An enterprise without an effective profitability measurement solution suffer a whale shaped cumulative profit curve, i.e. only around 20% of its customers and products are profitable and they create 150% or more of the enterprise\'s reported profit. Initiatives powered by Acorn solutions help enterprises to improve the shape of their cumulative profit curve and consequently increase profit by 50% or more in a reasonable period of time.

1. UNDERSTAND YOUR ENTERPRISE’S PROFITABILITY CUSTOMER BY
CUSTOMER, PRODUCT BY PRODUCT, CHANNEL BY CHANNEL TO DRIVE
PROFITABLE GROWTH
PROFITABILITY IMPROVEMENT CHALLENGE
UNLEASH THE PROFITABILITY IMPROVEMENT POTENTIAL OF
YOUR ENTERPRISE AND INCREASE OPERATING PROFIT BY
50% OR MORE
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2. Does your enterprise suffer from a whale shaped cumulative profit curve?
CUMULATIVE OPERATING PROFIT CURVE
Cumulative operating profit (product / SKU or customer / point of sale)
A
Profit
improvement
potential
B
Profitable (A) P 1,5 x Reported (B)
Most profitable customers/ products Most loss making customers / products
A – sum of net operating profit generated by profitable products / SKUs or customers /
points of sale
B – agreggate net operating profit (EBIT) as reported on a consolidated Profit & Loss
Account
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3. UNDERSTAND YOUR ENTERPRISE’S PROFITABILITY CUSTOMER BY
CUSTOMER, PRODUCT BY PRODUCT, MARKET BY MARKET TO DRIVE
PROFITABLE GROWTH
CHOOSE BETWEEN TWO INITIATIVES
ONE-OFF DUE DILIGENCE EXERCISE OR FULL
INTEGRATION OF THE ACORN SOLUTION INTO AN
ENTERPRISE’S MANAGEMENT SYSTEM
We commit to helping you improve your operating profits by as much as 50% or more in a reasonable period
of time by delivering full cost transparency and a uniquely detailed and cross-dimensional insight into
profitability of your transactions - customer by customer, product by product, SKU by SKU, market by market…
The choice between (i) a 5-10 week consulting project requiring minimal engagement of your resources or (ii) a
full integration of Acorn’s solutions into your business system requiring 5-10 months to implement
Anything but a black-box solution – fully auditable and verifiable results of the analysis, including
reconciliation with the financial accounting reporting structures
Fully compatible to your ERP, BI or warehousing systems (home-grown, Oracle, Microsoft, Infor, SAP, Navision,
Business Objects, Cognos, Hyperion, MicroStrategy, Excel, Access, etc.)
In case of the one-off due diligence project, no installation of software or any other changes required in
existing data collection and storage information systems and technology

4. The Imperative to Understand Customer and Product Profitability
“ARE OUR CUSTOMERS AND PRODUCTS PROFITABLE OR NOT – AND WHY?!”
[SO EASY TO ASK – SO DIFFICULT TO ANSWER!]
CROSS- AND MULTI-DIMENSIONAL ANALYTICS
REQUIRED TO UNDERSTAND PROFITABILITY
CANNOT BE PRODUCED AD HOC BY HAND
USING EXCEL SPREADSHEETS AND
TRADITIONAL ACCOUNTING RECORDS – TIME
AND AGAIN, ATTEMPTS TO DO SO RESULT
ONLY IN FRUSTRATED ANALYSTS AND
DISAPPOINTED EXECUTIVES
UNDERSTANDING PROFITABILITY REQUIRES A
COMPLEX, FORWARD LOOKING AND
SYSTEMATIC EFFORT WITH REGARD TO
ALLOCATION, INTEGRATION AND STORAGE OF
DATA REQUIRED TO PRODUCE CROSS-
DIMENSIONAL PROFITABILITY ANALYSIS
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5. So easy to ask – so difficult to answer!
KNOWING SIMPLY WHAT IS (UN)PROFITABLE IS NOT ENOUGH TO MAKE
DECISIONS TO IMPROVE PROFITABILITY
Business dimension PRODUCT
YOU HAVE TO KNOW WHY?! SOMETHING
Business dimension CUSTOMER
Profitability by product, mio €
S IS PROFITABLE OR NOT TO ACT ON AN
Prod1 Prod1 Prod3 Prod4 Prod5 ANALYTICAL FINDING
Cust1 x x x x x 5,7 TO KNOW WHY? YOU NEED MULTI-
DIMENSIONAL AND CROSS-DIMENSIONAL
Profitability by customer, mio €
Cust2 x x x x x 9,1 ANALYTICS PRODUCT BY PRODUCT,
?
CUSTOMER BY CUSTOMER, PROCESS BY
Cust3 x x x x x -4,9
PROCESS – TRANSACTION BY TRANSACTION
Cust4 x x x x x 7,3
FOR EXAMPLE, NEGOTIATING WITH A
CUSTOMER TO IMPROVE PROFITABILITY
Cust5 x x x x x -3,9
REQUIRES KNOWING WHICH PRODUCTS
Cust6 x x x x x 5,1 THAT YOU ARE SELLING TO THAT
PARTICULAR CUSTOMER ARE PROFITABLE
Cust7 x x x x x 1,3 AND WHICH ARE NOT, AND MOREOVER
WHY ARE THEY (UN)PROFITABLE
S 12,3 21,9 -12,7 7,5 -9,3 19,7
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6. Profitability is no single number – it varies with dimensions analyzed!
16 DIFFERENT PROFITABILITIES OF THE
SAME PRODUCT OR CUSTOMER!?
