Understanding Profit Analytics for Microsoft Dynamics GP

Every transaction, shipment, and customer interaction leaves a digital footprint — and if you’re not using that data to your advantage, you’re squandering it. But how much unleveraged data is out there, and what does it cost the businesses that haven’t quite figured out how to make the most of the insights already living in their ERP system? 

It’s estimated that approximately 400 million terabytes of data are created every day. And roughly 70% of data goes unused by businesses for analytics, costing them millions every year. 

But beyond just the cost of unused data, businesses with their sights set on improved profitability also have to contend with issues like margin leaks and inefficient order management. For businesses in distribution that are also running their operations on
Microsoft Dynamics GP, Cavallo’s Profit Analytics is the key to eliminating margin leakage and embracing intelligent order management for good. 

The Power of Order Intelligence

If there’s one thing we know for sure, it’s that the vital intelligence that can really drive profitability for distributors isn’t being exploited the way it should be. At Cavallo, we offer a new, ERP-powered way to transform your Order Management System (OMS) into a powerful profit engine. 

Cavallo’s Order Intelligence platform is designed to integrate with existing ERP and order management systems to provide real-time insights, proactive tools for defect detection and issue resolution, automated workflows (capable of modeling complex quote and order scenarios), and comprehensive data analytics to drive profitability on every order. That means you can finally say goodbye to preventable unrealized revenue and say hello to new revenue streams you may not have considered. 

Today, however, many businesses are facing the same, very specific problem. We’re seeing that they’re actively leaking profit margins on a third —or more— of their orders. And in turn, Cavallo has a dedicated solution for precise measurement and resolution. 

A cornerstone of the Order Intelligence platform, Cavallo’s Profit Analytics solution is purpose-built to uniquely address the profitability problem within order management for distributors.

Profit Analytics: Going Beyond Traditional Analytics Software 

We know it’s a problem. Still, profit erosion and its causes are nearly impossible to identify and rectify for most businesses, often due to the sheer volume of information within their ERP system. 

Enter Cavallo Profit Analytics, a revolutionary order intelligence tool that harnesses your data to the surface where you’re leaking margin, why, and what you need to do to stop it. (Think: it’s your key to proactively detect low-margin issues, over-discounting, and hidden costs, and then stop them in their tracks).

With Profit Analytics, you can unleash the power of hidden data by turning massive volumes of data into a treasure trove of actionable insights: the same actionable insights that would otherwise, for most, be too difficult or expensive to uncover with in-house talent or third-party resources. 

Unlike traditional analytics software tools that require expensive, highly-skilled resources to custom-build reports, Profit Analytics provides sophisticated visualizations that deliver immediate value, instantly revealing insights into your margin performance; plus:

• Real-time data analysis so you can access up-to-the-minute information on sales, inventory, and customer behavior — or use it for competitive analysis.
• Interactive dashboards that let you visualize complex data sets through intuitive and customizable dashboards.
• Drill-down capabilities for exploring data at granular levels and identifying trends and patterns.
• Automated reporting, so you can generate and distribute reports automatically, saving time and ensuring consistency.

With Profit Analytics, you see more than just numbers. You, instead, gain a deep understanding of the dynamics affecting your profitability — and what corrective actions you need to take to address them. 

Plus, for distributors in particular, the value of powerful data analysis tools extends even further.

Tapping the Unrealized Value of Analytics Tools for Distributors

In distribution, analytics tools are key to end-to-end visibility across the order management process, and they need to take into account support for order tracking and monitoring, fulfillment, demand forecasting, and even order prioritization. It’s time to simplify order management and enhance throughput without adding manpower. To do that, most traditional distribution analytics tools focus on four key areas: data consolidation, predictive analytics, performance tracking, and reporting (which may or may not be customizable to your specific needs). 

But if you want more specific direction on what capabilities, functionalities, and features you should look out for, here’s a quick look.

What should you look for in data analysis tools like Profit Analytics?

Profit Analytics provides comprehensive data analysis tools that enable Microsoft Dynamics GP users to extract valuable insights from their data. And while many of the capabilities available with Cavallo’s Profit Analytics are unique, there are, nonetheless, a handful of key criteria to keep in mind when looking for your next favorite analytics software solution, whether or not you choose Profit Analytics. 

Generally speaking, your standard analytics solution will need to cover some basics:

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GOOD

• Trend analysis to identify patterns and trends in sales, customer behavior, and market conditions.
• Segmentation that lets you group customers, products, or markets based on specific criteria for targeted strategies.
• Profitability analysis capabilities, so you can evaluate the profitability of individual products, customers, or sales channels.
• The ability to model different scenarios to assess potential “what if” outcomes and make informed decisions.

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But if you want to take it one step further, Profit Analytics dives deep, far, and wide into profitability analysis in particular. So, if that’s a key area of interest, and you’re looking for a better way to stop leaving money on the table, consider more robust capabilities.

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BETTER

• Sophisticated variance analysis to reveal areas of margin leakage and their root causes (even at the line-item level)
• Comprehensive customer analytics for assessing churn risk, measuring how churn affects profitability, and more 
• SKU performance, distinguishing between top sellers and underperformers. This includes item analytics to see which SKUs have the greatest positive or negative impact on profits
• Configurable calculations that provide real-time gross margin calculations when there are additional costs (such as royalties, tariffs, item decorating costs, or marketplace fees) besides unit cost 
• An at-a-glance view of important margin metrics such as P&L, margin percentage, and current period vs. comparison period variances for sales, COGS, and margin 

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With Profit Analytics, you don’t just get all the best that traditional analytics tools for distributors have to offer. You also get an intelligent new way to identify gross margin leaks in real-time, proactively address churn risks to secure margin contributions, and pinpoint and address the root causes of margin erosion — all from one solution. Plus, sharing all those insights is easy, so you can rest assured your entire organization will be empowered to collaborate to boost profitability together.

The Future of Intelligent Order Management is Here

Integrating Order Intelligence software into Dynamics GP is a game-changer for distributors that have long dreamed of a way to harness the power of their ERP without silos. Pairing your ERP with Order Intelligence solutions enhances operational efficiency and profitability by targeting error-prone orders and proactively addressing issues within the order lifecycle. 

What does this look like in practice, though? By focusing on problematic orders through real-time defect detection and proactive profit control mechanisms, distributors gain the power and control they need to prevent margin leakage, eliminate bottlenecks, and easily enforce dynamic business rules to boost efficiency—all without increasing staff.

As a key part of that Order Intelligence platform, Profit Analytics uncovers hidden profit opportunities. For your business, that tends to also mean better sustained profitability and operational excellence, even in the face of a competitive business landscape. 

Case in point? As part of Profit Analytics, customers get access to AVA, a “profitability co-pilot” that makes insights truly actionable by auto-suggesting steps that can be taken to improve margin performance. That means no risk of insight overload causing action paralysis. You can detect and optimize with ease (i.e., explore customer behavior, optimize cost of goods sold, perfect your pricing strategy, and master gross margin variance analysis.) The future is now, and there’s no better time or opportunity to transform your data into strategic insights that drive exceptional business performance.

To learn more, dive into our Profit Analytics fact sheet or request a demo.