Allocating Corporate costs for a large Telco
Updated: Mar 31, 2020
The method of allocating corporate costs had become a costly and overly complex process over several years for a large Telco provider. The management effort required a team of finance people to manage and significant IT licencing/support costs on an annual basis. In addition, the system of calculating and allocating costs took several days to compile and calculate the data. For a simple determination of the profitability of various products in their business, the process was highly manual and not transparent to the relevant stakeholders.
The current state of the process and systems were analysed, and the key flows of information were accurately mapped out. The system was re-built in a cloud-based system called Anaplan, with a much simpler and transparent methodology. The time taken to calculate the output reduced from several days down to a few hours. The input drivers were captured via a simpler web interface which improved the user experience. The effort to maintain dropped down to a single user and as a result there were significant cost savings in IT licencing by transitioning into a cloud based SAAS environment with less dependency of on-premise IT and support. The cost drivers were also a lot more transparent and profitability decisions were able to be better understood as a result of this change.
At the end of this project there were immediate savings in time, effort and complexity going forward for how costs are allocated to the various products and departments.
Overly complex, costly and slow process to determine the profitability of the company’s products on a regular basis.
Significant reduction in time to calculate profitability of products and re-deployment of support resources. There were also significant costs savings as a result of decommissioning the on-premise IT licences for legacy system.