Product Profitability System (PPS)

For a superior profitability measurement process

Institutions with well-implemented product profitability measurement systems enjoy many benefits such as:

• Better pricing decisions
• Objective basis for comparing products
• Better framework for evaluating product features
• Equitable basis for measurement performance in incentive-based compensation plans
• Comprehensive unit cost data that are essential to a valid and accurate customer profitability system

IPS-Sendero Product Profitability System (PPS) responds to these needs and more by providing you with a powerful set of tools for accurately evaluating profitability at the product level. In addition to orienting performance measurement techniques to products and services, PPS integrates the concepts of management accounting in profitability measurement by applying activity-based costing techniques to create meaningful unit costs.

The Product Profitability System: rational, equitable evaluation

As a result, product managers are able to understand what costs are associated with the creation and delivery of specific products and activities compared to their revenue, but also appreciate what expenditures should be for a defined volume level. This approach forms a more rational and equitable basis for evaluation of product performance as well as that of the managers responsible for them. With the addition of PPS, your profitability measurement process provides you with a clearer picture than ever.

The next step in your profitability measurement process

Many institutions choose to implement product profitability measurement as a "next step" from organizational profitability measurement. However, the design of PPS and the integration of unit costing allow both product profitability measurement and spending variance analysis at the profit center level. This flexibility enables you to implement PPS independently or in conjunction with other IPS-Sendero profitability measurement process applications.

Finally, PPS provides the ideal foundation for the development and implementation of an accurate customer profitability system by producing critical unit cost calculations and enabling their transfer to the customer profitability measurement system.

Product Profitability System: a tested and trusted solution

Used by hundreds of financial institutions, IPS-Sendero PPS helps improve measurement and reporting of product profitability. Sold, implemented and supported by the most knowledgeable profitability resources available, PPS offers the most proven system of its kind. Contact us today.