Skip to content
Data analytics

Case Elisa

KAIKU – taking profitability accounting to the next level


Elisa needed to develop its profitability accounting as there were problems with its prior solution, including excessive averaging and a lack of detail. Working with Digia, a solution was developed to provide Elisa with a better understanding of the true profitability of its customers and products.

 

Elisa needed to develop its profitability accounting as there were problems with its prior solution, including excessive averaging and a lack of detail. The starting point was to develop a solution that would provide Elisa with a better understanding of the true profitability of its customers and products. In particular, the aim was to increase the transparency and understanding of production and process costs.

Elisa has approximately two million customers and more than 60,000 product designations. A tailored calculation solution was required to generate a comprehensive profitability overview.

What we did

 

The intention of the KAIKU project is to generate concrete benefits for the management and development of Elisa’s business by providing sufficiently accurate, transparent and detailed information about the profitability of Elisa’s products and customers, as well as the costs of processes. The prior solution relied too much on averages for actions, the causal relationships of cost allocations did not adequately describe reality and the system lacked detail. To address this, we decided to build a model based on activity-accounting logic.

Kimmo Pihlaja, Group Controller, Elisa Oyj

KAIKU collects relevant data and adapts to changes

The KAIKU accounting system utilises Elisa’s existing data warehouse and combines several data sources to produce profitability accounting. The most important data sources are the various invoicing, CRM and bookkeeping systems. KAIKU ensures straightforward access to profitability and cost data. It is adaptable to changes in the organisation: efforts have been made to automate as many cost drivers as possible and the system supports development to take account of future needs.

KAIKU’s activity-based accounting functions are based on SAS technology. The outputs of activity-based accounting and the actual profitability accounting are implemented around a dedicated KAIKU data warehouse. Digia is responsible for system maintenance and support.

“The intention of the KAIKU project is to generate concrete benefits for the management and development of Elisa’s business by providing sufficiently accurate, transparent and detailed information about the profitability of Elisa’s products and customers, as well as the costs of processes. The prior solution relied too much on averages for actions, the causal relationships of cost allocations did not adequately describe reality and the system lacked detail. To address this, we decided to build a model based on activity-accounting logic,” says Kimmo Pihlaja, Elisa’s Group Controller.

Thanks to KAIKU’s accounting, Elisa is now able to generate and group cost and profitability data more efficiently and accurately, laying the foundations for monitoring cost flows and profitability. The utilisation of KAIKU has begun with analyses generated using direct accounting data and visualised reports (such as monitoring process costs). The amount of KAIKU data grows every month when new accounting data is available, thereby enabling longer trends to be analysed.