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Business Challenges
- Build and Maintain a Competitive Advantage
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- Basic financial analysis was difficult / impossible to perform due to the challenges associated with obtaining data
- Strong need to establish defined processes and procedures due to unprecedented entry of competition
- Better utilization of technology to enhance operational efficiencies
- Lack of Knowledge around Key Performance Indicators (KPIs)
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- Customer and product level business insight was non-existent
- No efficient mechanism to track and monitor
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- Customer Churn
- Average Revenue per Unit (ARPU), Penetration Percentages
- Lack of Knowledge around Profit Center and Product Profitability
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- Prior Regulated Environment
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- Rates determined based on underlying cost structure and regulatory approval
- Competitive Environment
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- Rates are established by market based forces
- No Ability for Cost Structure Analysis
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- Evaluate existing profit center and product profitability
- Foundation for evaluating new products and business opportunities
- Identify operational issues impacting product profitability that require management attention
Solution
Implemented a fully integrated multi-year driver based budgeting process using 4 different applications
 Finance Application
- Developed over 30 standardized revenue and expense driver based calculations
- Identified and forecasted all driver related variables including customer base, product penetration, and product pricing
- Designed over 100 activity based costing allocations
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- Insight into Entity, Profit Center, and Product profitability
- Regulatory requirements for regulated versus non-regulated activities
- Ability to analyze expenses on both a pre and post allocation basis
Human Capital Management (HCM) Application
- Designed a HCM application that mirrors our payroll system
- Global variables (FICA, FUTA, SUTA, group insurance premiums, 401(k), deferred compensation, pension plan, retiree medical)
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- Bi-weekly payroll schedule
- Burden and benefit calculations
- Employee merit raises and promotions
- Employee new hires and terminations
Capital Expenditures (CapEx) Application
- Project level forecasting of all planned capital spending
- Automated depreciation expense calculations
- Ability to summarize projects by: Profit Center, Geography, Technology type, Category Code (Switching, Circuit, Cable & Wire)
Customer Churn Application
- Compare actual to budget results for all driver based results
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- Customers
- Product penetration rates
- Product ARPUs
- Ability to analyze data by: Profit Center, Geography, Technology type, Customer type
Key Results
Foundation for the transformation of the organization
Documentation and defined data structures
- Consistent and universal formulas
- Inventory of all calculations
- Defined activity based cost allocations
Reduced time associated with budget development
Ability to forecast multiple times on a real time basis
Strategic business case scenario analysis
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