Tracing costs to activities and resources

Investaura is pleased to present its new whitepaper on Activity-Based Costing and Profitability Analysis, which provides a step-by-step roadmap for a successful implementation over a 5 week period.

Service Costing has the reputation to be complicated and time-consuming to implement. It doesn’t have to be so. Using the eTOM business process framework for telcos, as well as a top-down approach and a representative data set for a mobile service provider, this white paper presents the key steps for a rapid implementation undertaken over a five-week period with Prodacapo, the Activity-Based Costing (ABC) software platform. Once the initial model has been set up, it can easily be expanded as required.

For each service, two types of cost results are generated: Fully Allocated Costs (FAC), an ‘average’ cost measure that includes common costs; Long-Run incremental Costs (LRIC), a ‘marginal’ cost measure that excludes common costs. Providing two sets of cost results is useful both for regulatory costing as well as retail pricing purposes, as it provides a cost range (LRIC = minimum, FAC = maximum) for each services sold by the service provider to other carriers (B2B) or end-users (B2C).


Beyond the cost results above, we also generate profitability measures at the service level (e.g. voice call per minute, data download per Mbyte) as well as the customer segment level (e.g. prepaid1, postpaid2), including EBITDA and EBIT per service type and per customer type, as well as the associated profit margins.

For this work, we have used the Prodacapo ABC software solution from Sweden. Prodacapo is an ‘object-oriented’ solution that greatly helps structure the costing and profitability analysis, capturing in particular the organisation structure, cost centres, processes, activities, products, customers, sales channels etc. Controllers and strategists love Prodacapo for its ability to take their business detail into account, as well as their financial and commercial data.

A demo of Prodacapo is available in free access at, and a password protected version of the telecoms solution is accessible at Feel free to contact us and request a password to get access to the telecoms model online.

Download “White Paper on Customer & Product Profitability Management using Prodacapo and eTOM”

Profitability-Management-made-easy-using-Prodacapo-and-eTOM.pdf – Downloaded 3549 times – 6.23 MB


  • Service Costing, Activity-Based Costing
  • Regulatory costing
  • Management Accounting, Profitability Management
  • FAC (Fully Allocated Costs), LRIC (Long-Run Incremental Costs)
  • Top-down modelling
  • ICT Service provider, eTOM process framework
  • Enterprise Performance Management (EPM) software solution