Area of expertise

Standard costs in an unpredictable reality

Complexity and variability
Increased complexity in operational and legal structures together with reduced predictability in external factors affecting profitability means a series of challenges linked to the use of standard costs for corporate governance and reporting.
The challenges include being able to satisfy the management at different levels with relevant and updated decision-making materials as well as streamlining time-consuming internal processes.

Challenges that affect the entire organization
As the use of standard costs is often deeply rooted as a method, and also affects the entire organization to some extent, the challenges are felt to be particularly great to tackle. As always, seemingly overwhelming tasks require mapping out the problems and breaking them down into smaller, more manageable pieces. The challenges can be summarized in the following four areas:

• Difficulties in distinguishing and thereby assessing the organization's performance relatively complex and unpredictable external factors, for example – How has the efficiency of our production developed in comparison to the previous year?
• Outdated margins and product costs make it difficult to make informed decisions about focus markets, pricing and production, for example – What do the margins look like including variances against calculated standard costs?
• Time-consuming and costly planning processes as a result of complex models for calculating and allocating costs to individual products and variants - How can we reduce the time we spend on annual planning processes and thereby free up time for improvement work?
• Deficient data quality as a result of increasing complexity in product structures and IT environment, which requires company-wide information models and first-class master data management - How do we achieve effective data management and easily accessible information that the entire organization can trust?

Achieve full potential
In order to meet all the challenges, it is necessary to handle issues in three types of areas; Information model and master data, Legal accounting and reporting, as well as Strategic and financial management.

There are clear connections between these areas and it is important to have an overall perspective. If one area is optimized, without regard to the others, the full potential is not achieved. For example, there is a great risk that financial management is based on the wrong parameters if the underlying master data is not correct.

Our offer
Based on long experience of proven models and methods, we can help you achieve your full potential. The assignment may include a selection of, or all, areas:

• Analysis and recommendation regarding the use of standard cost with regard to legal, operational and incentive-related aspects
• Development of information models, with a focus on product structures, that satisfy the needs of both management and operations
• Development of the financial model and key figures for financial management and assessment of performance
• Development of profitability analyzes and profitability levels
• Mapping and development of processes linked to master data management, accounting, planning and reporting
• Mapping and analysis of available master data as well as improvement efforts for increased control and quality based on identified needs
• System review and proposals for the development of solutions and working methods
• Analysis and support in the organization's change work