Situation

A global, B2B engineering services company was having difficulty determining how much time and money they were expending on projects and customers.  Their ability to attribute costs to activities was limited by their systems and other internal constraints.  As their business became more complex, the fact that they only knew their profitability at the aggregate corporate level meant that they were sub-optimally operating the business.  They asked Market Strategy Group to help them identify options for collecting and attributing costs that would improve their visibility into cost allocation and the impact of costs on business operations.

Solution

Market Strategy Group met with relevant corporate decision makers (both users and producers of cost-related information) to understand the unique needs of different stakeholders and what a cost attribution solution would have to accomplish.  Internal perspective was supplemented with external analysis of cost attribution methods, informed by best practices, focused on the quality of the information collected and the cost and complexity of the systems used to collect that information.  Market Strategy Group unified company needs, best practices, and research to create a set of viable options for the client that were vetted with help of tax and contracting experts who focused on the nuances that the various options implied for tax reporting and specific contract arrangements.  Each option was scored on eight criteria that clearly showed the pluses and minuses of each solution.

Outcome

The client steering committee accepted Market Strategy Group's recommended option. Once implemented, the new cost attribution strategy will enable the client to make operating and resource allocation decision with much greater visibility into cost information and impact.