YES!! A PRODUCT MAY BE PROFITABLE
IN AGGREGATE, BUT ITS PROFITABILITY
VARIES WITH BUSINESS DIMENSIONS,
E.G. GEOGRAPHIC MARKET AND
CUSTOMER SEGMENT:
THE PRODUCT IS ACTUALLY
LOSING MONEY IN TWO OF THE
FOUR MARKETS, I.E. IN BULGARIA
AND CROATIA.
DISTRIBUTORS ARE THE MOST
PROFITABLE CUSTOMERS, WHILE
HORECA SEGMENT BARELY
COVERS ITS COSTS
PROFITABILITY VARIES THE MOST
WITHIN CROATIA AND WITHIN
DISTRIBUTORS CUSTOMER
SEGMENTA
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7. Do not use a fork to eat soup … traditional book-keeping and financial
accounting performance measurment systems are far from effective
Source:
Michael Maher
University of California, Davis
Cost accounting – Creating
Value for Management
5th edition, Irwin McGraw-Hill
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8. ACORN’S EXPERIENCE AND ACADEMIC RESEARCH TESTIFY THAT IF YOU DO
NOT HAVE ACORN’S ANALYTICAL AND TECHNOLOGICAL CAPACITY …
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9. … only around 20% of your products and customers is profitabile
2000 Arranging customers or products by profitability
MOST (measured by net operating profit)
PROFITABLE
CUSTOMER /
PRODUCT / SKU 1500
~ 20% ~ 60% ~ 20%
Net operating profit
1000
500
MOST MONEY
0 LOSING
CUSTOMER /
PRODUCT / SKU
1 2 3 4 5 6 7 8 910 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45
-500
Making money Breaking even Losing money
-1000
Experience of 250+ Acorn implementation projects
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10. Academic research supports Acorn’s experience
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11. ACORN’S HOLISTIC AND ONE-STOP SOLUTION IS USED BY THE WORLD’S
RENOWNED ENTERPRISES AND IS COMPLEMENTARY TO ANY INFORMATION
SYSTEM ENVIRONMENT…
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12. Holistic and one-stop solution – transforming raw data into an efficient cost
control and profitability analysis reporting capacity
BI platforms [and Product Brand Customer Point-of-sale Supplier
Acorn’s own profitability profitability profitability profitability profitability
functionality]
QUERYING
Acorn’s PROFITABILITY ANALYSIS DATABASE
(DATA MART)
solution
DATA INTEGRATION (ETL)
FINANCIAL ALLOCATIONS METHODOLOGY and MODELING TOOL
LDSS LDSS LDSS LDSS LDSS LDSS LDSS
Existing legacy
BIS/IT/ WH Legacy Data Storage Systems
environments
(e.g. SAP,
TPS TPS TPS TPS TPS TPS TPS
Navision, Excel,
Oracle, etc.)
Legacy Transaction Processing Systems
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13. Time driven ABC – advanced financial allocations methodology
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14. Acorn Works in Any Environment – Easily and Cost Effectively
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15. Acorn Clients
Financial Services
Retail &
Consumer Products
Wholesale,
Distribution &
Logistics
Manufacturing &
Other Industries
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16. Acorn Systems Inc. – At-a-Glance
The Profit Improvement Company
Delivering profit improvements to help clients grow profitably, i.e. increase revenues, decrease cost
and minimize capital employed / improve operating efficiency
The only firm focused solely on providing actionable decision making orientated analytics to improve
profitability that does not exist today
Proven Client Success
250+ clients around the world
$1 billion of profit improvements resulting in $9 billion of additional shareholder value
Global Operations
Houston, Texas, USA (headquarters), Radnor, Pennsylvania, USA and Amsterdam,
The Nederland's
Founded in 1996 by Steven R. Anderson, a Harvard Business School and McKinsey alumnus who
today serves as a Chairman of the company
Association with professor Robert Kaplan from Harvard Business School who co-authored Acorn’s
financial allocations methodology and sits on the Board of Acorn Systems
Supported by two VC houses: Insight Ventures Partners (www.insightpartners.com) and Austin
Ventures (www.austinventures.com)
Partnerships with premier technology companies, consulting firms and associations around the
globe, including STRATEKS and BATUMAN CONSULTING
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17. Senior consultants – Authorized partners of Acorn Systems
Branko Greganovič Deniz Batuman
STRATEKS – Change Leadership BATUMAN CONSULTING
Project role Project role
Design of analytical approach and Project management, cost allocation
methodology, scoping and structuring of the modeling, system integration, validation,
allocation model, Action Plan development and Action Plan development and presentation
presentation, quality assurance,
Professional background
Professional background Deniz has almost 10 years of extensive
Branko has more than 20 years of experience experience with Acorn Systems and as an
in advisory and executive positions in various independent consultant
industries Successfully led numerous Acorn Solutions
All-around experience in strategy making, driven consulting engagements based on
business analysis and corporate finance, Time Driven Activity-Based Costing &
ranging from monetary policy to public debt Management (TDABC/M).
management and fiscal policy to banking to Clients come from various industries -
M&A advisory to restructuring focused private Financial Services, Consumer Goods,
equity role to a CFO position in a leading Manufacturing, Retail, and Distribution with
regional food and beverage group. turnovers ranging from $100 million to over
$50 billion
Sloan Fellow (MSc in Strategy and
Leadership), London Business School, MBA/MSc in Information Systems, dual
University of London (2001) degree from Boston University (2001)
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18. Unleash the profitability
improvement potential of your
enterprise
Profit improvement initiatives
Mergers and acquisitions
Business process driven management structures
Business strategy design and implementation
Business and financial restructuring
Go to Acorn homepage
Branko Greganovic, Managing Partner
http://www.acornsys.com/
E-mail: branko.greganovic@strateks.biz
Mobile: +386 31 378 687