It is not the objective of this article to lay out all the details of what follows a successful project implementation. However, we hope that it becomes clear from outlining the above ­mentioned tasks that overcoming the problem of cost ­allocation is a ­critical milestone to improve many other business areas within a company. There is much more that needs to be done in order to achive the full benefit! 

Often the question is asked: What specific value does the implementation of a cost allocation system really bring to the business? As for any other project this is a very valid question and we would like to take the opportunity in this closing section to once again highlight the most important benefits in a nutshell. 

In the short-term (6 months after the implementation) it will provide cost information necessary for many strategic Marketing, Pricing and Strategy decisions. Of course, without this information those decisions would also be made, however, they would be based more on assumptions and therefore the risks of making wrong decisions would definitely be larger. In ­particular, we are talking about the following cost information: 

• A fact-based simulation of the average and incremental unit cost for every service with respect to various capacity levels of the network and the organization. This information is needed to understand price floors. It is an input to strategic tariff or portfolio optimization tools that aim at calculating the optimal profit-based price points.  

• A historical analysis and future projection of the profitability of every existing tariff. The analysis ranks the performance of tariff groups and gives marketing a clear view of tariffs and user groups which are underperforming. The analysis does not stop there though. It actually provides answers as to why ­tariffs are performing better or worse because they show different cost and resource consumption patterns. It is this information that ­Marketing can use to organize more targeted customer group campaigns that aim at selectively improving the tariffs’ ­profitability.  

• The historical analysis and future profitability projection can also be applied to specific customer segments and thereby help Marketing to segment customer groups based on ­financial aspects. These aspects will add much needed insight to the value and strategic fit of consumers to the general ­Marketing ­strategy which cannot be assessed by looking only at the common ­segmentation attributes, such as gender, age and household ­income.