencias para apoyar a la alta gerencia en la toma informada de decisiones.  

Read more: Charla con Gary Cokins en Bogotá, organizada por EY y GaussSoft

Estimated Cost: the price of lost profit

When you do not have any easy way to track cost you are left with a proxy method, usually a unit cost spreadsheet analysis. This approach is straightforward such as simply calculate the cost per hour per resource. For instance, for each business process, list all the needed resource units, add the cost of the standard materials required and you have the total cost. Then add a markup as a buffer to absorb any possible assumptions and of course a given profit margin.

 

This situation is shown in Figure 1:This situation is shown in Figure 1:Figure 1 Figure 1. Example of typical selling price and profit calculation

 

This methodology is expedient but lacks common sense details to gain meaningful insights to improve profit. The resource unit cost is highly dependent on demand, capacity and performance for instance of certain resources over time. Simplified cost allocation models cannot manage these variables.

 

 

    Two levels of cost allocation model details such as:
  • Resources -> Cost Objects or Cost Centers -> Cost Objects

are very common but insufficient.

 

 

    Even 3 level cost allocation models such as:
  • Resources -> Cost Centers -> Cost Objects or Resources -> Activities -> Cost Objects

which are used in old Activity Based Costing (ABC), are insufficient to capture meaningful insights.

 

Working with over 50 customers, we have found that most companies require 5 to 10 cost allocation model levels. Accountancy tools, old ABC Costing tools or simplified models in spreadsheets cannot reflect the real number of cost levels, and because of this they produce unit cost distortions that can range from 10% to 150%. These distortions lead to poor business decisions instead of the insights to effect a profit improvement.

 

 

Read more: Common sense financial precision for 30% profit growth

SAP Startups most Innovative Award

 

 


GaussSoft wins SAP
Startups most innovative Award

 

In March 2014, SAP held its first Startup Forum in Palo Alto, CA, in the heart of Si Valley.  It was one of several forums that SAP holds to provide startups with information and support for their products to exploit SAP HANA.  SAP Forum.


Profitable insights in seconds

We became interested in working with SAP HANA because of a large manufacturing SAP customer had wanted it as part of GaussSoft’s solution. This customer required profit and cost analysis in seconds with copious amounts of ERP (from multiple SAP sites) and financial data using complex financial models. Their goal was to be able to enable their executives in seconds to arrive at profitable decisions based on insights gleaned across their entire enterprise from GaussSoft’s Profit Analysis and Simulation PAS product.



In a day and 2 months

In one day, the Startup meeting provided us with basic SAP HANA information, contacts and a great Q&A. We could actually determine what would be needed for a successful integration, and more importantly the right knowledgeable person to contact.  Armed with this information, in a little over 2 months we completed the process and our product is now running on SAP HANA, ready to offer our customers a great solution in partnership with an ERP market leader, SAP.  The last step is obtaining SAP HANA certification.



Icing on the Cake

During the forum each startup had a chance to talk about their companies and do product demos. GaussSoft received the award for the Most Innovative Startup: the icing on the cake. 

Read more: SAP Startups most Innovative Award