PostMail transports consignments (letters, newspapers, etc.) securely and reliably - in Switzerland and across borders. Private and business customers are offered high-quality products and customized solutions from acceptance to delivery. Digital services complement the offering. At the end of 2020, the calculation models had to be completely revised and adapted to new calculation standards and regulations as part of a Group-wide harmonization and standardization of value flows. This is where e3 and CostPerform came into play.

Challenges

• Complex cost allocation
• Required: Fast processing of planning calculations
• Adaptation to new calculation standards

Results

• Flexible mapping, adaptation and optimization of existing cost models
• Simulations and complex model calculations within 30 seconds
• Traceable costs based on process, product, cost type and cost center, broken down by period

PostMail is currently facing higher unit costs due to declining traffic volumes. While prices in the monopoly sector are regulated by the Federal Council - which sets the upper price limits in accordance with current legislation - without a monopoly, prices must be set by the market.
Against this backdrop, stringent cost models form an important basis for keeping costs under control. In addition, these cost models are an important basis for being able to provide the regulatory authorities with a comprehensible justification for pricing and / or cost-cutting measures adapted to the new market conditions.

Expected costs vs. actual costs

PostMail has been successfully using the CostPerform software to analyze process costs for several years.
As part of a Group-wide harmonization of value flows, it was now necessary to revise the cost models and adapt them to new calculation standards and regulations. In addition to calculating the current and past cost prices, it was also necessary to show a monthly calculation of the differences between the expected standard costs and the actual costs. Finally, this information should be able to be periodically displayed and combined at various levels (such as products, (sub-)processes, cost centers and cost types) of the cost model.
The CostPerform costing software should therefore ensure that the differences between standard costs and the actual infrastructure costs of the sorting center (cost type) in Zurich (cost center) are available month by month (period) as part of the sorting (process).

Enabling simulations

A central requirement of CostPerform is also the ability to create simulations for past periods with adjusted cost drivers: What would the cost allocation of a previous period have been if new specifications of cost drivers had been used? With this information, the cost accounting team is able to inform all relevant stakeholders, such as product managers or regulators, about the expected impact on their key performance indicators (KPIs) weeks and months before they go live with the new targets.

Less than 30 seconds

Instead of hiring a consultant to revise and adapt the current model to the new standards, PostMail decided to do this with its own team through "learning on the job". Thanks to several workshops together with specialists from e3 and CostPerform, the company was able to set up a prototype of the new model, which was quickly expanded and tested with live data. The model currently consists of over 25,000 objects and over 350,000 cost allocations. Despite the size and complexity of the model, the total calculation time takes less than 30 seconds on a standard laptop.

Aiming for four hours

The next step is now the direct connection of CostPerform to live data. PostMail is aiming for the magic four-hour mark, so that it should take no more than four hours after the monthly booking close to transfer the data directly to the current cost model, seamlessly run the calculations and report the calculation results to all relevant stakeholders. We are definitely ready to continue supporting PostMail in achieving this goal.