DISTINCTIVES: VDDW Distinctives   >   Accuracy

  • Accuracy means the solution reflects the real drivers of financial performance. It doesn’t allocate expense merely on the basis of volume or average rates that may have nothing to do with the efficiency of one product or customer versus another. (See the NOP-driven Negotiating example to understand why this is important.) Further, the linkage between operational drivers and allocated P&L can be readily and repeatably verified both as the system is being built and at any time after it’s deployed, and if needed, re-calibrated to accommodate changes in the business. Finally, it can be verified from multiple angles:
  • 1. It can be shown to tie back to the financial system of record
  • 2. Line managers who examine the results would say it makes sense why certain products, customers, or suppliers receive the allocated portion of corporate overhead assigned to them (even if they may not like the answer!)
  • 3. Resource capacity consumed by products or customers, when compared to the total capacity available, will yield a reasonable estimate of productive utilization.
  • A system that can be multiply verified in this way can be trusted for decision-making purposes.

  • How Accuracy relates to the other sectors of comparison

    Achieving this level of verifiable accuracy depends upon transaction-level detail (i.e., depth of analysis). The allocation engine must take data in at the transaction level, rely heavily on the data points stored on the transaction to drive allocation logic, and spit it’s output back out at the transaction-level for verification. This also implies that the solution must be highly scalable, particular for large, high-volume businesses.

    Accuracy, of course, facilitates organizational buy-in.


  • Why the VDDW rates well for Accuracy

    1. It is built at the transaction-level. This means this is the granularity of data that goes in to the allocation-engine and also what comes back out of it. It also means it uses transaction-based data points as the basis for driving allocation.

    2. It is built and repeatedly verified by a cross-functional team of experts.

    3. It can be verified in terms of tie-back to corporate financials.

    4. It can be verified in terms of resource utilization reported.

    5. Its multi-dimensional, OLAP-friendly design means it can be sliced-and-diced six ways to Sunday to ensure accuracy.