Infocube Prism – Gross Margin Waterfall Analysis
Margin Improvement with Infocube Prism
Our Cognos TM1 margin analysis solution, Infocube Prism provides the visibility to manage and refine the gross margin within your organisation by product by vendor.
The analysis in Infocube Prism is presented as a waterfall between the gross margins for two periods, with the change broken down by component (or driver or lever), showing graphically the impact on gross margin of each component over the two designated periods.
Watch the overview to find out more, keep reading for more information or download our brochure.
Download the Infocube Prism brochure
Why is the Analysis in Prism Important to You?
Those responsible for margin management need visibility into the various components that make up gross margin. Most are able to tell which products or vendors are contributing to gross margin, however very few are able to understand how gross margin has changed for a product or vendor overtime nor are they able to compare what drives gross margin across multiple products or vendors. Lacking this visibility limits forecasting capability and limits effective negotiations when meeting with vendors. The ability to understand which components are impacting gross margin in a positive and negative way can be crucial to the success of a business.
In the case of one client of ours, to produce a report for one product group and vendor prior to the implementation of Prism, an accountant would spend two weeks pulling the data and tracing excel formulas to produce a single analysis. Some organisations have thousands of product categories and thousands of vendors making production of such reports on all categories impossible.
What does Infocube Prism do?
Infocube Prism provides an automated environment that allows for analysis of the key drivers of margin for every combination of product and vendor at every level of the product hierarchy.
Prism enables organisations to:
- Understand the impact of key drivers on the change in gross margin over time,
- Provide buyers with up to date information on vendors for negotiations,
- Identify key profit indicators to assist with decisions making
- Significantly reduce cost of producing reports
What Infocube Prism Includes
A – Waterfall Reporting
A tool to better understand the drivers of margin at a category level across all product categories. Infocube Prism takes two known periods and measures the impact to margin for different drivers (levers) of revenue and cost between them. This is customised based on the levers of margin for each specific customer.
B – Category Planning Tool
Infocube Prism provides a clear direction on how margin analysis should be used to make better planning decisions. Where the waterfall model indicates the changes between two known periods, the planning tool provides a waterfall from a known period to a future period by an analyst tweaking the various margin levers.