Samuli Sikanen

Why not steer your company towards more profitable business?


By Samuli Sikanen

Identifying expenses and revenues related to products, services, customers or sales channels isn’t magic, although it may sometimes seem so. It takes hard work, but not superpowers – recognizing profitability doesn’t actually need to be difficult.

Why is it such a headache?

Well, it’s about a thorough understanding of the expenses and revenues related to all aspects of a business, and then applying that knowledge to business decisions. The calculations necessary can be done with a first-grader’s math skills, but there are often so many sources and allocation targets for revenues and expenses involved that it can make even an experienced finance guru’s head spin.

Gaining a comprehensive understanding becomes even more difficult if cost and profit factors for different parts of business are handled and analyzed in multiple different systems which do not necessarily communicate with each other (as is often the case).

Typically, calculations are only done every now and then, and at worst they can be so simplified that there is no way to form a real picture of profitability. This leads to decisions steered by gut feelings or perceptions rather than real-world knowledge. If there is no way to identify and communicate factors which affect expenses or efficiency, there can be no real insight on how to develop the cost-effectiveness of different functions.

What’s the problem anyway?

There has obviously been a gap in the market for a competent and cost-effective software solution. This has left a gaping hole also in the cost and profitability knowledge of countless companies. Over the years, the call has strengthened for a modern tool which would allow users to model all areas of business, with their complex material consumption and expense models, into one system. Sure, there have been different calculation solutions available for more than ten years, but they have often been focused on either product cost calculation or activity-based costing.

We at Bilot are proud and excited to say that now we can offer a solution to this problem. It’s called Astrada5.

What will change?

Astrada5, a product by Swedish software company Astrada, is finally going to gain a stronger foothold on Finnish markets. Of course, no software alone will solve anyone’s problems; the essential part is utilizing the information it provides. However, using the right tools is often half the battle, so calling Astrada5 a long-awaited answer to our customers’ needs does not seem too far-flung. So what does the solution do, and how can it be used?

Put simply, Astrada5 helps us visualize factors which affect profitability or lack thereof. The software can be used to run various simulations, and it helps understand the costs and profitability effects of different strategic changes, based on variables entered by the user.

When we know the costs and profits of different factors, it is easier to make decisions about pricing, volume, offers, and prioritizing. Moreover, these decisions are justified. It is much simpler to calculate customer- and product-specific revenues when different areas of business, be they physical products or services in a portfolio, can be modelled within one system rather than across several systems.

Also available in the cloud

Astrada5 can be implemented as an on-premise solution or used as a cloud-based service. Last week, we did some modelling in Astrada5 located on Bilot’s own SQL server, and later in the same week we presented a customer demo with a version in MS Azure. The software is source system independent, and results and figures can be brought into the analytics environment used by the client – be it Tableau, PowerBI, SAP BO or Qlik.

Astrada5’s greatest assets are the highly visual interface and the validation of allocation processes, which makes it easy to understand calculations and the steps needed to make them.

Who does astrada5 suit?

Astrada5 is cost-efficient, implementation and creating the business model are quick processes, and licensing makes implementation financially possible in both large and small companies. Astrada5 is suitable for pretty much any business, and it is currently in use in the production and process industries, the banking and finance sector, wholesale business and healthcare.

How could this software help you steer your business in a more profitable direction? Get in contact and let’s find out!