Activity Based Costing (ABC) and Management (ABM) effectively help managers plan and control the financial impact of routine and non-routine processes. However, both are narrowly focused on the cost to serve or produce, providing valuable insights but falling short of obtaining a full profit and loss statement understanding of profitability. Organizations need to expand their financial view to incorporate the various types of operational and non-operational revenues. In other words, ABC & M cannot account for costs driven by the underlying attributes of your customers.

However, by incorporating Teradata Value Analyzer into your IT foundation you have the ability to calculate customer profitability consistently with the profit and loss statement. Teradata Value Analyzer is unique because it supports the ABC process and defines profitability along the entire spectrum of your P&L statement. It looks at the revenues collected and the cost to serve, plus it captures the impact of waived revenue as well as risks and service costs generated by customer activity.

Teradata Value Analyzer also provides ROI and ROE for each profitability measure by combining the customers net profit picture with a view of the capital investment, such as equipment or facilities. Teradata Value Analyzer provides you with a detailed view of costs and revenues associated with each customer behavior as well as aggregations to product, channel and organization by leveraging the Teradata RDBMS.

To truly understand the profitability drivers of your company, you must have a holistic, encompassing view of enterprise profitability. Teradata Value Analyzer provides you with just that … consistent, accurate profitability analysis.