Robert S. Kaplan

Managers are often surprised to learn that only a small percentage of customers generate substantially more than 100 percent of their profits; the remaining customers are either breakeven or unprofitable. Robert Kaplan, co-developer of activity-based costing (ABC), talks about how he is applying the new and improved version of this powerful costing approach to help manufacturing and service companies understand the economics of their products, services and customers. Through time-driven ABC, companies have the ability to assign virtually all organizational spending down to individual products and customers, enabling them to see for the first time where they are truly making and losing money. With this fact-based knowledge and analysis, Kaplan discusses the multiple ways companies can transform losses into profits quickly – leading to dramatic improvements within 6-12 months – without “firing customers.”